US embassy cable - 04BRUSSELS1501

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 001501 
 
SIPDIS 
 
E.O. 12958: DECL: 04/07/2014 
TAGS: PREL, PGOV, EAID, CY, EUN, USEU BRUSSELS 
SUBJECT: GETTING TO YES IN THE CYPRUS REFERENDA: ACTION 
PLAN FOR THE EUROPEAN UNION 
 
REF: (A) NICOSIA 0586 (B) ATHENS 1196 
 
Classified By: USEU External Affairs Officer Andrew Erickson 
for reasons 1.5 (b) and (d). 
 
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Summary: 
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1.  (C) With Cyprus guaranteed entry into the EU no matter 
what the outcome of the referenda, EU officials feel bereft 
of carrots to encourage a positive Greek Cypriot response. 
Promoting a "yes" vote in Cyprus will depend on our use of 
the Cyprus Pre-donors' Conference on April 15 to prove that 
there are real economic benefits for the south in the Annan 
Plan, and also to encourage clear political signals from 
European governments that the EU endorses the UN's Plan as 
the opportunity of a generation and the "European way."  USEU 
recommends the following efforts in the run-up to and 
immediately after the Pre-Donors' Conference: 
 
-- Senior EU leadership, in particular Hirep Solana, but also 
Enlargement Commissioner Verheugen and Relex Commissioner 
Patten, should be pressed to engage Greek and Cypriot 
leadership both publicly and privately on the need to support 
the Annan Plan. 
 
-- Encourage a strong indication of European support for a 
successful referendum at the April 16 Gymnich. 
 
-- Work with the European Parliament to send a signal via a 
non-binding resolution encouraging a  "yes" vote to the Annan 
Plan. 
 
At the conference itself, we should: 
 
-- Seek specific commitments to identify European Commission 
funding for the property commission -- the clearest signal to 
Greek Cypriots that they too will benefit from peace. 
 
-- Advocate with the EU concerted, visible efforts to discuss 
and ideally to develop intra-zonal investment packages that 
will benefit all islanders. 
 
-- Consider ear-marking pledges to elements of the Annan Plan 
that specifically address compensation for Greek Cypriots and 
that can be used to make a political argument in the south 
for a "yes" vote to the Annan Plan. 
 
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The EU's Cyprus Realities 
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2.  (C) EU interlocutors have repeatedly told us that 
regardless of outcomes of the Annan Plan referenda, Cyprus 
will enter the EU on May 1st.  (Indeed, legally, there is no 
other option, as the accession treaty has been ratified.) 
The Annan Plan referenda in north and south will simply 
determine whether the island enters the EU as a unified whole 
or as the south alone.  Turkish Cypriot voters in the North 
know that their one chance to enter the Union soon will be a 
"yes" vote -- and the Turkish government at home knows that 
its future hopes for accession also hinge importantly on a 
positive outcome.  The battle then clearly is on the Greek 
side of the island.  Since the accession question for the 
Greeks has been resolved, persuasion must take other forms. 
The problem is that this reality defines and constrains EU 
leverage on the Republic of Cyprus, as the Greek Cypriot 
population knows that it will enter the EU irrespective of 
the outcome of the poll.  Informed northern Cypriot voters, 
in contrast, by now are equally aware that their only chance 
of entering the EU for the foreseeable future is predicated 
on a "yes" vote in the referendum. 
 
3.  (C) Our challenge is to promote a "yes" vote in the south 
given the realities cited.  We also understand from the 
Commission that many Greek Cypriots see the Annan Plan as 
providing far more carrots to the Turks than to the Greeks. 
A successful strategy to encourage a "yes" vote by the Greek 
Cypriots must address this reality.  While Hirep Solana, 
Enlargement Commissioner Verheugen, and EU Parliament 
President Pat Cox have repeatedly stated their desire to 
facilitate a settlement publicly and privately, they -- and 
their staffs -- admit privately to us that the political 
leverage of accession is now gone.  As officials of the 
Union, they have also been reluctant to publicly encourage a 
member state to adopt a specific course of action, especially 
if Greek government support is tepid.  Brussels-based 
officials know that they hold no leverage but political 
opprobrium against a rejectionist Cypriot republic.  The EU's 
relative failure to enforce discipline against the Austrian 
government during the Haider crisis proved that Cyprus has 
little to fear from the EU in this regard. 
 
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Cyprus as the spoiler 
of Turkish accession 
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4.  (C) The larger question of Turkish accession is another 
element to the Cyprus equation in Brussels.  We have heard 
that some EU member countries wary of offering an accession 
negotiation date for Turkey are secretly hoping for failure 
of the Annan Plan.  (Informed Commission interlocutors cite 
France, Austria, and the Netherlands as members of the group 
of those opposed.)  The entry of the Republic of Cyprus 
without northern Cyprus into the EU would immensely 
complicate Turkey's EU vocation, and provides these 
Turko-skeptics an easy out.  Even strong friends of Turkey in 
the EU, such as Enlargement Commissioner Verheugen, have told 
us that the political reality of the continued existence of 
the "TRNC" -- and the illegal Turkish occupation of a part of 
EU territory -- would be a potential deal-killer for Turkey 
in December, no matter whether Turkey and Turkish Cypriots 
supported the peace plan. 
 
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Our last best shots: 
Using the Pre-donors' 
Conference and Gymnich 
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5.  (C) Given the current political reality in Brussels, our 
last shots at favorably influencing a Cyprus deal under the 
Annan Plan are primarily through the April 15 Pre-Donors' 
Conference and the April 16 informal EU foreign ministers' 
meeting.  We will need to change Greek Cypriot perceptions 
that the deal does not offer them enough and that waiting for 
more is not a viable strategy.  Thus, we need to work with 
the EU to ensure that the message rings loud and clear out of 
the conference that settlement will bring concrete benefits 
to the south as well as the north, and that "Europe" favors a 
yes vote.  There are two key elements to this effort: 
political and public diplomacy aimed at steering the Cypriot 
population toward yes, and setting out a series of financial 
incentives to convince waivering Greek Cypriots they will 
benefit from unification.  Obviously, a key element in this 
will be the need to work with the European Commission and 
other key potential donors at a strategy to be unveiled at 
the Pre-Donors' Conference to underscore the EU and the 
international community's commitment to addressing the 
concerns of the south.  Such an approach might include: 
 
-- pushing the EU to ensure sufficiently high-level 
representation at the conference, and a specific commitment 
by the European Commission to fund or identify funding for 
the property commission, which will be of particular benefit 
to the south.  The south needs tangible evidence of the 
benefits of the Annan Plan. 
 
-- concerted, visible EU efforts to develop intra-zonal 
investment packages that will benefit all islanders.  An 
example of this might be a private-public partnership 
addressing Greek desiderata for the development of the 
tourist industry in ways that benefit both sides of the 
former Green Line. 
 
-- ear-marking pledges to elements of the Annan Plan that 
specifically address compensation for Greek Cypriots, 
especially the property commission.  Given that property 
issues are particularly important to the south, we need to 
show just how important this issue is to us. 
 
6.  (C) The donors' conference will be followed immediately 
by the informal EU Foreign Ministers' meeting in Dublin. 
This would provide a good occasion for some back-room 
straight-talk from their European colleagues with the Greek 
and Cypriot FM's, and could also provide an opportunity for 
the Irish EU Presidency to come out publicly with a call for 
Cypriots to step up to the historic occasion provided by 
these votes -- combined with a public pledge that the EU is 
ready to support a peace deal.  We recommend a letter from 
the Secretary to the Irish FM, copied to his colleagues, and 
perhaps followed up by an S phone call. 
 
7. (C) We also endorse Athens' and Nicosia's views that 
senior EU leadership, in particular Hirep Solana but also 
Enlargement Commissioner Verheugen and External Relations 
Commissioner Patten, should be strongly encouraged to engage 
Cypriot leadership both publicly and privately on the need to 
support the Annan Plan.  The Secretary raised this April 2 
with Solana, and he pledged to do all he could to help 
convince the Greek Cypriots.  It would be useful if the 
Secretary followed up to see what Solana has been doing.  A 
 
SIPDIS 
well-placed press interview by Solana or another leading EU 
figure could be a key indicator of how far the EU is prepared 
to lean in favor of an agreement.  In a similar manner, the 
Irish Presidency should become engaged, and PM Ahern and FM 
Cowen encouraged to raise with their Cypriot and Greek 
counterparts the importance of seizing this historic 
opportunity. 
 
8. (C) We also believe that it would be useful to engage 
European Parliament President Cox with an eye towards a 
parliamentary resolution advocating support for the plan. 
Ambassador Schnabel will seek an occasion in the coming days 
to discuss the issue with Cox. 
 
SAMMIS