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Peace comes at a price

By Lefteris Adilinis
The considerable cost of a Cyprus settlement is one of the main concerns of international players following the current peace talks, the Cyprus Weekly has learned.
And diplomats argue that the two sides should start serious discussions from now, on the implementation of a solution.
For the moment, RoC President Nicos Anastasiades and Turkish Cypriot leader Mustafa Akinci are focusing on the political elements of a possible deal, having trusted the economic aspects to the IMF and World Bank experts. But diplomats say they also need to have a plausible plan in the event the leaders strike an agreement within the declared timeline by the end of the year.
Informed sources have told the Cyprus Weekly that financing and implementation issues will hopefully be settled during the end-game, together with territory, property, security and guarantees.
The first serious attempt to lead the negotiations into a final multilateral conference will take place during a three-party meeting between the two leaders and the UN Secretary General on September 26 in New York, a few days after the international organisation’s General Assembly.
Akinci has already indicated that a multi-party conference has been pencilled in for October. Anastasiades has said he will participate in multi-party talks if there is substantial progress in the negotiations and a deal looks feasible.

The pillars
The Cyprus Weekly understands that IMF and World Bank experts will be presenting a comprehensive report on settlement economics at the beginning of October. It is expected that proposals on how to cover the cost of the solution will be a vital part of the report. A senior diplomat has explained to our newspaper that settlement money should be spent on four main pillars:
Infrastructure projects: Back in 2004, the Planning Bureau estimated costs of CYP 2.4 billion (€4bn) for infrastructure in the fenced town of Famagusta and the construction or restoration of buildings needed for the new state of affairs in each of the post-solution federal units.
Federal structure: Constructing the buildings to house the federal government will be a significant expense. The Annan Plan of 2004 provided for the different departments of the federal government to be housed in the old Nicosia airport area, currently within the buffer zone, where different UN services are based.
Property compensation: This will be the biggest part of the cost. According to insiders, experts are looking at a cost of only €3bn to €5bn, but they acknowledge much bigger figures have also been doing the rounds. A recent leak of World Bank figures was read as putting the compensation cost at €13bn. However, insiders told the Cyprus Weekly this is before deductions for property returned through territorial adjustment and reinstatement. Insiders also point out that any agreement’s implementation will depend on money made from developing existing properties in order to facilitate compensation.
EU funds: These involve structural funds, or payments and subsidies from European Union programmes to finance projects, for instance, on education or agriculture.

Implementation
During their last meeting on Wednesday, Anastasiades and Akinci started discussing how to implement a possible settlement. The Greek Cypriots have requested the return of Varosha and the buffer zone to come under their control right from the start of the new state of affairs. They also requested a significant number of Turkish troops to withdraw immediately. The Turkish Cypriots, reportedly, do not deny the need for such measures, but they point out that transitional periods should be set for their smooth implementation.

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