International Support Is Strong For U.N. Federation Framework
 Grave Concern
 Major Powers Reiterate Position
 Turkish Cypriot Reaction
 Action at the UNGA
 New Ambassador Presents Credentials
 Did You Know?
 U.S. Efforts Continue Apace
 Cyprus & the EU
 Budgets Approved
 International Support Is Strong For U.N. Federation Framework
President Clerides, World Reject Denktash's Confederation Call
From Durban, South Africa, where he was attending a summit of Heads of State of the Non-Aligned Movement, President Glafcos Clerides dismissed an Aug. 31 proposal put forward by Turkish Cypriot leader Rauf Denktash as "unacceptable, right from the start."
The Turkish Cypriot called for the establishment of a "Cyprus Confederation" with "two sovereign and equal states" on the island. The Denktash statement, issued in Turkish-occupied Nicosia in the presence of Turkey's Foreign Minister Ismail Cem, drew immediate rejections from around the world, as did his threat that unless the Greek Cypriot side accepts the proposal, there will be no negotiations for a solution.
In a written statement from Durban, Clerides said "under no circumstances can Mr. Rauf Denktash's proposal form a basis for talks." He added that the proposal "is contrary to, and contemptuous of the very resolutions of the U.N., the high-level agreements Denktash himself has signed and the substance and spirit of international law."
The Denktash action is the latest in a series of diplomatic backtracks, which the Turkish side has taken this year. Last spring it torpedoed a U.N. effort to restart the intercommunal talks, and over the summer it thwarted a U.S. mediation effort, by adding new preconditions for negotiations: That the illegal regime in Turkish-occupied Cyprus be given international recognition and the European Union (EU) withdraw its invitation to Cyprus to join the accession process. All of these demands have been rejected by everyone but Turkey; only Turkey recognizes the illegal entity in the north, the declaration of which the U.N. Security Council has called "legally invalid."
The global chorus of disapproval came as President Clerides pointed out that Denktash is now reversing course on the 1977 and 1979 agreements he himself signed, endorsing a settlement based on the establishment of a bizonal, bicommunal federation in Cyprus. That formula has been repeatedly endorsed in numerous U.N. resolutions.
Turkish troops have been occupying 37 per cent of sovereign Cyprus territory since 1974, in violation of countless U.N. resolutions calling for their withdrawal.
The Non-Aligned leaders, reacted swiftly by issuing strong language on Cyprus in their final communique. It condemned "the declared attempts of the Turkish side for a change of the basis of the intercommunal dialogue," adding that they "consider such demands contrary to the relevant U.N. resolutions, the Non-Aligned Declarations and the principles of international law."
 Grave Concern
Expressing "grave concern about continuous Turkish threats of use of force against Cyprus, they deplored the Turkish side's demand for recognition of the purported state in the occupied territory as a precondition for attending any new round of talks." The Heads of State "reiterated their support for the sovereignty, unity, independence and territorial integrity of the Republic of Cyprus."
They called once again for "the withdrawal of all occupation forces and settlers, the return of the refugees to their homes in conditions of safety, the restoration of and respect for human rights of all Cypriots and the accounting for all missing persons and for the effective implementation of all relevant U.N. resolutions on Cyprus." Moreover, they urged the Security Council "to take resolute action and appropriate measures including the demilitarization of Cyprus, as repeatedly proposed by the President of Cyprus."
U.N. Secretary General Kofi Annan quickly reaffirmed the federation basis for any talks. After meeting with Clerides in Durban, he said the Security Council would not waiver from its stance on a Cyprus settlement based on a bizonal, bicommunal federation. Mr. Annan referred to Security Council Resolution 1179 (1998), which reaffirms that a Cyprus settlement must be based on a state of Cyprus with a single sovereignty, international personality and a single citizenship.
 Major Powers Reiterate Position
The U.S. Department of State reacted by noting, "The United States continues to support the objective of a bizonal, bicommunal federation agreed to in the 1977 and 1979 high-level agreements."
A Chinese Embassy spokesman in Nicosia said that "China, as a permanent member of the U.N. Security Council, has always advocated that the independence, sovereignty, territorial integrity and non-aligned status of Cyprus should be indeed respected," under "the relevant U.N. resolutions."
French Prime Minister Lionel Jospin said that the division of Cyprus is "intolerable in terms of international law." A French Foreign Ministry official said a confederation "implies international recognition of the `Turkish Republic of North Cyprus,' which we reject under U.N. resolution 541." Moscow also joined in dismissing Denktash's proposal out of hand as, "contrary to the multiple U.N. resolutions on Cyprus."
The British Foreign Office statement insisted that the U.K. promotes
"negotiations for a comprehensive Cyprus settlement aiming at a bizonal,
bicommunal federation as agreed by high-level agreements."
 Turkish Cypriot Reaction
Mehmet Ali Talat, leader of the Turkish Cypriot Republican Party, rejected
Denktash's confederation proposal. He stated that tension on the island
can only be defused by talks, adding that the objective of a federation
should not have been abandoned. He pointed out that confederation does
not comply with the Treaties of Guarantee and Alliance or the interests
of the Turkish Cypriots.
 Action at the UNGA
The battleground will now shift to New York where President Clerides
will address the U.N. General Assembly (UNGA) at the end of September.
In addition, he will meet with representatives of other interested parties--both
governments and international organizations--during his stay in the United
States. Clerides will be accompanied by Greek Cypriot political party leaders.
 New Ambassador Presents Credentials
Ambassador, Mrs. Erato Kozakou-Marcoullis, presented her credentials to President Bill Clinton on Sept. 10. An 18-year foreign service officer, Mrs. Marcoullis, previously served as Ambassador of Cyprus to Sweden from 1996 to 1998, with concurrent accreditation to Finland, Norway, Denmark, Iceland, Estonia, Latvia and Lithuania.
In formally presenting her credentials at the White House, the Ambassador noted, "The common values and principles of democracy, freedom, the rule of law and respect for human rights and human dignity are the cornerstone of both the domestic and foreign policies of our two countries."
The Ambassador went on to cite expanding trade relations, international cooperation on numerous issues, and cultural and educational exchanges that bind the two nations together. She expressed Cyprus's gratitude for the President's "personal commitment to finding a solution to the Cyprus problem that has brought so much suffering to our people."
In welcoming the Ambassador to Washington President Clinton said, "We have worked intensively with your government to help bring about a solution to the Cyprus problem, bearing in mind that any solution must be based on a bizonal, bicommunal federal framework and U.N. auspices." He added that, "The spirit of Cyprus is strong . . . I give my personal assurance that the U.S. will stay fully engaged in efforts to find a solution and we will not rest until success is achieved."
In presenting her credentials, the Ambassador assured President Clinton that, "On our part we are aiming at and remain committed to a just, viable, bizonal and bicommunal federal solution, that would guarantee the independence, sovereignty, territorial integrity and unity of Cyprus," on the basis of all relevant U.N. resolutions.
Unfortunately, she noted, Turkey and Turkish Cypriots refuse to negotiate, end their 24-year illegal occupation or support Cyprus's entry in the European Union despite demands from the international community that they do so.
The Ambassador also expressed hope for the future saying, "We are convinced, Mr. President, that the United States, which as you rightly said, is the world's most diverse democracy, will assist us in this noble goal [a unified Cyprus]. The dream of our people, that have been torn by the consequences of the Turkish occupation and the forcible division and separation, is to see our children, Greek Cypriot and Turkish Cypriot alike, to join hands and to grow up in peace and harmonious coexistence."
Ambassador Marcoullis, who studied law and political science, and holds a Ph.D. in sociology and political science, is no stranger to the United States. She has served as Consul in New York and as a member of the Permanent Mission of Cyprus to the United Nations.
The Ambassador, one of six Cypriot women holding important posts as
ambassadors abroad, is married to an eminent physician, Dr. George Marcoullis;
they have one son who is currently studying in the United States.
 Did You Know?
The U.S. is the single largest supplier of imports to Cyprus. They amounted to $684.2 million or 19 percent of the total last year.
The Cypriot trade deficit for the 1st half of this year dropped to $1,192.8 million. Total imports from European Union states made up 52.5 percent of the total.
On Sept. 23, a new Cyprus-U.S. Chamber of Commerce will be inaugurated in New York.
Raw materials account for 31.8 percent of Cyprus's total imports, with consumer goods 37 percent.
The population of Cyprus is about 750,000, 78 percent of Greek origin, 18 percent Turkish and 4 percent Maronite, Armenian and others.
Of Cypriots over the age of 15, 94 percent can read and write.
As a percentage to total population, Cypriot students rank at the top of foreign students attending American universities.
Cyprus ranks 23rd in the United Nations Development Program annual "Human Development Index" which registers life expectancy, income and education.
The almost fully digital telecommunications network of Cyprus is among the world's most advanced, with 60 lines per 100 inhabitants, 15 mobile connectors per 100 and 25 registered Internet users per 1,000 inhabitants.
There are 85,500 business entities currently registered in Cyprus. More than half of the total are wholly or partially owned by foreign investors.
Cyprus's land area is about 10,000 square kilometers, and typically
has 340 sunny days a year.
 U.S. Efforts
U.S. State Department Special Coordinator for Cyprus, Ambassador Thomas
Miller, visited Athens in early September to discuss ways to end the deadlock
on the Cyprus problem with Greek Foreign Minister Theodoros Pangalos. In
remarks before his meeting, Miller restated U.S. policy on securing a bizonal,
bicommunal federation in Cyprus.
"Cyprus has a right to self-defense, and no one in my government has questioned whether or not Cyprus has a right to defend itself and to prepare itself to, as all countries do, secure its proper defenses."
Miller's talks in Greece followed similar efforts to rekindle negotiations during a trip to Ankara in late August. After those discussions, Miller described his meeting with Turkish Foreign Minister Ismail Cem and Deputy Prime Minister Bulent Ecevit as "useful." However, he acknowledged that little progress had been made saying, "Look at my hands. As you can see they are empty."
The U.S. remains determined to get negotiations back on track, after the American-led initiative fell apart last May when Turkish Cypriot leader Rauf Denktash rebuffed U.S. Presidential Envoy Richard Holbrooke. In an interview in the September issue of Hermes magazine, U.S. Ambassador to Greece, Nicholas Burns, assured the "people of Cyprus," that, "We adhere to all U.N. resolutions, to the U.N. resolutions on Cyprus. We believe in the U.N. framework for Cyprus. We have not abandoned that." In response to an inquiry regarding the Russian missile question, Burns emphasized that regardless of stated U.S. opposition to deployment, Turkey would not have the right to strike against Cyprus if it takes place. "We've said that many times. We don't believe in the use of force or that the threat of the use of force is warranted in this case," he said.
On Sept. 8, U.S. Ambassador to Cyprus, Kenneth Brill, reiterated U.S. resolve to find a solution to the Cyprus problem. "The goal right now should be to get people into direct contacts and to try to get political negotiations underway and that is what we are working towards. . . . Here and in Washington our goal is to try to get people back into direct and constructive talks. We are trying to do everything we can in that regard and we will continue to do that," he said.
Meanwhile, the U.S. Congress has also been engaged. In a letter dated June 25 and made public in late August, 49 Members of Congress urged the Clinton administration to show more aggressiveness in its Cyprus policy. Noting that they have "long considered the forcible division and foreign occupation of part of Cyprus as unacceptable and a continuing source of tension and instability in an area which is vital to U.S. national and security interests," the letter highlights the increasingly intransigent position of the Turkish side and described preconditions set by Denktash as "clearly unreasonable" and reflecting "Turkey's lack of objectivity and true willingness to achieve a fair solution."
U.S. Senator Jack Reed (D-RI) visited Nicosia in late August meeting with Cypriot officials and leading overseas Cypriots to discuss the problem. He urged the administration to "work to ensure that the future sees an island that is not only demilitarized but also unified and independent and without the interference of outside forces." He continued saying, "What we have to do is not only to [im]press upon all the leaders of our country, but also in the world, that from the American perspective peace and justice in Cyprus is important to us and it should be important to all free people around the world."
 Cyprus & the EU
Accession Running Smoothly
In an effort to speed Cyprus's accession talks with the EU, the parliament of Greece has promised close coordination and cooperation with the Cypriot parliament. On Sept. 10, during a visit by members of the Greek Parliament European Issues Committee, the head of the Greek delegation stated, "We have the best possible agreement of close cooperation between the two Parliaments. . . . In the view of the people of Greece and Cyprus the Republic's accession to the EU will constitute an important step in efforts to settle the Cyprus problem which is at a crucial stage."
In early September Cyprus's chief negotiator with the EU, George Vassiliou, presented the EU with its negotiating positions on seven chapters for which the screening process has been concluded. He explained that in one field, telecommunications, Cyprus could require an extra year to fully open its market to competition if the EU completes its preparations for expansion by 2002. Should that be the case, Cyprus will request a grace period of one year on this chapter alone.
The Council of Ministers, chaired by President Clerides, approved the negotiating positions on the chapters in late August. They include science and technology, telecommunications and technologies information, training and youth issues, cultural and audio-visual policy, industrial policy, small-to-medium-sized businesses, common external policy, and civil security.
On Aug. 31, Ruairi Quinn, leader of the Irish Labour Party declared
that Cyprus's application to the EU should be seen in a context different
from the applications of other nations. "As a former Minister of Finance
I am completely aware of the very strong economic performance that Cyprus
has maintained in recent years, and the fact that while other countries
didn't meet the criteria of the Maastricht Treaty, Cyprus clearly did so,"
he said. He further noted that, "We would like to see Cyprus become a full
member of the EU sooner rather than later." In addition he cited his government's
desire to promote an end to the division of Cyprus stating, "We will be
of any assistance we can to help the people of Cyprus to arrive at a solution
which meets the needs that they want for themselves." With regard to talks,
Quinn stated, "from our experience the best form of defense is dialogue
and the best form of ultimate defense is for a mutual support, understanding
of everybody's positions and that removes tension."
"We would like to see Cyprus become a full member of the EU sooner rather than later. . . . We will be of any assistance we can to help the people of Cyprus to arrive at a solution which meets the needs that they want for themselves."
Also in late August, the Chairman of the Unified European Left of the Parliamentary Assembly of the Council of Europe, Jaako Laakso, expressed his support for a peaceful solution to the Cyprus problem saying, "Our task is to use the instruments we have. We consider that a peaceful solution is the reunification of the island." He further noted that Turkey was "losing its credibility in Europe by not fulfilling the decisions of the U.N. Security Council."
Meanwhile, members of Britain's House of Commons have assured Cyprus that they will work to keep the Cyprus problem high on the political agenda. After an Aug. 24 meeting with the Cyprus House of Representatives President, Spyros Kyprianou, British MP Nick Hawkins declared, "We had an extremely constructive and very helpful briefing," and promised to return to the House of Commons to "continue to take up the Cyprus issue."
Also on Aug. 24 after a meeting with President Glafcos Clerides, British High Commissioner to Cyprus, David Madden, said that Cyprus's EU screening process was ongoing and would continue into next year as scheduled.
 Budgets Approved
The Council of Ministers has approved Cyprus's 1999 state budgets. They provide for net revenue of $2.2 billion and net expenditure of $3.4 billion.
Finance Minister Christodoulos Christodoulou stated after the meeting that prospects for 1999 are encouraging. The rate of economic growth is expected to reach 4 percent in real terms. Unemployment will be likely to remain at 3 percent, and the rate of inflation between 2.5 and 3 percent. The public deficit and public debt are expected to rise to 6.3 and 61.7 percent of the gross domestic product, respectively.
The budgets will be submitted to the House of Representatives for final approval by the end of September.