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Cyprus: Small Country, Big Presidency

Friday, July 6, 2012  |   |  Tags: , , , ,

On July 1, one of the EU’s smallest states and most recent members — the Republic of Cyprus — assumed the six month presidency of the E.U. With a U.S. Presidential election upon us, it is hard to fathom how a country with a population of under one million can be relevant for the rest of 2012. Make no mistake about it: Cyprus’ turn at the helm of the E.U. will be as consequential as any presidency worldwide for the rest of 2012.

There are three reasons why Cyprus’ presidency will be of such great consequence. The first has to do with the governance of the E.U. During Cyprus’ presidency, there will be more than 60 ministerial meetings, two meetings of heads of states or government and 1,500 working groups in Brussels. Beyond the Brussels-based meetings, it is estimated that there will be 45,000 visitors to Cyprus, which will host close to 300 meetings. Finally, there will be 15 informal ministerial meetings, 180 meetings of working groups and about 100 meetings of NGOs and interest groups under the auspices of this presidency.

If such a young state (just over 50 years old) with a relatively inexperienced civil service is able to have a successful presidency, it would be a good omen for the future of the E.U. If Cyprus can serve as an honest broker on issues that it has little stake in but affect the E.U. as a whole, it will advance the notion that issues that affect any member state are European — not just national — and every member state must play a role in solving them. A successful presidency will add valuable European experience to Cyprus’ civil service, and serve as a useful foundation for greater European political integration.

The second reason this presidency is important is that Cyprus takes the helm at the height of Europe’s financial crisis. Critics noted Cyprus becoming the fifth EU member to request a bailout, but Cyprus’ request was primarily motivated by the need to fortify its banking sector, which plays a major role in its economy and is especially vulnerable to the present financial crisis. Cyprus in fact has a public debt to GDP ratio that is below the European average, features a low tax rate that attracts an enviable amount of foreign investment, and with the recent discovery of significant deposits of natural gas in its Exclusive Economic Zone, stands on the brink of developing yet another major industry. Given that Cyprus’ public debt is not at the root of its present troubles, the short term boost provided to Cyprus through tourism and energy exploration, and the public relations impetus for making sure that the president of the E.U. does not suffer through a major crisis during its term, there is a high likelihood that the Troika and Cyprus will find a combination of growth initiatives and cuts that can serve as an alternative to the austerity-only policies that have failed.

Finally, although Cyprus has always been at the crossroads of civilizations (and civilizational conflict for that matter), its presidency comes at a time of particularly high tension in the eastern Mediterranean. The Arab Spring no longer appears to be an appropriate label for the region’s developments and the situation in Syria is becoming more violent. Israel’s only friendly border is in the Mediterranean, where its territorial waters abut Cyprus’ territorial waters. The U.S., having publically switched its focus to Asia, has appeared to outsource leadership in the region to Turkey, which has gone from a “zero problems with neighbors” foreign policy to being the bully on the block.

Ironically, Cyprus’ presidency can make the greatest progress in terms of Turkish-E.U. relations. Despite Ankara’s continued refusal to recognize the Republic of Cyprus, its boycott of all E.U. activities chaired by Cyprus, and continued military threats against Cyprus, the government of Republic of Cyprus has stated that it is willing to move E.U. negotiations with Turkey forward. Indeed, the Cypriots have even suggested moves that could be made to advance Turkey’s E.U. negotiations while at the same time making serious progress on ending the occupation of Cyprus. Turkey’s response to these overtures will clarify whether there is hope that the Erdogan government is serious about its Western orientation.

For the next six months Cyprus once again stands at the crossroads of civilizations — Europe and Asia, East and West, Christianity and Islam. The success of this presidency is in everyone’s interest.

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