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Western Policy Center Roundtable

Opening remarks by Ambassador Michael Klosson
Washington D.C., January 10, 2003

Thank you, John, for your introduction. Good morning ladies and gentlemen.  I am very pleased to have the opportunity to speak with you about developments in Cyprus since my arrival at the end of the summer -- and to look ahead to the future.

Let me start by noting that for many, the name “Cyprus” conjures up only the image of a divided island where UN peacekeepers have been deployed along the Green Line for forty years.  It is that, but not only that. 

BROAD AGENDA

The U.S. and Cyprus have built a solid, multidimensional relationship. That relationship will only expand now that Cyprus’ EU membership has been approved, and we begin to work with Nicosia more intensively on the full range of issues on the U.S.-EU agenda.

The U.S. has three major priorities in its relationship with Cyprus, on which the Embassy has been engaged, beyond our vital work for a Cyprus solution, which I’ll talk about later.  Those priorities are:

--  the fight against international terrorism and proliferation.  Cyprus has been a valuable partner in the international coalition.  We have enjoyed its strong support on a multitude of levels: from upgrading the physical security and police presence around Embassy facilities; to improved security measures at ports and airports; tighter Customs controls; and cooperation from the Attorney General and the Central Bank on stemming the financing of terrorism.  Cyprus agreed to the UN request for the UNMOVIC and IAEA inspectors to establish their logistics base in Larnaca. We deeply appreciate this level of commitment, just as we look to strengthen our cooperation even further. 

-- law enforcement cooperation.  Our ability to cooperate was significantly enhanced in September by the entry into force of the Mutual Legal Assistance Treaty.  The treaty is an important new tool for bilateral cooperation to combat money laundering, terrorism and other crimes.  The Government of Cyprus has also undertaken several steps in recent years to raise its guard against financial crimes, especially international money laundering.  A prime example is Cyprus' adoption of international standard anti-money laundering legislation.  Cyprus has an active financial intelligence unit, which cooperates closely with leading international bodies, including our own.  Cyprus has the tools in place.  The next step is to strengthen enforcement with more dedicated resources.

-- commercial cooperation. Cyprus and the US enjoy excellent commercial relations, and the Embassy is working to make them even better.  In 2001, U.S. exports reached almost $370 million.  US brands, like Kellogg's, Athletes Foot, Nike and McDonalds are well represented on the island.  US services also abound.  US firms have expressed interest in or are bidding on government tenders worth over $2 billion.  This year, Eurocypria will take delivery of new Boeing 737s.   Even in the four brief months I have been in Cyprus, we met with a steady flow of American business representatives from companies such as Bechtel, Bell, Boeing, Pfizer, Raytheon, and Sikorsky. 

CYPRUS SOLUTION

Now to the defining issue – the “Cyprus problem.” 

I joined our Special Coordinator for Cyprus, Ambassador Tom Weston, in Copenhagen last month to lend U.S. support for the UN settlement process.   Copenhagen was a great success in many respects.  The EU approved Cyprus’ accession, something the United States has long supported.  The EU also set a date for Turkey’s own accession negotiations to begin.  Unfortunately -- for a variety of reasons, including the number of issues on the table -- no agreement on a Cyprus solution was reached on the basis of the UN proposal tabled November 11 and revised December 10.  A number of factors – such as the health of the Turkish Cypriot leader, Rauf Denktash, and the formation of a new government in Ankara – complicated the ability of the parties in November and December to come to grips with the complex UN proposal. 

However, despite significant differences which continue to divide the parties, the gaps are smaller than in the past.  Our challenge now is to take advantage of the work done and progress achieved in order to reach agreement by February 28. 

The EU decision to admit Cyprus has had a momentous impact, and remains a catalyst for efforts to achieve a comprehensive solution.   It has removed a big question hanging over the negotiations:  would the EU admit a divided island?  Greek Cypriots no longer feel threatened by the possibility of a delay in Cyprus’ accession – this sense of confidence can play a positive role in the solution process.  A settlement also means an open door to the EU for the Turkish Cypriot community. 

The EU’s approval of accession for Cyprus does not mean that settlement efforts are over  -- far from it.  The reasons for both sides to seek a comprehensive settlement remain as valid after Copenhagen as they were before.  The Copenhagen conclusions made clear the EU’s strong preference for accession by a united Cyprus and urged both sides to seek a negotiated settlement.  Statements by all the parties after Copenhagen reflect their recognition of the stakes involved and their commitment to negotiate the UN plan.

A Cyprus settlement will benefit Cypriots from one end of the island to another, economically, politically and culturally.  It would make a vital contribution to regional peace and stability as well as free all Cypriots to realize their full potential as the country joins the EU.  With a united Cyprus as part of Europe, the Turkish Cypriots will be able to transform their current depressed, isolated economy into one which benefits from the wider economic possibilities of normal international commerce, foreign investment and EU assistance.  A settlement providing political and economic security would be a catalyst for prosperity.  If both sides choose to take advantage of this opportunity then Cyprus’ full economic potential can and will be unleashed.

Deferring a settlement only makes achieving it harder.  Cyprus will gradually be fully integrated into EU structures, while Turkish Cypriots will remain outsiders.  And the lack of a Cyprus solution will continue to affect negatively other issues and relationships in the region, as it has in the past.

We believe that the UN’s settlement proposal remains the way forward to a solution.  It is well-crafted to balance the concerns of both sides, and provides the basis for a negotiated settlement.  UN Special Adviser De Soto is scheduled to return to the island January 14, after meetings in Athens and Ankara, to continue the political-level talks.  The two technical committees, established to work on common state laws and international agreements, are now up and running.  As the UN has emphasized, there is still time for the parties to agree -- provided they work hard, now.  The U.S. believes agreement can be achieved between now and February 28 and we urge all sides to intensify their efforts towards reaching a solution.   U.S. Special Coordinator Weston returns to the region next week to carry that message and underscore our support for the UN Secretary General’s Good Offices Mission.

Why February 28th?  Because meeting that date will allow both sides to hold referenda to ratify the agreement in time for Cyprus to sign its accession treaty in April as a united entity.

I am convinced that Cypriots on both sides can meet this goal.  Judging from Greek Cypriots and Turkish Cypriots I have met with over the past four months, there is a widespread perception that this period holds out a unique, historic opportunity.  People have told me that past settlement initiatives – including the extent of engagement by the international community -- did not produce this level of expectation, hope and, yes, anxiety.  The comprehensive, well-balanced UN proposal has concentrated minds on both sides.  During the weeks leading up to Copenhagen, there was a relentless focus in both Greek Cypriot and Turkish Cypriot media on the growing prospects for a settlement.  Although the disappointment after Copenhagen was palpable, the parties remain focused on the UN proposal and UN efforts are intensifying.   The Greek and Turkish Governments, moreover, have reaffirmed their support for achieving a Cyprus solution by February 28 as a matter of priority.

The large and unprecedented demonstrations taking place over the past few weeks in the Turkish Cypriot community testify to their strong interest in a solution and EU membership.  The demonstration on December 26 attracted the largest crowd to date.  Even taking the most conservative of estimates made of the crowd’s size, at a minimum, at least 20,000 people (and perhaps upwards of  30,000) crowded into the narrow lanes of old Nicosia, bearing placards and banners with peace signs and slogans like “We are Europeans,” and “Peace cannot be prevented in Cyprus.”  These 20,000 individuals represent a significant percentage of the entire population in the north.

Certainly, there will be difficulties as we continue efforts to reach a comprehensive settlement.  Both sides have to make tough but necessary compromises if the negotiations are to succeed in the limited time that remains.  The U.S. strongly encourages all sides to focus creatively and squarely on the greater, long-term good. 

Cyprus is located in a region that needs more stability, not less.  A settlement would remove a source of regional tension, and increase the EU's effectiveness as a positive and unifying force.  This is especially important as the international community fights the war against terrorism.  A solution would free Cyprus to play a larger regional role in this crucial time.