Global Policy Forum

The European economic crisis has been particularly devastating for the continent’s Mediterranean states, with Cyprus emerging as the latest country to negotiate a so-called bailout. Cyprus has, for decades, been partitioned between its Greek controlled north and Turkish south.  The United Nations has managed the partition since the end of the country’s civil war in the 1970s, and efforts to establish a course of reconciliation and unification resulted in the border between North and South being opened in 2003. However, the country’s recent economic difficulties have impeded any momentum toward further reconciliation, and Cyprus must now manage an economic crisis along with efforts to repair a seemingly intractable division.   

By Louise Osborne

Leaving plates on tables and books open on desks, residents of the western coastal town of Famagusta fled quickly as thousands of Turkish troops advanced on their homes almost four decades ago.

The year was 1974, and Turkish troops had invaded the island driving thousands of Greek Cypriots from their homes in the northern towns, following a military coup that aimed to unite the island with Greece. "My parents got into their car and the only things they took with them, believe it or not, were two pillows, two blankets and the television," said Peter Karayiannis, whose parents then moved to Limassol in the south. "People were frightened... They thought they were going to return home after the fight was over but this never happened."

Since then, Cyprus has been divided by a U.N.-controlled zone known as the "Green Line," a border that was completely sealed off until a decade ago. Even though it has partially opened, those who lost their homes in the north during the brief conflict that year still long to permanently return. But a negotiated settlement to the conflict has remained elusive since the invasion, even as the partition has been the top issue on the island for decades.

Now, as Cypriots go to the polls to elect a new president this Sunday, some say the island's dire economy has overtaken the north-south dispute and side-lined negotiations for a permanent solution.

"The elections are crucial [to the reunification attempt]," said Okan Dagli, a member of the Famagusta Initiative think-tank. "But for the first time since 1974, the people in the south are much more involved with the economy than the Cyprus problem."

Last year, Cyprus became the fifth eurozone member to ask for a bailout. The country needs a rescue package of 17 billion euros, a figure that is close to its annual gross domestic product. European Commission officials refuse to confirm the specific bailout amount because negotiations are still on-going - the euro zone's finance ministers have so far failed to reach an agreement. Until this moves forward, the 'Cyprus problem' is on the backburner.

"[Now] it's all about the financial collapse of the Cypriot economy," said Hugh Pope, a project director for Turkey and Cyprus at the International Crisis Group. "It means the Cyprus negotiations are not going to be the first thing to happen."

There had been hopes that the current President Demetris Christofias would be successful in negotiating reunification of the country. But besides the economic crisis, difficulties with the Turkish-Cypriot president, Dervish Eroglu, who opposes a bicommunal federation, have stalled progress.

"He [Eroglu] is more interested in a confederal set up," said Erol Kaymak, a political scientist at Eastern Mediterranean University in northern Cyprus and an adviser to Eroglu. "The problem with that is that the international community is not interested in a two-state solution or a confederal set up."

With Christofias not seeking re-election, the negotiations will pass to the next president. Although Nicos Anastasiades of the center-right Democratic Rally party did not win enough votes to win outright in the first round of elections Feb. 17, he is strongly tipped to win in the runoff elections on Sunday.

Anastasiades is a fervent supporter of the Annan Plan, a U.N. proposal for a "United Republic of Cyprus" consisting of two states, which was rejected by a majority of Greek Cypriots in 2004. With this impasse and an economy on the verge of collapse, analysts believe that negotiations might be shelved indefinitely.

That upsets many Cypriots, both north and south of the Green Line, who want to see a solution. "Cyprus was originally one Cyprus," said Dervis Yagcioglu, a shop owner in Cyprus's divided capital city Nicosia.

Georgia Constantinou, 25, a shop assistant working in Paralimni, just south of Famagusta, says the current divide is untenable. "For me, I don't like the situation as it is now," she said. "I only crossed the border once and I had the feeling like I was back in 1974. It was all backward... like time has stopped. I just want it to be the way it was before, like in other countries."

Meanwhile, families wait to see if they will ever be able to go back to the homes they were forced to flee.

Despite the opening of the border in 2003, Varosha, a district in Famagusta, remains surrounded by barbed wire and armed guards with signs warning people not to take pictures of the crumbling hotels and decaying houses -- the last remnant of what had been a united Cyprus. Under the Annan plan, Varosha was to be returned to Greek Cypriot control, but since the plan failed and a U.N. Security Council resolution forbid Turkish settlement of the area, it has stood abandoned for years.

That area includes the home that Michael Papamichael and his wife shared after they married, and then were forced to abandon. "People want their houses back and we try hard, but unfortunately we don't get anywhere," said the 71-year-old, who now lives in London. "Nobody lives in our house. There's barbed wire everywhere."

Papamichael would like to return home and work to rebuild what had once been the bustling center of tourism on the island. "We all want to go back," said Papamichael. "And personally, I believe if we had [Varosha] back we could rebuild the town slowly and make it what it once was."

Others, like Karayiannis, are able to visit their former homes which are situated in Famagusta outside the fenced off area of Varosha. But they can't reclaim them because they now belong to Turks and Turkish Cypriots, who were moved into the area following the invasion.

"We went to the house and I didn't recognize it," said Karayiannis. "The area used to be surrounded by orange groves, which unfortunately, having stayed without water during that period, died and so there's no greenery whatsoever...I went past it before I realized and stopped."

"It felt really strange but I didn't show any emotion," he added. "The interesting thing was that we were sitting there and I saw a crack on the roof and suddenly the lady [who lives there], who was a Turkish Cypriot married to a settler from Anatolia complained that in the winter, water comes in through the crack. She was saying it in such a way like she was pleading for me to get it fixed for her, as if she was realizing that the house was not hers."