Amidst the ongoing peace negotiations to finally find an equitable and a fair solution to the age-old Cyprus problem, Turkish Cyprus has been facing a governmental crisis in recent months. The National Unity Party (UBP), the smaller partner in the coalition government, withdrew from the coalition led by the Republican Turkish Party (CTP) on April 2. The main reasons behind the collapse of the government were related to economic problems the country is facing, most of which are due to the financial tight spot created as a result of the delay in signing the financial protocol with Turkey. Without the protocol, Turkish Cyprus simply does not have the financial means to compensate for its spending. Alongside other disagreements, divergences over the management of the water provided by Turkey through the Turkish Cyprus Water Supply Project pipeline, which was completed by October 2015 but not yet utilized, was one of the reasons behind the delay.
After the collapse of the government and the resignation of the Prime Minister Ömer Kalyoncu, the UBP quickly agreed with the Democratic Party-National Forces, led by Serdar Denktaş, son of the late Rauf Denktaş, to form a new government. Although President Mustafa Akıncı approved the new government led by UBP MP Hüseyin Özgürgün, it only has 23 seats in the 50-seat parliament and will depend on the support of independents.
If the government survives next week’s confidence vote in parliament, it will still face the same problems which caused the collapse of the previous one. Thus, it is reasonable to expect that the new government would be more eager to finalize the financial protocol with Turkey, which will then allow the release of funds, allowing the government to overcome its inability to pay the salaries of public servants, which in turn inject a substantial amount of money into the economy.
As a result of international isolation, a weak private sector and an overgrown public sector, leading to structural problems, the Turkish Cypriot economy is heavily dependent on funds from Turkey for economic survival. Besides, creating an intricate political and economic liaison between Turkey and Turkish Cyprus, this dependency allows Turkey to pressure the latter for structural reforms in the public sector and widespread privatization before providing financial support, though Turkish Cypriot governments so far have resisted such pressures, causing delays in delivery of funds.
In addition to their obvious economic rationale, Turkey’s demands can also be construed as political leverage.
While parts of Turkish Cypriot society have preferred breaking this link for some time, others favor the status quo. In fact, it has become the backbone of the current political divide in the country as well as the recent government crisis. The hesitancy of the CTP and debates within the coalition on whether to sign the financial protocol led to the suspension of Turkish aid and the collapse of the government.
In the meantime, the renewed negotiation process between the two sides of the island since the election of Akıncı in April 2015 has created a positive atmosphere towards a solution. Nevertheless, there are several aspects of the negotiations that tie it to the domestic political developments on both sides. While a final solution would no doubt create a totally different set of relationships with Turkey, it would also depend heavily on the willingness of interested parties, including Turkey, to sponsor the possible peace deal, which would in some estimates requires between 5 to 25 billion euros. Where and whether this money would come and how it finally will shape the future political realignments both within the Turkish Cypriot community and between Turkish Cypriots and Greek Cypriots are not clear at the moment.
Bu yazı 21.04.2016 tarihinde Hurriyet Daily News Gazetesi'nde yayımlanmıştır.