US embassy cable - 04BRUSSELS1870

C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 001870 
 
SIPDIS 
 
E.O. 12958: DECL: 04/28/2014 
TAGS: PREL, EAID, CY, TU, EUN, USEU BRUSSELS 
SUBJECT: EU/CYPRUS: DEVELOPING THE EU'S POST-REFERENDA 
APPROACH 
 
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) April 28 COREPER discussion on defining the Green 
Line for the European Union focused on the extent to which 
the Green Line is a barrier and to what extent it will be a 
border.  Roughly speaking, our contacts report that the Greek 
Cypriots would like a barrier without the political 
characteristics of a border; the Commission and other Council 
members have been more open to the mix of barrier and border, 
with those in favor of rewarding Turkish Cypriots advocating 
a minimal barrier to the passage of people, goods, & 
services.  Under EU procedures, the Commission would have the 
authority to develop implementing procedures for the Green 
Line; with COREPER still in session April 28 at the time of 
this writing, Greece is threatening to veto any COREPER 
decision not giving the Council oversight of the final 
dispositions of the Green Line (and thus a Greek Cypriot 
voice to define the political parameters). 
 
2.  (C) The debate on disbursement modalities for the EU's 
package for northern Cyprus has yet to be engaged.  The 
Council has endorsed the Commission's disbursement of a 259 
million euro assistance purse in the north.  On the other 
hand, because the previous package was predicated on a Cyprus 
settlement, the Commission has now been tasked with coming up 
with a new financial instrument to define the disbursement. 
This new financial instrument will need to be approved by the 
Council at 25 and the European Parliament.  The Commission 
prefers an approach including a Commission office in northern 
Cyprus, and disbursement with a maximum degree of autonomy 
from the Republic of Cyprus.  But discussions on the 
Commission's approach in the Council are expected to be 
difficult, given Republic of Cyprus involvement.  Separately, 
RELEX Commissioner Patten told us April 27 that the money 
will certainly be spent, although the modalities remain to be 
decided.  Patten also predicted that Turkey would get a 
positive Commission "avis" to open accession talks in 
December.  End summary. 
 
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The new Green Line: 
Border and Barrier? 
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3.  (C) A senior Commission official on April 28 reviewed the 
Cyprus Green Line discussion in the COREPER (The EU's highest 
sitting Brussels body: the Committee of Permanent 
Representatives).  The COREPER is still meeting at the time 
of this writing.  Our interlocutor told us that the focus of 
COREPER's discussion is defining the terms upon which EU 
rules would be promulgated and implemented in relation to the 
Green Line.  The assumption before the failure of the 
referendum was that this discussion would focus on validating 
the Annan Plan's approach to the Green Line; since April 24, 
the debate has shifted to the extent to which the Republic of 
Cyprus gets in-put into the Commission's drafting of the 
rules governing the Green Line. 
 
4.  (C) The COREPER discussion is now focused on the 
parameters of the Green Line as a demarcation of the EU's 
frontier with an area in which the acquis communitaire (EU 
law & regulation) do not apply.  The crux of the matter for 
the EU is the status of the Green Line.  The UK has proposed 
changes to the Green Line rules that would make the 
demarcation more permeable and its dispositions more 
favorable to the Turks.  The Greek Cypriot position is that 
the Green Line must not be a border (for this would imply 
recognition of "TRNC" sovereignty) but must remain a barrier. 
 For those seeking to reward the Turkish Cypriots for their 
support of reunification, the Green Line must take on some 
characteristics of a border while losing its aspect of a 
barrier to the free flow of people, goods, and services. 
This is a tricky mix. 
 
5.  (C) Our contact reported that Enlargement Commissioner 
Verheugen is happy with the UK proposed changes to the Green 
Line rules, but believes that the EU could go further in the 
direction of the Turkish Cypriots.  We understand that this 
is unlikely, and that the preferred position of the 
Commission is now to leave current rules in place or else 
limit discussion to the immediate question of free passage of 
persons, thus "splitting" the legislation. 
 
6.  (C) Typically, the Commission would then be tasked with 
drafting the implementing rules for the passage of goods and 
services without the interference of the member states.  In 
this case, however, we have been told that Greece at COREPER 
is holding out for a Republic of Cyprus voice approving 
whatever the Commission drafts.  The Commission opposes this, 
but the decision on this issue rests with COREPER ambassadors 
working on the basis of consensus (which until May 1st 
includes Greece but excludes Cyprus). 
 
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Carrots for the North 
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7.  While the 259 million euro Commission package for Cyprus 
has been blessed by the Council, the modalities for 
disbursement remain open.  Though even Papadopoulos is on the 
record that it is appropriate that the money be spent in 
Northern Cyprus, there is a major difference of approach 
between Commission and Council (including Cyprus).  The 
Commission wants to be able to disburse independently of 
Cyprus authority. Verheugen spoke to the European Parliament 
on April 27, stating that the Commission would now have to 
establish an office in Northern Cyprus, as the financial 
package for assistance would be too great to manage through 
the UN.  Verheugen's Cyprus Adviser (strictly protect) told 
us April 28 that Verheugen hasn't really formulated an 
approach yet, but simply doesn't want Cypriot control over 
his policy process in the "TRNC".  In his remarks to 
Parliament, Verheugen rejected allegations that an office in 
northern Cyprus would imply recognition of the Northern 
Cypriot government, comparing the Cypriot case with Taiwan, 
where the Commission has effective cooperation without formal 
recognition of Taiwan. 
 
7.  Verheguen's challenge is that Cypriot President 
Papadopoulos wants a hand in deciding how the money will be 
spent in the north, and according to Verheugen's Cyprus 
adviser, once the Commission develops its new financial 
instrument for use in northern Cyprus, both the Council (by 
consensus at 25) and the European Parliament through its 
standard budgetary approval process will have to endorse 
whatever Verheugen proposes.  This virtually guarantees that 
Republic of Cyprus redlines will be asserted and protected in 
the Council. 
 
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Wary on Sovereignty 
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8.  Our Council and Commission interlocutors continue to 
express extreme wariness about offering the "TRNC" any of the 
accoutrements of sovereignty.  "TRNC President" Denktash is 
still in power, and one key Solana advisor told us April 24 
that the worst case development for the EU would be a "TRNC" 
candidacy for accession.  The EU's legal experts rule out 
such a possibility, however, since all EU members recognized 
the indivisible borders of the united Cyprus through the 
Accession Treaty, which governs the terms of their political 
union with each other.  Indeed, Enlargement Director Matthias 
Ruete, speaking to EUR/PDAS Ries on April 26 said that the 
accession treaty of union precluded recognition of the "TRNC" 
by EU members. 
 
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RELEX Commissioner Patten 
------------------------- 
 
9.  Speaking informally at a NGO social event April 27, RELEX 
Commissioner Chris Patten told us the Commission is still 
trying to figure out how to spend money in Northern Cyprus. 
Patten expects the Commission to open an office to oversee EU 
assistance.  (Patten didn't even bother to mention Greek 
Cypriot opposition to this prospect.)  While there will be 
legal hurdles to managing the process, Patten was confident 
the Commission would find a way, he said. 
 
10.  Patten doubted the Greek Cypriots could openly oppose 
any efforts to disburse money in the north, noting that they 
were "on their heels" diplomatically after their blatant 
efforts to stifle opposing views on the referendum.  (Note: 
Other Council and Commission interlocutors share this view. 
End note.)  Despite expected opposition from Greek and 
Cypriot parliamentarians, Patten was confident the Commission 
would easily gain Parliamentary approval for spending in 
Northern Cyprus; he expressed no opinion about whether such 
funding could be directed through "TRNC" entities, which we 
have heard is the crux of the current debate inside the 
Council. 
 
11.  Finally, on Turkey's accession bid, Patten told us the 
Commission has no other option but to give a positive avis to 
begin accession negotiations based on Turkey's technical 
merits.  Still, he said the political climate in Europe is 
not receptive to Turkey's candidacy.  He viewed the 
opposition of conservative parties in Germany and Spain as 
the most serious obstacles to Turkish admission.  (Comment: 
Patten's inclusion of the Spanish opposition among the 
nay-sayers is a new one for us.  EU insiders generally 
include France, Germany, Austria, and the Netherlands as the 
core group of Euro Turcophobes.  Patten's inclusion of the 
Spanish opposition is particularly odd given that its ability 
to influence the decision on Turkey is extremely limited, so 
far as we are aware.  End comment.)  Schnabel