Address by the President of the Republic of Cyprus, Mr Nicos
Anastasiades,
at the German Council of Foreign Relations
The Silver Lining for Cyprus: Geopolitics, Hydrocarbons and the Economy
Ladies and
Gentlemen,
I am truly
honoured to be here with you today at the German Council on Foreign Relations.
Let me first of all extend my gratitude for the warm and gracious hospitality
offered to my delegation, my wife and myself by the Government of the Federal
Republic of Germany.
Allow me to also
express my sincere appreciation to the German Council of Foreign Relations for
hosting this event and I warmly thank Mr. von Maltzahn for his welcoming remarks.
This visit constitutes
a landmark in Cyprus-German relations.
During my
meeting with Chancellor Merkel yesterday, we reaffirmed our shared commitment
to further deepening Cyprus-German relations and exploring concrete new fields
of cooperation. This constitutes a natural evolution of our deeply-rooted
relationship, and I am genuinely committed to seeing this through.
Ladies and
Gentlemen,
There are some
basic elements that come to mind when one thinks about Cyprus: an island state
in the Eastern Mediterranean at the crossroads between Europe, Asia and Africa;
a Member State of the European Union at its south-eastern-most corner; a
country with a rich and diverse history, where the major cultures and religions
of the Mediterranean met and interacted for thousands of years; a country that
sadly is unique, in that it is characterized by a long-standing,
protracted conflict, which makes it the only European Union country that is
still divided.
The
acknowledgment of this kaleidoscope of characteristics makes one acutely aware
of the dynamics generated by, and linked to the geostrategic location of
Cyprus. It should hence be of no surprise that one of the main goals of my
Government has been the realignment of Cyprus’ priorities and the reorientation
of Cyprus’ foreign policy based on a comprehensive and outward-looking approach
premised on enhancing bilateral and regional cooperation with the end goal of
contributing to the restoration of stability, peace and prosperity in the turbulent region of the Eastern
Mediterranean.
My primary aim
in external relations has been to provide Cyprus with a clear foreign policy
identity. In this respect, the focus of my Government has been to positively
contribute to Europe’s common foreign and security policy by exploiting all the
prospects provided by Cyprus’ geographic position.
To this end, we
have actively embarked on a proactive foreign policy, which includes the
promotion of dynamic and multi-faceted bilateral cooperation with our immediate
neighbours, in the economic, trade, investment, energy and political fields. In
parallel, we are exploring the possibility of cultivating regional cooperation
for the attainment of the vision of a stable, peaceful and prosperous Eastern
Mediterranean. As the voice of the Eastern Mediterranean within the European
Union, we also strive to act as a bridge between the two, communicating the
priorities and sensitivities of our immediate neighbourhood to our European
partners, as well as the European policies and principles to the countries of
the Eastern Mediterranean.
A significant
element in this equation, which has changed the geopolitical context of the
region, is the discovery of hydrocarbon reserves in the Levantine Basin.
This has opened up new avenues of cooperation for the countries of the
region. The possibility for a number of states to cooperate for the joint
utilisation and exploitation of these resources to the benefit of future
generations, has the potential to alleviate some of the stark security dilemmas
faced by almost every country in the region. It has the potential to
restore the confidence that has been absent for decades in the regional and
bilateral context and be a force for stability, prosperity and peace.
Ladies and
Gentlemen,
My Government’s
domestic energy policy decisions are taken in the context of their wider impact
on the energy security, not only of Cyprus itself, but also of that of its
neighbours, especially as decisions made today will have a decisive effect on
the region’s future.
In the
formulation of our energy policy we seek to explore synergies, optimize
resource development, create opportunities and address any challenges, for
potential investors, through interstate bilateral and regional cooperation.
At the bilateral
level, Cyprus is pursuing the conclusion of Agreements with all the coastal
States with which it shares sea boundaries. The Exclusive Economic Zone
Delimitation Agreements that Cyprus has concluded with Egypt, Israel and
Lebanon have established not only the sea boundaries between Cyprus and three
neighbours, but also the boundaries between the European Union and the Middle
East. These Agreements also provide legal security to international oil and gas
companies to freely pursue exploration and exploitation of hydrocarbons in the
region.
On the regional
level, Cyprus aspires to bringing interested stakeholders closer together
through seeking opportunities for maritime boundary agreements and the joint
development of potentially common and adjacent fields of hydrocarbon deposits,
but also for shared cooperation on other issues of mutual interest, such as
economy and trade.
In addition, we
have taken the initiative to construct an onshore Liquefied Natural Gas
terminal, in order to realise the significant potential of becoming the Eastern
Mediterranean’s energy hub.
The
transportation and liquefaction of gas produced by neighbouring countries in
Cyprus’ LNG terminal would allow for it to be securely exported to the EU and
Asian markets. This would also help overcome commercial challenges for upstream
field developments, and attract international oil and gas companies to the
region.
Most certainly,
the presence of hydrocarbon reserves in the Eastern Mediterranean is to our
European partner’s benefit as it has the capacity to guarantee Europe’s energy
independence and security, by providing it with an alternative energy corridor,
a diversified energy portfolio thereby leading to increased energy
security. This need is especially highlighted by the recent developments
in Ukraine. I am certain that central Europe fully comprehends the
urgency of the matter at hand.
Thus, in this
undertaking we look forward to cooperating closely with our European partners
and by linking them to those in our immediate neighbourhood, and possibly beyond,
we aim to advance towards greater energy security, and by extension, broader
economic security and stability.
In this respect,
let me reiterate that my Government is determined to swiftly proceed and
implement all the necessary steps in order to realise the significant potential
for Cyprus becoming the Eastern Mediterranean’s energy hub to the best interest
of our EU and other partners.
Dear Friends,
Cyprus’
geopolitical role matters. Our aim is to reinforce this role with
collaborations such as the ones with interested stakeholders from Germany and
in particular the numerous German enterprises which possess valuable expertise
in the area of hydrocarbons. Such entrepreneurs and technocrats are most
welcome to further their entrepreneurial ventures in Cyprus.
The enormity of
investment required to exploit this offshore treasure requires a great deal of
wisdom, vision and patience because of the volatile nature of the region. We
are aware of the responsibility bestowed upon us as decisions made today will
have a major effect on the region’s future.
In the region of
the near east, Cyprus, has assumed the role of a trustworthy friend in the
quest of realising the vision of the utilisation of energy reserves becoming a
catalyst for peace and stability. This might sound like an
over-optimistic scenario but I take inspiration from an example of some six
decades ago when a small organisation of six states was established: the
European Coal and Steel Community, which in over half a century has been transformed
into a twenty-eight state partnership. It was deservedly awarded the Nobel
Peace Prize for being the driving force of such interdependence that former
foes have become allies and friends.
This is an
important example to all states of our region and I am convinced that a sound
energy policy in the Eastern Mediterranean will indeed ensure that what has
been viewed as a conflict zone becomes what it once was – the central
superhighway of transport, trade and cultural exchange between diverse peoples
encompassing three continents, living in mutual respect, peace and prosperity.
With equal
fervour we wish to give true credence to the value of Cyprus as a safe haven at
the crossroads of three continents. This has been evidenced in practise in cases
of mass humanitarian evacuations, as well as the establishment of a support
base for the Joint OPCW and United Nations Mission on the territory of the
Republic of Cyprus in accordance with United Nations Security Council 2118
(2013) to eliminate the chemical weapons programme of the Syrian
Arab Republic.
Moreover, Ι would also like
to highlight the importance that we attribute to the presence of the German
contingent, responsible for the Maritime Task Force
of UNIFIL, which has its base in Limassol port. As you are aware, Cyprus hosts
the German Maritime Component of UNIFIL, on the basis of a bilateral SOFA that
was signed between our two countries in 2006.
This bilateral
political-military cooperation, which was established in the aftermath of the
August 2006 Lebanon crisis has flourished and developed. Germany is benefiting
from the use of various installations and infrastructures of the Republic of
Cyprus, notably at the Paphos Military Air Base and other military sites in
Limassol.
It is with great
pleasure that I would like to announce here today that our two countries will,
in the coming days, sign an agreement for providing assistance and facilities
to the Federal Government of Germany in case of evacuation operations for the
repatriation of German citizens from the wider Middle East area, via Cyprus, in
case of a crisis. This constitutes a very concrete deliverable. This once
again signifies the role of Cyprus as a security provider and humanitarian hub
in the wider Middle East Area. A role that can be shared to the benefit of our
European and Transatlantic partners.
Dear Friends,
A pivotal aspect
in terms of geopolitics of the Eastern Mediterranean is, of course, the
solution of the Cyprus problem. The reunification of Cyprus will undoubtedly
have a decisive and positive influence in the turbulent region of the Eastern
Mediterranean, by improving the relationship not only of Turkey with Cyprus but
also of Turkey with the EU. The Eastern Mediterranean, as I am sure my German
audience wholeheartedly agrees, is very much in need of security and prosperity
paradigms. In fact, this year Germany, but also the European Union, will
be celebrating the twenty-fifth anniversary of the fall of the Berlin
Wall. That event symbolised the start of an unprecedented and sweeping
change in the European geopolitical landscape. Those first cracks in that
shameful wall had a domino effect that positively shook Europe and the
world. The date 9 November 1989 will forever be etched in our minds as the
day history changed.
Ladies and
Gentlemen,
I hope a similar
day will soon arrive when history changes for the better once again. I
remain convinced that the ramifications from reuniting Cyprus will be felt on
several levels. In a region where stability has proven to be an expensive
commodity, a viable and durable solution to the Cyprus problem which will
reunite the island, its people, its economy and its resources will resonate not
only within the country and the immediate region but even further afield. And
I think Germany understands this more than any other country in Europe.
In this context,
I would like to mention an initiative I took a few months ago, to lend an
impetus to the negotiations for a settlement of the Cyprus problem: Namely the
submission of game-changing confidence building measures. The proposal
envisages the return of the closed-off ghost city of Famagusta to its lawful
inhabitants. Furthermore, it provides for opening the port of Famagusta,
located in the Turkish-occupied area, for trade under EU auspices. In
conjunction with this, a number of Turkey’s EU accession negotiating chapters
would open, provided also that Turkey fully implements the Ankara Protocol vis-à-vis
Cyprus.
It is my sincere
hope that there will be a positive response, since everyone stands to benefit
from the implementation of this proposal. Greek Cypriots and Turkish
Cypriots are in need of a confidence boost. The Famagusta-proposal would be a
great game-changer, that initial push that will get things on the right track. It will contribute to creating a climate of
mutual trust between Greek Cypriots and Turkish Cypriots; it will give an added
impetus to the negotiations by restoring the hope, trust and confidence of the
people of Cyprus in the prospect of reaching a settlement on the Cyprus problem
and, particularly, as regards Turkey’s intentions.
The reconstruction
and rehabilitation of the fenced city of Famagusta that has been uninhabited
for four decades, will undoubtedly lead to the creation of new jobs within a
wide-variety of occupational fields, giving a huge boost to the economy of the
country. Working to rebuilding the city and thereafter enjoying what it
has to offer, Greek Cypriots and Turkish Cypriots will come closer together, realising the benefits and the advantages that
can be derived from a shared and prosperous future, just as their forefathers
had done in the past.
This proposal
has been heralded by the European Union, by individual member states as well as
the White House. Unfortunately, as of yet, we are still awaiting a
positive response from the Turkish side, which seems to be dragging its feet on
the matter.
However, the
confidence-building measures are exactly that key element that can give a boost
to the negotiations process. The ultimate goal, however, remains the
solution to the Cyprus problem, which should meet the aspirations of all
Cypriots to coexist peacefully in a European country, enjoying full respect of
their fundamental human rights and freedoms. A solution, as I have already
argued, would also have a decisively positive impact on the economy of the
whole of Cyprus.
Dear Friends,
Cypriots have
proven their ability to overcome even the most devastating of challenges.
Following the 1974 Turkish invasion of Cyprus, when over one-third of the
territory of the Republic of Cyprus came under Turkish occupation, Cypriots
emerged economically stronger. When saying this, one should also take
into account that the area that Turkey occupied had accounted for more than half
of the island’s economy. Despite the adverse circumstances of a
devastating war and displacement – where over a third of the population had
become refugees overnight – by the late 1970s, Cyprus’ economy was booming.
Looking back at
our recent history gives us, Cypriots, hope. Despite the dire
circumstances created by the global financial crisis and the Eurogroup’s
decisions of last March – which involved a bail-in of uninsured depositors in
the island’s two systemic banks – the Government’s corrective measures have
proven effective and the hard work and perseverance that ordinary Cypriots are
showing is paying off. Without wanting to paint a rosy picture and whilst
acknowledging the hardship that many are facing in Cyprus, especially given the
high unemployment figures, the 2013 economic recession was less severe than
initially thought. In fact, our fiscal targets for 2013 were met by a
considerable margin, while the financial sector is also showing signs of
stabilisation due to the determined implementation of the agreed Economic
Adjustment Programme.
We have improved
supervision and oversight of our financial sector. We have restructured and
recapitalised our banks. As a result, capital controls imposed following last
year’s Eurogroup decision on Cyprus, are gradually being lifted, leading soon
to their full abolition. The decline in the spreads of the Cyprus Government
bonds is remarkable; the spreads are now at their lowest level since 2011.
The Troika
(composed of the European Commission, the European Central Bank and the IMF)
has already issued three very positive reviews on the Cyprus Government’s
implementation of its economic reforms. The Cyprus economy received a series of
upgrades by Standard & Poor’s and Fitch, following three years of successive
downgrades, whereas the forecast for a quick recovery and return to growth, as
early as 2015, is supported by the Troika’s own forecast.
The recession is
expected to ease in 2014 and, much needed, growth is set to return in 2015 as
domestic demand recovers.
Measures have
been taken to support Small- and Medium-sized Enterprises (SMEs), for example
through an Entrepreneurship Fund, co-financed by the European Investment Bank,
although there is still need for more funds. In this respect, we would very
much appreciate Germany’s support and cooperation, especially since SMEs are
the backbone of the Cypriot economy.
Underscoring the
Government’s aim to achieve gradual recovery of the Cyprus economy by 2015, our
diversified, open-market economy and our highly-educated workforce are valuable
assets, as Cyprus retains its unique clusters of expertise and service
capability to supporting key growth sectors. These include areas such as
shipping and on my second-leg of my visit to Hamburg, I shall be addressing
German ship-owners who are interested in Cyprus. The Cyprus Registry ranks tenth among international
fleets and third within the European Union. Further sectors, which show promise for the
Cyprus economy, are differentiated tourism investments and energy, including,
as I have already mentioned, the development of significant natural gas
deposits in Cyprus’ exclusive economic zone.
Cypriot society
is once again going through a paradigm shift, calling for readjustment and
evolution. But the silver
lining in what has otherwise been a difficult year is that my country is rising to the challenge and
judiciously following through with the Economic Adjustment Programme, of which
I am very proud. At the same time, the prospects arising from the newly
discovered hydrocarbons in our EEZ, are a factor contributing to a sound basis
for optimism. Reforming our economy provides us with an opportunity to
seek development through sustainable means, and a better tomorrow.
Dear Friends,
In closing, let
me once again thank the organisers for this opportunity to address you today
and present Cyprus’ silver linings.
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