“Assuming the rotating presidency of the Council of the EU is indeed a great challenge for Cyprus, but also a great opportunity for any member state undertaking this obligation,” said Erato Kozakou-Marcoullis in this interview with IPI’s Walter Kemp, conducted via email.In answering questions about the stalled negotiation process with Turkey over settlements and the influx of Turkish settlers, Ms. Kozakou-Marcoullis said, “Restarting the process requires that Turkey and the leader of the Turkish-Cypriot community, Mr. [Derviş] Eroğlu, return immediately to the negotiating table… without preconditions and ultimatums.” Addressing the settlements directly, she said, “Turkey’s colonization policy must be stopped, and its tragic results reversed.” “We are anxious to find a solution of the Cyprus problem that would put an end to the occupation and the anachronistic division of the island and its people,” she said.Ms. Kozakou-Marcoullis also answered questions about the Eurozone and the significance of the discovery of a major gas field, and what that means for Cyprus’s relations with its neighbors and the north.The interviewer Walter Kemp is IPI’s Director of Europe and Central Asia and is based at IPI’s Vienna office.Walter Kemp: You must be very busy these days since Cyprus has the presidency of the European Union. Can you tell us about some of the challenges of this task, especially for such a small country?Erato Kozakou-Marcoullis: Assuming the rotating presidency of the Council of the EU is indeed a great challenge for Cyprus but also a great opportunity for any member state undertaking this obligation. I have to say that the Cypriot society as a whole has warmly endorsed this demanding task, with a sense of responsibility and pride for having the opportunity to contribute towards closer European integration. Preparing for our presidency required hard work and determination. It took the mobilization of the entire civil service and the Cypriot society and a thorough preparation and cooperation with all the EU institutions. A large number of expert civil servants, technicians and organizational officers were needed to join their efforts in reaching our goal of a successful and credible presidency. Of course as a new member state we sought the assistance and help of our counterparts, the expertise of the Council, the know-how of the European Commission and the fruitful cooperation with the European Parliament. After all, as a small member state with no strong national interests at stake, we are firm supporters of the community method, which we believe is the way forward for identifying solutions to common problems. The Cyprus presidency is taking place during difficult times for the EU, as European citizens suffer the consequences of the ongoing economic crisis. That is why our aim is to work towards a better Europe, a Union more relevant to its citizens and the world, with emphasis on social cohesion and the principle of solidarity, a Union with a better performing and growth-based economy. Our challenge is, together with our counterparts, the Commission and the European Parliament, to reach such decisions that would contribute to overcoming the consequences of the crisis and to give the Union a better perspective.At the same time we need to safeguard our common European values and our common goals and policies. We must not allow this difficult economic situation to hinder our efforts for deeper and wider European integration. I strongly believe that we must continue to work towards the enlargement of the EU, as this is a process which contributes to the promotion of peace, stability and security in our continent, and beyond. Enlargement could also create conditions for economic development and prosperity for our societies. We must also maintain and strengthen our good relations with our neighbors, and, of course, sustain our policy of development aid towards developing countries. These are examples of the challenges that the Cyprus presidency and the EU face today as a result of the economic crisis. Bearing all this in mind, during the first months of our presidency we have worked hard to tackle a heavy agenda, and we believe we set solid foundations to allow for further progress in the coming last two months of the presidency and meeting our goals of progressing on important EU policy dossiers, in the areas of enlargement, as I already mentioned, the Multiannual Financial Framework, the Common European Asylum System, Economic Governance and the Single Market among others. I believe, also from the positive and encouraging comments that I receive from our EU partners and others, that Cyprus will be remembered as a credible and honest broker, as the small member state which, during its presidency, worked hard to build consensus and negotiated compromises among the EU member states and institutions, with the aim of reaching agreement for the benefit of the EU and the European citizens. WK: What is your view on the financial crisis in the Eurozone? How is it affecting your presidency and the economy of Cyprus?EKM: Cyprus assumed the rotating presidency of the Council of the EU at a very critical stage for the future of Europe mainly due to the most severe economic crisis, which the EU and the member states collectively have to efficiently address. Therefore, Cyprus as the rotating presidency of the Council for the period July-December 2012, had to deal with the efforts of the Council to tackle the problem. I would like also to remind you that at the European Council of June, the presidency was given a mandate to mainly focus on the issue of tackling the financial crisis, the correction of the budgetary imbalances, the promotion of growth policies and the creation of new job opportunities. Through this crisis it has also emerged that what is mainly needed is ‘more Europe’ and this process has already begun with the completion of the first step of the Banking Union, which is the establishment of the Single Supervisory Mechanism (SSM). At this stage, the aim of the Cyprus presidency is to have the SSM effective by the 1st of January 2013. Cyprus is a country that has also been a victim of the domino effect of the financial crisis. Our economy was affected to a large extent by the haircut on the Greek debt. The high exposure of the Cypriot financial sector to developments in Greece have resulted in substantial losses for the Cypriot banks. For this reason the Cyprus Government has requested financial assistance from the European Stability Mechanism (ESM) and now is in the final stage of negotiations with the Troika, in order to reach an agreement on the programme. At this point, it should also be stressed that as presidency we strongly believe that the measures that are currently discussed for addressing mainly the financial crisis are on the right track. Those measures will not only facilitate addressing the challenges of the Eurozone countries that currently have to deal with severe financial problems, such as Greece, Italy, Spain and Cyprus, but will also restore confidence in Europe and our common currency. The goal of having into place the SSM on time and the next step of allowing the direct recapitalization of the Eurozone banks from the ESM, would definitely facilitate the breaking of this “vicious circle between banks and sovereign debt.” WK: The settlement process in Cyprus is stalled. What would it take to restart it? What do you see as a viable solution?EKM: The current state-of-play in the negotiations process that began in September 2008, following [Cyprus] President Christofias’ initiative, is absolutely disappointing and disheartening. As the UN Secretary-General’s Special Representative for Cyprus, Alexander Downer, commented in an August interview to a Turkish news outlet, the Turkish-Cypriot side does not appear willing to engage right now in this process. This is essentially the only reason that the process is stalled.Restarting the process requires that Turkey and the leader of the Turkish-Cypriot community, Mr. [Derviş] Eroğlu, return immediately to the negotiating table, in the context of the aforementioned process, without preconditions and ultimatums. Mr. Eroğlu unilaterally abandoned the talks this spring, when the Secretary-General of the UN made it clear that he would not convene an international conference on the Cyprus Question, as he had concluded, quite objectively, that the progress recorded in the direct talks between President Christofias and Mr. Eroğlu on the core issues (governance and power-sharing, settlers, property rights in conjunction with territorial adjustments) was negligible. It must be underlined that in his assessment of the situation, Mr. Ban Ki-moon took also into account the UN Security Council’s position, as per its Resolution 2026 (2011) that an international conference may be convened only once tangible progress on the core issues is achieved.It is most regrettable, in fact, that Mr. Eroğlu, with Turkey’s guidance and active support, has in essence refused to engage in the substance of the negotiations on the core issues, since taking over from Mr. Talat in April 2010. The convergences that were achieved in the negotiations between 2008 and 2010, while Mr. Talat was leader of the Turkish Cypriot community, were rejected by Mr. Eroğlu, who categorically refused to be bound by them, his written assurances to Mr. Ban Ki-moon to the contrary notwithstanding.Of course, the root of the problem lies in the fact that Mr. Eroğlu does not accept the agreed basis of the negotiations process, namely that the objective is to reach a solution of a bizonal, bicommunal federation, with a single sovereignty and international personality and a single citizenship, with its independence and territorial integrity safeguarded, and comprising two politically equal communities as described in the relevant Security Council resolutions. This basis is fully consistent with Security Council Resolutions on Cyprus. Mr. Eroğlu, however, continues to lobby for a solution which seeks to formally legitimize the illegal results of Turkey’s invasion of Cyprus in 1974 and subsequent occupation of 36.2 % of the territory of the island. This is consistent with his long-standing view that there are “two states” and “two peoples” on the island, a position that he continues to peddle and one which clearly undermines and contradicts the basis and the objective of the negotiations process.A just and viable solution of a bizonal, bicommunal federation as described above is in line with international law and the charter of the UN. Given Cyprus’s membership in the EU, any solution must also conform to the acquis communautaire and be consistent with the values upon which the European Union is founded. WK: It seems that the longer there is no settlement, the more facts are created on the ground that make it more likely that the island will remain divided. I am thinking in particular about the influx of Turkish settlers. Do you feel that time and demography are against you?EKM: The perpetuation of the illegal de facto situation stemming from Turkey’s 1974 invasion and subsequent occupation of part of the island and the creation of what is called “facts on the ground” is not accidental. Quite the contrary, it is part and parcel of Turkey’s cynical policy vis-à-vis the Republic of Cyprus, continuously aiming for the past 38 years to, inter alia, illegally alter the local demographics, as well as the island’s cultural and historical identity, while also ethnically cleansing the occupied areas by the forced expulsion of the Greek Cypriot and Maronite enclaved citizens of the Republic.It should never be forgotten that the importation by Turkey of settlers in the areas it illegally occupies in Cyprus is in clear violation of Article 49 of the Geneva Convention (IV) of 1949, which stipulates that “…the occupying power shall not deport or transfer parts of its own civilian population into the territory it occupies…” The fact that the occupied part of Cyprus has been subjected to systematic settlement from Turkey has been reported on twice by the Council of Europe’s Committee on Migration, Refugees and Demography, first in 1992 (rapporteur: Alfons Cuco, Spain) and again in 2003 (rapporteur: Jaakko Laakso, Finland). Cuco’s report concluded that the demographic composition of Cyprus is being radically altered as a result of the settlement of thousands of foreigners brought in from Turkey. It must also be stressed that Turkey’s colonization of the areas it illegally occupies, with Turkish settlers, has also and continues to be forcefully criticized by the majority of the Turkish Cypriots themselves, who are now most definitely outnumbered by these settlers. The Turkish Cypriot population at the time of the invasion in 1974 was estimated to be (on the basis of the 1973 consensus) at 116,000. Today, it is estimated that, even when considering figures of the illegal entity of the “TRNC” [Turkish Republic of Northern Cyprus], it does not exceed 90,000 living in the occupied areas of Cyprus. Crucially, the corresponding figure for illegal Turkish settlers is at least 300,000. This does not include the 43,000 Turkish troops in the occupied areas.Alfons Cuco had concluded—and the Parliamentary Assembly of the Council of Europe (PACE) adopted his findings—that Turkey’s colonization policies constituted an additional obstacle in the efforts to reach a just and viable negotiated settlement of the Cyprus problem. This is even more relevant today than it was in 1992 or 2003. The answer therefore is clear: Turkey’s colonization policy must be stopped, and its tragic results reversed. PACE recommended this exact step twenty years ago. It is high time that the rest of the international community followed suit and exercised its influence on Ankara so that the Turkish Government receives the message, loud and clear, that it cannot continue to flout international law and the will of the international community.We are anxious to find a solution of the Cyprus problem that would put an end to the occupation and the anachronistic division of the island and its people. We are cognizant that with the passage of time, Turkey has created and continues to create new fait accomplis that would ultimately make the solution even more difficult. This has been the longstanding policy of Turkey. This is why it is of utmost urgency to find a solution. This is why all our partners and friends should exert their influence on Turkey to end its occupation and allow the reunification of the country. Time is indeed of essence.WK: Some have described the discovery of a major gas field off the coast of Cyprus as a game changer. Can you give us some background on the significant find, and what it could mean for the situation in Cyprus, and Cyprus’s relations with its neighbours? Would the revenue be shared with the north?EKM: Cyprus has already embarked on drilling activities for hydro-carbon exploration in the southern part of its Exclusive Economic Zone (EEZ). In September 2011, Noble Energy International Ltd. began exploratory drilling in block 12 offshore Cyprus and a few months later a natural gas discovery was announced, which is initially estimated to a gross resource range of 5-8 trillion cubic feet (tcf), with a gross mean of 7 tcf. In addition, in February 2012, a second licensing round was announced, with twelve blocks available, where very pronounced interest was expressed by oil companies. In total, thirty-three (33) applications were submitted by the 11th of May 2012, by fifteen (15) interested bidders. On 29 October the government announced its decision to begin negotiations with two major European companies, which bid in cooperation with other major companies of third countries, for the licensing of four blocks of its EEZ.We expect that the discovery of hydrocarbon deposits will contribute substantially to Cyprus’ energy independence, which is a prerequisite for its economic and social growth. Moreover, it will integrate our country in the major international oil and natural gas networks, providing a safe new energy source for the EU and create the conditions for Cyprus to turn into a regional energy hub. The discovery of hydrocarbon deposits is certainly a major development for all countries in the eastern Mediterranean. The US Geological Survey has estimated a mean of 1.7 billion barrels of recoverable oil and a mean of 122 trillion cubic feet of recoverable gas in the Levant Basin Province, as well as 1.8 billion barrels of recoverable oil, 223 trillion cubic feet of recoverable gas and 6 billion barrels of natural gas liquids in the Nile Delta Basin Province in the eastern Mediterranean. The commercial development of the resources will undoubtedly strengthen regional energy security and attract foreign investment which will lead to job creation; this could serve as a boost to the economies of the countries in the region. The southeastern Mediterranean can evolve into an area of prosperity, stability and peace. Cyprus is one of the few countries in the Mediterranean Sea that has already signed agreements on the delimitation of its Exclusive Economic Zone with three of its neighboring countries, the Arab Republic of Egypt in 2003, the Republic of Lebanon in 2007 and the State of Israel in 2010. Those agreements were based on the median-line principle and in accordance with the provisions of the United Nations Convention of the Law of the Sea. Building upon traditionally excellent bilateral relations with our neighboring countries, we aim to promote a closer and more systematic cooperation for the benefit of economic development, political stability and peace and security in the region. The Turkish Cypriots, as citizens of the Republic of Cyprus, can enjoy, within the framework of a reunited homeland, the benefits of any natural wealth that Cyprus has. As it has been agreed during the current negotiating process, the management and exploitation of natural resources, as well as for the allocation of the relevant revenues will be under the responsibility and competence of the federal government to emerge in the framework of an overall solution of the Cyprus problem. Under the present circumstances of the Turkish military occupation and the illegal attempted secession of the occupied areas, it would be unthinkable to entertain any discussion about revenue share outside the context of the solution of the Cyprus problem.