Posted by 
Jack Straw was foreign secretary of the United Kingdom from 2001 to 2006.
It was recently reported that two houses in an exclusive enclave near Moscow had been purchased for Russian President Vladimir Putin’s daughters by a Cypriot company named Ermira, which was officially owned by a Russian lawyer, but in reality it belonged to Putin.
The close association between Russia and the Greek-Cypriot Republic of Cyprus is long standing, all pervasive and, many believe, rather unhealthy. But what is the solution to this problem?
The republic has a population of about 800,000 — or just 0.002 percent of the European Union’s total population. Yet, well into the last decade, tiny Cyprus was the third largest foreign direct investor in Russia. The money was mostly Russian capital, which had been hidden offshore in Cyprus to avoid tax and scrutiny, and was then reinvested back in Russia.
From 2012 to 2013, an extremely serious banking crisis in Cyprus had come close to destabilizing the whole Euro area. Cypriot banks were over-leveraged, and an emergency loan of €2.5 billion from — yes — Russia failed to stabilize the situation. The EU itself had to intervene.
Then, just last year, an extraordinary scandal engulfed the country’s political classes, when diligent investigative journalists uncovered an extensive conspiracy to secure Cypriot (and therefore EU) passports for foreign citizens through the Cyprus Investment Program. Under the scheme, eligible foreign nationals could purchase citizenship for €2.15 million. Among those charged was a former president of the Cyprus Parliament.
These applicants had criminal records and were therefore ineligible under the program. But during the period it operated, from 2007 to 2020, nearly 6,800 wealthy foreigners bought EU citizenship from Cyprus — and yes, the vast majority were Russian.
The island of Cyprus has been divided since 1974, with the Greek Cypriot Republic in the south and the Turkish Republic of Northern Cyprus (TRNC), where the Turkish Cypriot minority (of around 250,000) overwhelmingly now live. A United Nations peacekeeping force, patrolling the effective border between north and south, is permanently stationed there. The Greek Cypriot Republic is internationally recognized. Only Turkey recognizes the TRNC in the north.
The narratives about why Turkey invaded to secure the north differ greatly. But, at the time, neofascist colonels were running Greece and pursuing a policy of “enosis” — unity of Cyprus with the mainland. The bicommunal, bicameral constitution that was agreed in 1960 on independence from the United Kingdom had broken down; there was terrible communal violence; and many Turkish Cypriots were in fear of their lives.
Cyprus had also signed an association agreement with the EU in late 1972, formally applying for membership in 1990. The U.N. had been trying, unsuccessfully, for years to broker a peace deal and a new constitution between the Turkish and Greek Cypriot communities. And as the prospect of EU membership became clearer, U.N. negotiators, with international support, calculated that linking agreement on a peace settlement to EU membership offered the best hope for solving the island’s divisions.
Thus, in early 2004, as the clock was ticking toward Cyprus’ formal accession, scheduled for May, detailed proposals were put to each side by the U.N. Turkish Cypriots voted overwhelmingly in favor; Greek Cypriots voted against by an even greater margin.
Many of us who had witnessed this process believed there had been serious duplicity on the part of Greek Cypriot negotiators. In retrospect, we could, and should, have put Cyprus’ accession on ice at this stage, and made it clear to both sides that only a united island would be allowed to join the EU.
The bloc’s failure (to which I was a party) means the EU itself has presided over a frozen conflict. And in doing so, it has lost all serious leverage over Greek Cypriots.
They believe, correctly, that they have carte blanche — not least in relation to Russia; and that any peace deal with the north, however accommodating to Greek Cypriot interests, will be less satisfactory than the status quo. The history of U.N. negotiations since 2004 makes my point.
There is, in my view, only one way through this impasse. And that is for the international community to commit itself to a two-state solution if negotiations for a new constitution for a united island fail yet again.
There are plenty of examples where splitting states was the least worst option available. Czechoslovakia peacefully dissolved into two states in 1993. In the Balkans, the dissolution of Yugoslavia was anything but peaceful, yet most of the new republics have a better future ahead of them now than they ever did when they were in a single nation.
The U.K. is one of Cyprus’ three “guarantor nations,” along with Turkey and Greece. It also has key defense assets in the Greek Cypriot Republic, with two “Sovereign Base Areas” (that were formally part of the U.K.). Of course, Britain cannot affect a two-state solution to Cyprus on its own. But what it could, and should, do is break the spell over Cyprus, put the two-state solution on the table and seek to persuade other partners that this is the best way to unfreeze this conflict.
