Better policies for a competitive and fair Europe A report on the Cyprus Presidency of the Council of the European Union - More Info: European Voice. http://www.europeanvoice.com/folder/thecypriotpresidencyoftheeu/213.aspx

1. 16
21 June 2012
SPECIAL REPORT
The Cypriot presidency of the EU
Times are diffi- ARCHIVE it will boycott the presidency
in its entirety. The Turkish
cult, but success Cypriots are largely ignoring
the presidency. But the dan-
is not beyond ger remains that Cyprus’s
Cyprus’s reach as non-relations with Turkey
will surface as a problem.
it takes over the Any presidency’s inten-
tions can be blown off course
presidency of the by unexpected challenges.
EU, writes And Cyprus’s aspirations to
be an honest broker would
Andrew Gardner mean little if it lacks the staff
to broker deals. For Cyprus,
Cyprus starts out on its pres- the challenge is all the greater
idency of the European because it is, geographically,
Union’s Council of Ministers the most remote presidency
knowing that expectations that there has ever been.
are low and apprehension is The national air carrier has
high. The intractable division responded by setting up six
of its Greek south and Turk- direct flights a week from
ish north has made Cyprus a Nicosia to Brussels for the
synonym for division. This duration of the presidency,
presidency will be adminis- but the main decision has
tered only by the Greek been to make this a Brussels-
Cypriot government, which based presidency. Informal
rules over a population of just ministerial meetings will be
800,000. The permanent held in a conference centre in
Right place, wrong time?
representation to the EU Nicosia, newly revamped for
normally numbers just 80 the presidency, but almost all
people. other meetings will be held in
Even in ordinary times, Brussels. The permanent
these handicaps would make representation in Brussels
the presidency a challenge. has been swollen to 230 peo-
But these are not the best of ple for a year, by re-deploying
times: the eurozone is in cri- fective. Hungary’s Prime ment points out that it has tural or Fisheries Policies. caused Cyprus not to recog- civil servants who normally
sis, neighbouring Greece is Minister Victor Orbán fo- just one national priority, an Cyprus contributes more nise Kosovo as a state. It even work in Nicosia.
in turmoil and, just half a cused on his domestic inter- integrated maritime strategy than it receives from the EU’s contributes to the closeness This mobilisation, which
day’s boat trip away, Syria is ests, and treated the presi- (see opposite page). The rest budget, which, politically, of Cyprus’s relationship with includes the creation of a post
in flames. dency as a responsibility to be of its agenda is inherited, and should make it easier to Russia, which may this sum- of minister of EU affairs
That need not doom left largely in the hands of the its approach to the agenda is achieve its aim of champi- mer save it from an EU and specifically for the presiden-
Cyprus’s presidency from the civil service. to be an honest broker. oning solidarity. It claims to International Monetary cy, is a mark of an adminis-
outset. Other presidencies The government says the be a small country with few Fund bail-out. The success of tration that is being stretched
have also had ill-starred Cypriot presidency (or An honest broker irons in the fire. the presidency may depend by its responsibility to the
starts. Within days of assum- Cyprus presidency, as it in- For a country of its size and But the one big iron that on whether the issue of EU. Unsurprisingly, then, the
ing the presidency in 2011, sists on calling it, in another economic structure, the role remains has caused many Turkey can be anaesthetised presidency is limiting its own
Hungary was caught in a po- sign of community sensitivi- of honest broker comes nat- problems. The division of the for the duration of the presi- ambitions.
litical storm about its media ties) is an opportunity – but urally. The Cypriot popula- island has retarded progress dency. Low expectations may
law, which continued to for self-transformation and tion depends on services, in the EU’s relationship with Cyprus itself does not in- have a benefit for the presi-
thunder, yet the presidency modernisation, rather than rather than on money from Turkey, complicated the EU’s tend to raise issues related to dency: it leaves room for wel-
was generally praised as ef- self-projection. The govern- the EU’s Common Agricul- security ties with NATO, and Turkey. Turkey has said that come surprises.
MIGRATION AND ASYLUM
Money worries and border battles Cyprus lies in a difficult neighbourhood; Syria’s and Lebanon’s ports
lie half a day’s boat trip away, and Turkey, its nearest neighbour, is the
main transit country for migrants seeking to reach the EU. That is
fated to lose. But the defini- broker does not mean being a why Cyprus worries about migration, especially illegal migration.
The euro and the Schengen area are tion of loss and victory is not neutral broker.
On a visit to Malta earlier this month, Demetris Christofias, the
president of Cyprus, said that the two Mediterranean islands had
daunting challenges for the Cypriots, whether Cyprus gets its way. On some of the other big “common worries and interests” over irregular immigration. “We’re
Rather, says another diplo- items for the EU – including not racists but we must defend the rights of our countries,” he said.
writes Andrew Gardner mat, from a previous presi- the Common Agricultural Amnesty International, an advocacy group, said this month that
dency, success means proving Policy – it will not have much Cyprus detained too many asylum-seekers and other migrants, often
The contours of Cyprus’s The Cypriot analysis is that to other member states that it influence, but Cyprus’s envi- in poor conditions, and pointed out various deficiencies in its laws.
presidency may be signifi- “90% to 95% of the presiden- has done everything it can – ronmental agenda has prior- The figures are low; but Cyprus feels vulnerable to the vagaries of
cantly adjusted just days be- cy will be economic”, which is showing that, if a deal is elu- ities that are attainable – migration flows.
fore the presidency starts, why the presidency has sive, it is because of national agreements on trans-Euro- This exposure could make it difficult for Cyprus to act, or be
perceived, as an honest broker in the complex negotiations currently
when EU leaders meet in brought more civil servants to capitals. pean networks, on monitor- under way between member states, and between member states and
Brussels on 28-29 June. Brussels from the finance ing greenhouse-gas emis- the European Parliament, on the various elements of the Common
The Cypriots are painfully ministry in Nicosia than from Technical issues sions, on water use, and a European Asylum System, which is supposed to be launched by the
aware that the eurozone debt the foreign ministry. One of The Polish presidency in the successor to the LIFE+ envi- end of the year.
crisis is in flux. Its own econ- these officials’ tasks will be to second half of 2011 did “a very ronment fund.
omy – otherwise largely de- prepare meetings of finance good job of clearing technical Agreement on these issues
tached from Greece – is being ministers, which the presi- issues”, he says. Denmark has would offer some consolation
SCHENGEN
dragged down by Cypriot dency argues will be easier for been trying to push talks if its own national priority – to Another issue that will land in Cyprus’s lap is the EU’s Schengen area
banks’ exposure to Greece. Cyprus than it was for the ahead as far as possible with- revive the notion of an inte- of borderless travel. The European Parliament last week suspended
And the eurozone’s troubles previous three presidencies – out putting numbers on the grated EU maritime policy – co-operation on justice and home-affairs matters with Denmark, the
are not contained. “Two sym- Denmark, Hungary and table. The task that faces proves too much of a chal- current holder of the rotating presidency, because of a decision by
member states to change the legal basis of a proposal for revised
bols of the EU itself are under Poland – because Cyprus is a Cyprus is to harness the “very, lenge (see article overleaf). rules on Schengen, in effect excluding MEPs from decision-making.
threat – the euro and the member of the eurozone. very strong need to agree” Cyprus has so far escaped MEPs’ censure, but that may change once
Schengen zone,” says a presi- The other daunting chal- positions and to communi- Syrian concerns it falls to Cypriot diplomats to represent the Council’s view in talks
dency spokesman, going on lenge is negotiations on the cate well enough to ensure Syria is the likeliest external with the Parliament.
to argue that the economic EU’s spending for 2014-20, the political ground is well source of difficulties for the The Dutch government is expected to drop its opposition to Bulgar-
crisis and the accompanying the multiannual financial prepared for a deal. presidency. Cyprus’s proxim- ia’s and Romania’s membership of the Schengen area following the
erosion of trust are encourag- framework. Cyprus’s own position em- ity to the Middle East will un- Dutch parliamentary election in September. That would leave Cyprus
ing proponents of limits on The long-term budget phasises solidarity. It is one of doubtedly make it sensitive to as the only country in the EU apart from the UK and Ireland that
border-free travel and rein- touches on every issue. “It is a the 15 members of the developments in the region remains outside the Schengen area, because the recognised
government does not control the entire territory of the island.
forcing opposition to sharing litmus paper,” says a diplomat Friends of the Cohesion Poli- and, if foreign-policy initia-
the burden of coping with il- from another member state, cy trying to protect the policy tives emerge during the pres-
legal migration, an important and “without a good narrative from cuts by the largest con- idency, they might well relate with both the Arab world and kept its embassy in Tripoli
concern for Cyprus and other on that, they will have lost”. If tributors – an affiliation that to that region. Cyprus likes to Israel, and it has during the open. These six months may
Mediterranean states. so, a small country might be demonstrates that an honest talk up its friendly relations Libyan crisis, like Hungary, test the value of those ties.

2. THE CYPRIOT PRESIDENCY OF THE EU 21 June 2012
17
An island of alliances and divisions
EU officials will be relieved International Crisis Group, a
that the Czech scenario, of think-tank. AKEL has not yet
a government collapsing chosen a candidate and is
halfway through its turn at non-committal about a possi-
the helm of the EU’s Council ble alliance with DIKO.
The Cypriot president will not contest AKEL, who came second. In DIKO – which opposes ac- of Ministers, is unlikely to be DISY, the moderate, cen-
the week that separated the commodation with the Turk- repeated. In any case, it is less tre-right opposition party, will
the next election, and it is unclear who two rounds, DIKO swung its ish Cypriot community – of a problem for a Cypriot send Nicos Anastassiades, its
support behind Christofias, ended up impeding the new government to lack a parlia- leader, into the race. Pope de-
his successor will be, writes Toby Vogel who won the presidency with president’s ability to strike a mentary majority than it scribes Anastassiades as “a lit-
53.4% to Kasoulides’s 46.6%. deal in the reunification talks, would be in other member tle untested”, but says that he
The last presidential election Kasoulides had cam- The episode illustrates a which he launched within a states. “Patronage and lever- has “one of the most positive
in Cyprus, on 17 February paigned in favour of a United point made by James Ker- month of his victory. age is far more important approaches to the Cyprus
2008, produced a surprise: Nations settlement plan in Lindsay, a research fellow at Following DIKO’s depar- than legislative work,” says problem”. “He was brave
the incumbent, the right- 2004, Papadopoulos had the European Institute of the ture from the ruling coalition Ker-Lindsay. The ability to enough to say ‘Yes’ and cam-
wing nationalist Tassos Pa- been against it. The plan, London School of Economics last year, after a blast at a navy hand out jobs depends on paign for the Annan plan in
padopoulos from the Demo- named after the UN secre- and Political Science. “Even base knocked out more being in power, not on being 2004,” Pope says.
cratic Party (DIKO) failed to tary-general of the time, Kofi though Cyprus has a presi- than half of the republic’s effective in power. But the shift in voters’ at-
win enough votes to proceed Annan, was rejected by the dential system, politics is all power-generation capacity, tention from the island’s divi-
to the second round, held one Greek Cypriots in a referen- about coalitions,” he says. “The Christofias now heads a mi- No frontrunner sion to the parlous state of its
week later. He was beaten by dum just days before Cyprus Cypriot president has more nority government that in- What might emerge from economy has created a new
Ioannis Kasoulides from the joined the EU. But Ka- power than any other Euro- cludes several technocrats. February’s presidential elec- dynamic in domestic politics
centre-right Democratic Ral- soulides was fewer than pean leader, but in order to get But until his term in office tion is unclear. “The race is in Cyprus. How this might
ly (DISY), with 33.5% of the 1,000 votes ahead of elected he needs to strike deals ends in February, Christofias wide open,” says Hugh Pope, play out next February will
vote against Papadopoulos’s Demetris Christofias, the with other parties.” and his government are se- a researcher on Cyprus and become clearer during the
31.8%. candidate of the Communist Christofias’s alliance with cure. Turkey in Istanbul with the next six months.
Back from
the depths CYPRUS:
In 2007, the Portuguese
presidency of the Council of
A Dynamic International Business CYPRUS
INVEST WITH CONFIDENCE
Ministers spearheaded an
‘integrated maritime policy’ and Financial Centre at the
that contained a great many
promises. The packed action
plan promised to establish a
Crossroads of Three Continents
network of “motorways of
the sea” throughout Europe,
eliminate illegal fishing, and
mitigate the effects of cli- “We are very happy to have selected
mate change on coasts. Cyprus as a base and aspire to maintain,
Five years later, and there
is no integrated maritime lead and expand our operations
strategy. “There was a lot of from the island. Cyprus’ accession
discussion...but since then
we have not heard much to European Union has enhanced the
about it,” said Eleni Mari- country’s credit standing, transferring
anou, secretary-general of
the Conference of Peripher- the image of a low tax jurisdiction to
al Maritime Regions.
a serious regional trading and service
Cyprus, as a maritime
island state, says reviving the hub. We also believe that the Euro
policy is one of the main
Zone entry upgrades the country’s
goals of its period at the head
of the EU. In October, an in- standing within the European Union.”
formal ministerial confer-
ence will be held in Mehran Eftekar, Director
Limassol with the aim of Nest Investments Holdings
producing a ‘Limassol decla-
ration’ that sets out the pri-
orities for action. Cyprus is an attractive investment destination and a reputable international business
Earlier this month, and financial centre that provides a gateway to Europe, the Middle East and North
Efthemios Flourentzou,
Africa. Cyprus provides a thriving market oriented economic system combined with low
Cyprus’s minister for com-
cost and flexibility features along with:
munications and works,
said the declaration would
mark “a new drive for the Lowest corporate tax regime in the EU of 10%
further development and A centre for Banking Excellence and an Alternative Funds jurisdiction
implementation of this in- Effective and transparent tax system that is fully EU, OECD, FATF and FSF compliant
novative, cross-cutting Access to EU as a member state since 2004 and a member of the European Monetary
policy”.
Union since 2008
An extensive network of Double Tax Treaties with 43 countries
Progress report
The European Commission Relatively lower operating costs with high quality end-to-end business services
is expected to present a Highly qualified and well-trained professionals who provide expertise on all aspects of
progress report on the inte- If you are looking for banking, legal, accounting and business services
grated maritime policy at a new business and Advanced transport and telecommunications infrastructure with state-of-the-art high-speed
the October conference, internet and mobile telecommunications, two International airports and deep-sea ports
which will be attended by investment gateway, take
Maria Damanaki, the Euro- the time and consider Cyprus offers ease of doing business in a professional environment and the
pean commissioner for fish-
eries and maritime affairs, Cyprus. Combining a surroundings of a sophisticated culture and advanced quality of life. More than just
and José Manuel Barroso, a holiday destination, Cyprus provides the ideal environment to set up your business
the president of the Com-
rewarding standard of operations effectively and efficiently.
mission. living in tune with nature
The declaration will not
contain plans, dates or dead- and Cypriot hospitality,
Cyprus has more than 30 years experience
lines. But it will indicate pol- Cyprus is a dynamic place as an International Business and Financial Centre
icy areas that need to be
strengthened and ways in to live and work!
which maritime policies can
be better linked. P.O.Box 27032
Lefkosia 1641, Cyprus
The Cypriot government Tel. + 357 22 441133
Fax + 357 22 441134 The Ministry of Commerce, Industry and Tourism
hopes that this push for an www.cipa.org.cy Tel. + 357 22 867100, Fax + 357 22 375120
integrated policy will last info@cipa.org.cy www.mcit.gov.cy/ts, perm.sec@mcit.gov.cy
longer than its predecessor.
Dave Keating

3. 18
21 June 2012 THE CYPRIOT PRESIDENCY OF THE EU
Cyprus’s movers and shakers
DEMETRIS CHRISTOFIAS
President
Demetris Christofias, the president of the Republic of Cyprus, has always stood out among European leaders. He is the
only Communist in a group dominated by the centre-right; he is the only president in the EU to head his country’s
government; and he is one of just two presidents to hold real executive power (the other is the president of France).
But, last month, Christofias announced that he would not seek re-election next February, when his current five-year term
ends. The political career of the 66-year-old appears to be over, and he will leave the public stage a much-diminished
figure. The Progressive Party for the Working People (AKEL), of which Christofias has been a member since the age of 18,
has yet to choose a successor.
When Christofias was elected president early in 2008, hopes were high that he might be the man to bring about the
reunification of the island and reconciliation between its Greek and Turkish communities. Not since Turkey’s invasion and
occupation of around one-third of the island in 1974 – in response to a coup attempt hatched by the military junta that
then ruled Athens, and aimed at uniting Cyprus with Greece – had the conditions appeared so conducive to a settlement.
Barely one month after his election, Christofias launched settlement talks with Mehmet Ali Talat, the centre-left leader
of the Turkish-Cypriot community. But four years of negotiations have failed to break the deadlock, leaving Christofias,
who had made achieving a settlement the prime objective of his presidency, with very little to show for his period in
office.
Talat was voted out as leader of the Turkish Cypriots in 2010, to be replaced by Dervis Eroglu, a far less conciliatory
¸ ˇ
figure from the centre-right. Christofias’s coalition with the centre-right Democratic Party (DIKO), which rejects accom-
modation with the Turkish Cypriots, was a further complication. A deadly explosion at an ammunition dump last summer
– for which the government was held responsible – prompted the DIKO to drop out of the coalition, forcing Christofias to
form a largely technocratic government that lacks a strong majority in parliament.
The dire state of Cyprus’s economy, with its massive exposure to Greek debt, has now replaced the division of the
island as the dominant political issue. Christofias’s main legacy might well be that Greek Cypriot politics has taken a step
towards normality, and away from a transfixing obsession with the problem of Turkey’s occupation.
Toby Vogel
ERATO KOZAKOU-MARCOULLIS VASSOS SHIARLY
Foreign minister Finance minister
Given the vagaries of ministerial appointments in The man who will occupy arguably the hottest
Cyprus – horse-trading can sometimes hamper seat during the Cyprus presidency is a respected
the island’s international agenda – many in banker rather than a politician. Appointed finance
Cyprus were reassured when Erato Kozakou- minister just three months ago, Vassos Shiarly is
Marcoullis, an experienced career diplomat, was the third person to hold the post in just over four
put in charge of the foreign ministry in August years, following his predecessor’s resignation after
2011. Kozakou-Marcoullis, 63, had been minister six months, for health reasons.
of communications and works since March 2010, Christofias has not been the ideal boss for
having served as foreign minister for seven finance ministers; he has habit of publicly dis-
months under Tassos Papadopoulos, Christofias’s predecessor as president. agreeing with or even disowning measures to
Kozakou-Marcoullis has a reputation for hard work and is very ready to give face-to-face reduce the budget deficit.
interviews to explain the complexities of the divided island – the primary task of any Cypriot Shiarly, 64, will have to draw on all his experience to negotiate the challenges of the next
foreign minister. She is also proud of her heritage and traditions, on one occasion donning six months. First there is overseeing the negotiations on the 2014-20 multiannual financial
national dress to meet former US president Bill Clinton in Washington, DC. framework. Then – unless Cyprus finds a bilateral lender (a €4 billion loan by Russia is being
After gaining two law degrees in Athens, in 1979 Kozakou-Marcoullis completed a PhD in so- talked about) – it is likely that he will be chairing meetings of finance ministers while the
ciology and political science at the University of Helsinki. When her husband took a job in Eurogroup of eurozone finance ministers considers a request from Cyprus for an international
medical research in New York, she became part of the permanent mission of Cyprus to the bail-out.
United Nations from 1980 to 1988. Shiarly is widely regarded as having the tools to succeed: a hard worker who achieves his
From 1996 to 1998, she served as ambassador to Sweden, with responsibility for the other aims quietly and with determination, someone who considers his words carefully. After 18 years
Nordic countries and the three Baltic states. She spent the next five years as ambassador to in accounting in the United Kingdom, he left a senior position with Coopers & Lybrand to return
the United States, and was also Cyprus’s link to to the World Bank, the International Monetary to Cyprus in 1985, where he joined the Bank of Cyprus, rising to group chief general manager in
Fund, the International Civil Aviation Organization and the Organization of American States. 2010.
Later, while serving as a director at the foreign ministry in Nicosia, she was ambassador to He has already set an example when it comes to cutting costs – after waiving his minister’s
Lebanon and Jordan. salary, Shiarly travelled economy class on a recent trip to Malta with Christofias. The
As well as representing Cyprus at international bodies, Kozakou-Marcoullis has crucial question is whether he will be allowed to deliver the budget cuts that have been
published academic studies, and lectured in universities and to think-tanks worldwide. promised.
Charles Charalambous Charles Charalambous
ELENI MAVROU first female interior minister was the latest She was not, however, an overnight success.
Interior minister milestone in a lengthy political career that Mavrou, 51, has been politically active since her
includes five years as the first female mayor of student days, when she studied for a degree in
Eleni Mavrou is an exception in Cypriot politics. the capital, Nicosia. politics and international relations at the Uni-
She is well-grounded in the local left-wing When she began her term as mayor in 2006, versity of London. Already a member of the
tradition, which at national level tends to Mavrou emphasised that while tackling the central committee of the Progressive Party of
favour male politicians with largely predictable major challenges – modernising infrastructure, Working People (AKEL), with responsibility for
profiles and performances to match. But she reviving the city’s historic centre, restructuring local government, she served two terms as a
also fits easily into the familiar European leftist council services, cutting bureaucracy, getting Nicosia municipal councillor in 1986-96.
mould: a successful female politician who is access to European funding – she would aim to In 2001, she was elected as an MP for because she could have a direct impact on
articulate in more than one language and encourage greater participation by citizens in Nicosia, and from 2003 also served as an people’s lives. It will be interesting to see how
regarded as accessible, hard-working and social and cultural affairs. In particular, she observer at the European Parliament. But after she applies her experience to her wide-ranging
down-to-earth. thought her success would encourage more being re-elected as an MP she stood for mayor duties as interior minister.
Her appointment in March as the country’s women to become involved in politics. of Nicosia, regarding it as a bigger challenge Charles Charalambous

4. THE CYPRIOT PRESIDENCY OF THE EU 21 June 2012
19
ANDREAS MAVROYIANNIS KORNELIOS KORNELIOU
Deputy minister for European affairs Permanent representative to the EU
When the preparations for the EU presidency Cyprus’s preparations for its presidency of the
became mired in controversy and accusations of Council of Ministers began badly. The head of the
nepotism in October 2011, the man chosen by EU secretariat in Nicosia, Andreas Moleskis,
Christofias to get things back on track seemed resigned in mid-2011 amid complaints about nepo-
ideal for the job. tism in recruitment practices. There was a three-
At that point, career diplomat Mavroyiannis, 55, had spent three years in Brussels as Cyprus’s month hiatus before a successor was appointed,
ambassador and permanent representative to the European Union, and so was very familiar Andreas Mavroyiannis, who was Cyprus’s perma-
with the European approach to consensus-building and problem-solving, and in particular with nent representative to the EU. In turn, that left a
the challenges associated with the presidency of the Council of Ministers. significant vacancy in Brussels, which was filled by
In contrast to the bombast, short-termism and opportunism that often characterise the appointment of Kornelios Korneliou, who took over in October.
domestic politics in Cyprus, the presidency will require political vision and leadership on a The 48-year-old Korneliou has sufficient experience to steady the boat. He was Cyprus’s
wider scale, something that Mavroyiannis is well aware of. It will also demand coherence and deputy ambassador to the EU between 2000 and 2007 – and has spent years in some of the
consistency in acting on behalf of the Council with other institutions. Another cultural most senior positions in Cypriot diplomacy, including ambassadorships in Paris (from where he
challenge – in political terms – will be to deal with the massive organisational demands in a was re-assigned to his current post) and Vienna, a position that also involved representing
timely and effective way. Mavroyiannis appears to have the skills and experience. After a brief Cyprus’s interests to the Organisation for Security and Co-operation in Europe and the UN’s
academic career in law – he obtained his postgraduate qualification and doctorate in France – organisations. He was also, in 2008-10, the chief of staff of the then foreign minister Markos
he joined the Cypriot diplomatic service in 1987. Since then, he has served as ambassador to Kyprianou, who had previously served as Cyprus’s first European commissioner.
Ireland (1997-99), France (1999-2002) and the UN (2003-8), and in various other foreign min- Korneliou is said to be good with staff, an asset that is particularly important since his team has
istry posts. Drawing on his time as an expert on EU affairs at the Civil Service College of Lon- been almost quadrupled for the duration of the presidency. Another challenge will be managing
don (1994), the soft-spoken Mavroyiannis has been putting senior civil servants through a relations with other member states, but he can already boast familiarity with Germany. He was
crash-course in EU affairs. His task was made harder by the reshuffling of three of the 11 minis- for five years a political-science student in Munich (where he wrote a thesis on the impact of EU
terial posts in March, but despite such setbacks, he is satisfied that his team is more confident membership on Greece) and spent five of his early years in diplomacy in Berlin.
and prepared for the task in hand than last October. Andrew Gardner
Charles Charalambous
NEOKLIS SYLIKIOTIS WHO CHAIRS WHICH COUNCIL IMPORTANT DATES
Commerce, industry and tourism minister General affairs: Andreas Mavroyiannis 5-6 July: European Commission visits Cyprus
Economic and financial affairs: Vassos Shiarly 7-8 July: Informal meeting of environment
Justice and home affairs: Eleni Mavrou (home affairs), ministers
After it was confirmed early this year that Cyprus Loucas Louca (justice and 7-8 September: Informal meeting of foreign
was sitting on substantial offshore reserves of natu- public order) ministers
ral gas, few were surprised when Neoklis Sylikiotis Employment and social affairs: Sotiroula Charalambous 14-15 September: Informal meeting of
Health: Stavros Malas finance ministers
was moved from the interior ministry to manage a Science and research: Stavros Malas 18-19 October: European Council meets,
process that will play a crucial role in determining Agriculture and fisheries: Sofoclis Aletraris Brussels
Cyprus’s economic future. Environment: Sofoclis Aletraris 26 November-7 December: UN summit on
Education, culture and sport: Giorgos Demosthenous climate change, Doha, Qatar
Seen as a safe pair of hands by Christofias, Transport, telecommunications: Efthymios Flourentzou 13-14 December: European Council meets,
Sylikiotis has been a committed member of the Energy: Neoklis Sylikiotis Brussels
ruling AKEL party since his student days in the mid- Competitiveness, internal market: Neoklis Sylikiotis A draft calendar has been posted on the
temporary website: www.cy2012eu.gov.cy
1980s, holding a range of party positions. The minister is acknowledged, even by his political The presidency website, cy2012.eu, is to go
opponents, as someone who gets the job done. He has a reputation for working hard – some live this week.
jokingly say that he never sleeps – and for being strong-willed and, occasionally, “a bit intense”.
Sylikiotis, 53, is one of only two ministers to survive from the first cabinet appointed by
Christofias in February 2008, having served as interior minister for ten months in the previous
coalition government. During his time in charge of the interior portfolio, Sylikiotis backed a range
of policies that tackled overly-bureaucratic government processes, including a radical reform of
local government and legislation to untangle the town-planning process. He also earned the
respect of his European peers for work on the Common European Asylum System and migration
policy along the EU’s Mediterranean borders. Sylikiotis’s commitment to the plight of asylum-
seekers is rooted in his own past. He has talked openly about the xenophobia he encountered as
a mechanical engineering student in Germany. In 2007, having resigned from the cabinet when
AKEL left the government coalition, he attended a demonstration in support of asylum-seekers –
this at a time when Cypriots very rarely took the streets.
Charles Charalambous
SOTIROULA CHARALAMBOUS
Labour and social insurance minister
Sometimes, the measure of a government
minister’s success is an absence of newspaper
headlines. That was the case until recently for
Sotiroula Charalambous, but with the Cypriot econ-
omy suffering, it is likely to change.
A political sciences graduate of the Sofia Academy
of Social Science and Social Administration, a
former official for the PEO, a trades union federa-
tion linked to the left-wing ruling party, and an MP
since 2001, Charalambous’s approach to carrying out her duties as labour minister has held no
ideological surprises in terms of dealing with the social partners.
When Christofias appointed her to his cabinet in February 2008, the national budget was still
in surplus and the effects of the global crisis had not yet reached Cyprus, so labour relations
were peaceful. Today, the picture is very different. Against a background of a budget deficit and
a growing public debt that has been condemned to ‘junk’ status by credit-rating agencies,
unemployment has passed the 10% mark and is on an upward trend. It is the worst jobless rate
in decades, especially in the construction, trade and manufacturing sectors, with more than a
quarter of all under-25s out of work.
Charalambous, 49, has a reputation for keeping on top of her policy issues, holding her own in
negotiations, and not shying away from a fight with the opposition. Now she is facing the
prospect of a hard sell to her traditional constituency, in terms of the structural economic
changes likely to be set as conditions of a possible bail-out.
Charles Charalambous

5. 20
21 June 2012 THE CYPRIOT PRESIDENCY OF THE EU
On the edge of a bail-out GOOD NEIGHBOURS
Demetris Christofias and
Benjamin Netanyahu.
REUTERS
ON BORROWED TIME
Cyprus Popular (Laiki)
Bank. REUTERS
With friends like these...
count on Israel,” he says.
Closer ties with Israel may benefit “Turkey-Israel is a much
most notably Nicolas
Cyprus in the short-term, but it could bigger story than anything
to do with Cyprus.”
Cyprus will almost certainly need Sarkozy, the then president eventually find itself isolated in the Should there be a recon-
international financial assistance, of France, to raise its corpo-
region, writes Toby Vogel ciliation between Ankara
ration tax rate, also one of and Tel Aviv, Cyprus would
but that may not come from the the EU’s lowest, when it re- again find itself isolated
eurozone, writes Ian Wishart quested a bail-out. Ireland Over the past few years, agreements on defence in the eastern Mediter-
succeeded in preventing any the strategic environment co-operation, on the ex- ranean.
Cyprus’s banking sector has a loan to the Eurogroup of change, but the issue did not in the eastern Mediter- change of intelligence, and
taken a massive hit because eurozone finance ministers, help in its negotiations to get ranean has changed radi- on search and rescue mis- Frustrating talks
of its exposure to Greece. an EU official said on Tues- a better deal, particularly in cally. Israel’s raid in May sions. The one development that
One senior EU official, re- day. the interest rate it paid on 2010 on a Turkish vessel However, the new would dramatically alter
viewing Cyprus’s economic Cyprus last year avoided a the bail-out loans. seeking to deliver aid to Israel-Cyprus alliance has this, of course, is the reuni-
situation, said this week that eurozone bail-out by negoti- On the other hand, the Gaza strip provoked a its limits, and the realign- fication of the divided is-
it had “heavily depleted ac- ating a loan of €2.5bn from Cyprus’s government will be fall-out between the two ment may turn out to be land and the withdrawal of
cess” to financial markets. Russia and may do so again. wary of looking too deeply countries, the region’s clos- short-lived. “Let’s not fool the Turkish troops that
Cypriot banks suffered “in- “We are optimistic we will reliant on funding from Rus- est allies. The discovery ourselves: Israel is not have been occupying one-
ordinately” when the private get the financing we need to sia just as it takes over the late in 2011 of gas reserves going to defend anyone third of its territory since
sector agreed to take hair- recapitalise the banks, presidency of the Council of off Cyprus’s coast – adja- but itself,” says Ioannis 1974. But after four years
cuts as part of Greece’s bail- whether that will be through Ministers. cent to Israel’s massive Kasoulides, a centre-right of fruitless talks, with
out, with huge Greek debts a bilateral agreement, or Cyprus’s influence in shap- Leviathan field – by Noble MEP who was Cyprus’s United Nations facilita-
written off. through the mechanism, the ing the response to the euro- Energy, an American firm foreign minister from tion, prospects for a settle-
It means that Cyprus EFSF,” Vassos Shiarly, zone’s sovereign debt and part-owned by Israeli in- 1997-2003. Nevertheless, ment have receded. “I
might be obliged to become Cyprus’s finance minister, banking crisis will be limited. vestors, generated excite- Kasoulides, from the op- don’t believe now what I
the fifth eurozone country to said on Tuesday. Most policy is being shaped ment among the Greek position Democratic Rally used to believe six months
call upon the European Fi- in national capitals, between Cypriots; and displeasure (DISY), says the Cypriot ago,” says Kasoulides,
nancial Stability Facility Corporation tax the leaders of the eurozone’s in Turkey and among the government has every “that these talks will go
(EFSF), the currency bloc’s Cyprus sees advantages in largest economies, France, Turkish Cypriots, who say right to exploit its hydro- anywhere.” Technical talks
rescue fund. However, it getting the money from out- Germany, Italy and Spain, that the island’s energy carbon resources. “I don’t will continue, but that is
might yet go down a differ- side the EU because it would and by the team working for wealth does not belong just think mankind can sit on not the level at which a so-
ent route from Greece, Ire- not have to submit to the aus- Herman Van Rompuy, the to the internationally- trillions of tons of natural lution will emerge.
land, Portugal and Spain, terity and structural reform president of the European recognised Republic of gas and wait for the Cypri- In the meantime,
and instead take a bilateral conditions that the eurozone Council. Cyprus but to all inhabi- ots to solve their prob- Cyprus’s exposure to Greek
loan from a country outside places on bail-outs. Such However, as the first coun- tants of the island. lems,” he says. debt has deepened tradi-
the EU. conditions might well bring try to take over the presiden- In February, Benjamin Hugh Pope, a Cyprus tionally close ties with Rus-
Cyprus faces a deadline of into the spotlight its corpo- cy while itself experiencing Netanyahu became the and Turkey analyst with sia. Last year, Cyprus se-
30 June to recapitalise its ration tax rate, which at 10% the full force of the eurozone first Israeli prime minister the International Crisis cured a €2.5bn loan from
second biggest bank, Cyprus is the lowest in the EU. storm, it will add a unique to visit Cyprus, a 20- Group, a think-tank, is Russia at below-market
Popular, to the tune of Last year, Ireland was put perspective – as long as it can minute flight from Tel also sceptical about the rates (see left), and might in
€1.8bn. But it has not yet under pressure by the lead- deal with problems in its own Aviv. At the same time, durability of the new future prefer Russian aid to
submitted an application for ers of some other EU states, backyard first. Israel and Cyprus signed alliance. “Cyprus can’t a eurozone bail-out.
Cyprus’s chance to win over the doubters
The small size and major political cerns of doubters, among cal momentum for deals is a For the presidency of a and Democrats.
them Graham Watson, a task that requires touring small country to notch up in- For Cyprus to achieve its
problems of Cyprus are creating low British Liberal MEP. Speak- national capitals, not just dividual successes, says a broader goal – to ensure that
ing on Monday (18 June) visiting Brussels. That is a diplomat from a previous solidarity is a major element
expectations, writes Andrew Gardner about the possibility of a deal challenge amplified by the presidency, it must get into in the long-term budget –
on the long-term budget, he small size of Cyprus’s gov- the triangle between the will require a shift in politi-
In the hope of achieving skill and care needed to han- wondered “how you’re going ernment: it has just 11 min- European Parliament, the cal debate. There is now less
what at best is likely to be a dle gritty issues, and to achieve that under a pres- isters. Council of Ministers, and talk of austerity and more of
modest presidency, Cyprus whether it will do as much as idency led by Cyprus with an Still, the ministers will be Herman Van Rompuy, the growth, but the debate has
has mobilised itself, de- a small presidency can to end-of-term, enfeebled gov- relatively comfortable with president of the European yet to embrace the argument
camping a sizeable part of its fashion deals. ernment living on a lifeline their portfolios and on the in- Council. And Van Rompuy is of the Friends of the Cohe-
administration to Brussels. There are reasons for anx- from Moscow, unable to deal ternational stage. A large seen as essential: a small sion Policy – that solidarity
It is doing several of the iety. The Cypriot banking with the problems they have number have technocratic presidency “can’t live without can be seen as a stimulus for
things that a presidency vet- sector is in crisis. Moving a on the island”. His conclu- and international back- him”. But the Belgian Chris- the European economy.
eran suggests are essential: large part of the government sion: “It seems to us [Liber- grounds (in diplomacy and tian Democrat is not a natu- Winning more attention for
to focus on a few priorities, administration to Brussels is als] unlikely to be able to run finance, for example). Be- ral soulmate for Demetris that position would be an
while making sure that a gamble. And Cyprus has a decisive presidency of the cause the Greek Cypriots had Christofias, the Cypriot pres- achievement.
bread-and-butter issues presidential elections next European Union.” no university until 1989, they ident, who is a Communist. For Cyprus itself, the
move forward. year. This is not the best time tend to have studied abroad, It may also prove a handi- greatest success might sim-
On the eve of Cyprus’s – politically or administra- A need for commitment in countries ranging from cap that the ruling party – ply be to change the narra-
presidency, the questions tively – to have a twin focus, If they are to dispel such Bulgaria to the UK. The for- the Communists – is not tive about Cyprus, to ensure
that linger are whether it will on both domestic and EU af- scepticism, Cyprus’s politi- eign minister, Erato Kozak- a member of the largest that the next time that it
have the capacity to deal fairs. cians will need to show com- ou-Marcoullis, even knows left-wing group in the holds the presidency, expec-
with the unexpected, the Those are among the con- mitment. To generate politi- some Finnish. Parliament, the Socialists tations are not so low.