January 2012Covering the period 1-31 December 2011

Monthly BulletinIssue No. 22

Marcoullis-Clinton talks in Washington • EU rejects Turkish threats • UNFICYP mandate renewed • Municipal elections • Adoption of 2012 budget • Interior Ministry’s EU Presidency priorities • Christofias-Schulz talks

C Y P R U S NEWS

Natural gas discovery announced

Cypus’ EU Representation

•Permanent Representative Kornelios S. Korneliou.

B R U S S E L S E D I T I O N

•Natural gas discovery... The Noble Energy drilling platform in the Cypriot exclusive economic zone (EEZ).

Cyprus New

s Agency

The much-anticipated first results of exploratory drilling by the US Noble Energy company in Cyprus’ exclusive economic zone (EEZ) in the Mediterranean, given by President Demetris Christofias in a televised address on 28 December, confirmed that a reserve containing between five and eight trillion cubic feet of natural gas has been discovered. The find was described by the President as “a historic development”.

President Christofias said that drilling in block 12, to a depth of 5,860 metres in water depth of about 1,689 metres, had located approximately 100 metres of “net natural gas pay” containing between five and eight trillion cubic feet of gas with an average of seven trillion cubic feet. He added that the field covers about 40 square miles and that an additional appraisal well will be drilled.

“The discovery of natural gas in our EEZ”, continued the President, “creates big prospects for Cyprus and our people, which we will utilise collectively and seriously in favour of the public interest”. He added: “New auspicious financial prospects are opening for the future of the island. Cyprus is entering the energy map of Europe

with prospects of making a substantive contribution to the EU’s energy security.”

The President thanked Noble Energy for its work to date and looked forward to further co-operation with the company. He said that the Government had already begun long-term planning for gas production, assisted by a team of experts. “At this historic moment”, he said, “we reiterate our commitment to continue working hard...for the vindication of our people’s expectations for a better tomorrow for our country.”

On the political implications of the discovery, President Christofias said that “the utilisation of natural gas could constitute an incentive for the reaching of a solution to the Cyprus problem”—a solution that would terminate the illegal Turkish occupation and “restore the human rights and the basic freedoms of our people, Greek Cypriots and Turkish Cypriots alike”.

The President called on Turkey “to show a spirit of peace and reconciliation” and “to avoid any adventurist actions and provocations” which cause problems for the UN-led settlement talks as well as tensions in the Eastern Mediterranean region.

Message from Permanent Representative Ambassador Kornelios S. KorneliouDear Readers,

Happy New Year, Happy 2012 to all of you and may the new year be a prosperous one for the European Union and its citizens!

2011 was a difficult year for all of us. The world economic crisis affected all EU member states and influenced not only our living standards, but also the way European citizens think about Brussels.

2011 was also a difficult year for Cyprus since the island remains still divided. Despite our disappointment with the lack of substantial progress during last year, our main priority for 2012 continues to be the solution of the problem.

2011 was at the same time a historic year for the Republic of Cyprus and its citizens. The confirmation of the existence of natural gas in Cyprus’ Exclusive Economic Zone creates great prospects for the country and its people on the economic, social and political sphere.

Now, it’s the time to make a new start and work all together for a Better Europe. In this regard, we are looking forward to the first Cyprus’ Presidency of the Council of the European Union during the second half of 2012 in order to face our common challenges.

With these thoughts I wish you all the best for 2012!

Marcoullis meets Clinton in WashingtonEU leaders reject Turkish threats against Cyprus

•Washington meeting.. Cyprus Foreign Minister Marcoullis is greeted by US Secretary of State Clinton.

US State D

epartment

High abstention rate in municipal elections

UN peace-keeping mandate renewed

Municipal elections held in Cyprus on 18 December took place smoothly, although political leaders expressed concern at the abstention of about a third of voters, more than twice the abstention rate in the previous such elecxtions in 2006.

Results in the major municipalities showed both a tendency for continuity and a mood for change. In the capital Nicosia, Constantinos Yiorkatzis is the new Mayor of the city, with the current incumbent

The Cyprus Government described as positive the adoption of UN Security Council Resolution 2026 (2011) which renews the mandate of the UN Peacekeeping Force in Cyprus (UNFICYP) for a further six months until July 19, 2012, saying it was “sufficiently balanced”.

The Government welcomed in particular the non-inclusion of any reference to convening an international conference on Cyprus without prior agreement on the internal aspects of the problem. In a written statement, acting Government Spokesman, Christos Christofides said that Resolution 2026, which was adopted on 14 December, includes wording that “is based on the Secretary-General’s statement at Greentree which sets as a precondition the resolution of all internal aspects of the problem before proceeding with a multilateral conference. At the same time, the consent of the two sides to convene such a conference is required, a

position which we agree with”, he added.Mr Christofides also noted that the

resolution does not contain any form of deadlines and that there is an appeal for further work in the next months, towards a solution to the Cyprus problem. He said that the Resolution points out the significance of practical steps by the interested parties on Cyprus to help the leaders of the two communities in the negotiations, a reference which indirectly refers to Turkey. He also drew attention to the fact that Resolution 2026 confirms previous resolutions on Cyprus and especially resolution 1251, which clearly define the basis for a solution of the Cyprus issue. At the same time, he said, the resolution adopts previous references to the role and presence of UNFICYP without adopting, under any circumstances, any threat to change UNFICYP’s status in Cyprus, based on developments at the negotiating table.q

Cyprus Foreign Minister Erato Kozakou Marcoullis had talks in Washington on 20 December with US Secretary of State Hillary Clinton, receiving confirmation of US support for Cyprus’ right to explore for oil and gas in its exclusive economic zone (EEZ) of the Mediterranean (see page 1).

Mrs Clinton also conveyed, according to a US State Department spokesperson, the US’ “continued support for the Cypriot-led, Cypriot-owned process, under the auspices of the UN Good Offices mission led by Special Adviser Alexander Downer, to reunify the island as a bizonal, bicommunal federation”.

Dr Marcoullis said after her talks with Mrs Clinton that she had highlighted to her US counterpart the strategic role of Cyprus, especially in regard to the potential production of natural gas and related co-operation with other countries in the region. In this context, she thanked Mrs Clinton for the principled stance the US administration has maintained regarding Cyprus’ sovereign rights in relation to explorations for natural gas within its EEZ. On the ongoing negotiations on the Cyprus problem, Dr Marcoullis said that she briefed Mrs Clinton on the difficulties arising from the negative Turkish stance in the talks and assured her that the Greek Cypriot side wanted the talks to move forward and progress to be made the soonest possible.q

Eleni Mavrou having conceded defeat. Meanwhile, in the coastal towns of Limassol and Pafos, the winners were the incumbent mayors Andreas Christou and Savvas Vergas.

The Municipality of Strovolos—one of the largest on the island—changed hands, with the new Mayor Lazaros Savvides taking over from incumbent Savvas Eliofotou. Larnaca also elected a new mayor, Andreas Louroudjiadis.q

Turkey’s threats to freeze its relations with the EU when Cyprus holds the rotating EU Presidency during the second half of 2012 were unanimously condemned by the European Council which was held in Brussels on 8-9 December.

The 27 leaders, recalling the relevant General Affairs Council (GAC) conclusions of 5 December with regard to Turkish statements and threats, expressed their “serious concern” and called “for full respect of the role of the Presidency of the Council, which is a fundamental institutional feature of the EU provided for in the Treaty”.

President Christofias noted after the meeting that the European Council had unanimously condemned Turkey’s threat, underling that “we have had the full support of the Council”.

The EU GAC held in Brussels on 5 December delivered a severe rebuke to Turkey, calling for a cessation of threats and/or actions against EU member state Cyprus for exercising its sovereign right to explore for hydrocarbons in its exclusive economic zone of the Mediterranean. The Cyprus Government, which was represented at the meeting by Foreign Minister Erato Kozakou Marcoullis, expressed its satisfaction with the EU position.

In its conclusions, the Council expresses “serious concern and urges the avoidance of any kind of threat or action directed against a member state, or source of friction or actions, which could damage good neighbourly relations and the peaceful settlement of disputes”. The Council’s conclusions continued: “Furthermore, the EU stresses again all the sovereign rights of EU member states which include, inter alia, entering into bilateral agreements, and to explore and exploit their natural resources in accordance with the EU acquis and international law, including the UN Convention on the Law of the Sea.”

The Council also regretted Turkey’s declared intention to freeze its relations with the EU when the Presidency is held by Cyprus in the second half of 2012 and its continued refusal, despite repeated calls, “to fulfil its obligation of full, non-discriminatory implementation of the Additional Protocol to the Association Agreement”. The Council noted in particular that Turkey “has still not made progress towards the necessary normalisation of its relations with the Republic of Cyprus”.

The Council declared that it “expects Turkey to actively support the ongoing negotiations aimed at a fair, comprehensive and viable settlement of the Cyprus problem” in accordance with the relevant UN Security Council resolutions and with EU principles.q

•EU priorities announced... Interior Minister Neoclis Sylikiotis.

Sylikiotis sets out EU Presidency aims

Population increase

Cyprus New

s Agency

Christofias-Schulz talks in Brussels

Fiscal consolidation in 2012 state budget

Athena Mechanism presidency assumed

Cyprus New

s Agency

The Government’s budget for 2012, providing for expenditure of around €7.5 billion (down 6 per cent on 2010), was approved with amendments by the House of Representatives on 16 December by 30 votes to 20. Described by the Finance Ministry as the tightest for 35 years, the budget incorporated austerity measures aimed at reducing the fiscal deficit from an anticipated 6.2 per cent of GDP in 2011 to 2.8 per cent in 2012, as promised by Cyprus to the European Commission.

The new austerity measures included an increase in the rate of value-added tax (VAT) from 15 to 17 per cent, to take effect on March 1, 2012, rather than at the beginning of the year, as proposed by the Government. Also agreed was a two-year freeze on salaries in the public sector, a special levy on private-sector employees and an increase in company profits tax from 17 to 20 per cent.

In presenting the budget to the House of Representatives, Finance Minister Kikis Kazamias said that the main challenge facing the Cypriot economy was to achieve

fiscal consolidation.Noting that the Cypriot economy has

managed to record some improvements in the first half of 2011 but was hindered by the global financial conditions, Mr Kazamias said that Cyprus’ seasonally adjusted GDP had fallen by 0.7 per cent in the third quarter of 2011, so that the projected growth rate for the year as a whole had been revised downwards to 0.5 per cent. Furthermore, he informed the House that unemployment was expected to average around 7.5 per cent in 2011, compared with 6.2 per cent in 2010, and that the year-on-year inflation rate reached 3.4 per cent in January-October 2011, while for the whole of 2011 it was projected to reach 3.5 per cent. He added that the public deficit was expected to be around 6 per cent of GDP, while public debt was expected to reached 65.5 per cent.Mr Kazamias on 23 December signed an agreement in Moscow under which Cyprus would receive a loan of €2.5 billion from Russia. The first €590 million tranche of the loan was received on 29 December.

The completion of the common European asylum system by the end of 2012 was identified by Interior Minister Neoclis Sylikiotis on 20 December as a key priority for his Ministry during the Cypriot EU Presidency in the second half of 2012. Mr Sylikiotis said that in the sphere of asylum policy there was a need for “more Europe, not less” and that the EU should act in a more co-ordinated manner. The aim, he added, should be a uniform procedure for examining applications and jointly addressing the pressures faced by certain member states.

He listed as other priorities the adoption of policies for the integration of immigrants and the co-ordination of humanitarian responses in times of crisis. Commenting in particular on the issue of the integration of immigrants, Mr Sylikiotis said that, at present, there is no common EU policy on the matter, adding however that drafting such a policy was feasible.

Mr Sylikiotis said that during Cyprus’

The readiness of the Ministry of Defence and the National Guard to undertake defence responsibilities in the EU framework from 1 January 2012—six months ahead of Cyprus’ assumption of the EU Presidency for the second half of 2012—was confirmed by Defence Minister Demetris Eliades on 9 December.

Mr Eliades explained that from the beginning of 2012 Cyprus will assume the presidency of the Athena Mechanism for financing EU military operations. This was due to the fact that Denmark, the holder of the EU Presidency in the first half of 2012, does not participate in the EU’s security and defence policy pillar, whereas Cyprus does.

The population of the Government-controlled area of Cyprus was 838,897 on 1 October, according to the preliminary results of the 2011 national census announced by the Statistical Service on 29 December. This figure was 21.7 per cent higher than the population total shown by the 2001 census, in part because of a substantial increase in the number of resident foreign nationals to 21.4 per cent of the total.

The results showed a 51.3 to 48.7 per cent gender split as between women and men respectively. Nicosia district accounted for 38.8 per cent of the population, Limassol 28 per cent, Larnaca 17.1 per cent, Pafos 10.5 per cent and Famagusta 5.5 per cent.

Presidency, three EU ministerial meetings would be held in the island. An informal Council of Justice Ministers would be held on 23-24 July, while two meetings would take place in November, one for the integration of immigrants and the other for territorial cohesion and urban development.

The inadmissibility of Turkey as an EU candidate making threats against an EU member was stressed by the president of the Socialist Group in the European Parliament, Martin Schulz, in talks with President Demetris Christofias in Brussels on 8 December. They discussed the latest developments on the Cyprus problem, including Turkish threats against Cyprus’ right to explore for oil and gas in its exclusive economic zone (EEZ).

Speaking after the meeting, Herr Schulz said that, as a supporter of Turkish accession to the EU, he had been “really angry” at Turkey’s threats to Cyprus over the EEZ exploration and its declared intention to freeze relations with the EU during Cyprus’ EU Presidency in the second half of 2012. He said that he had told the Turkish Government that it must respect “some fundamental rules”, including not threatening an EU member.q

•Debate in the House... The Cyprus deputies deliberate on the Government’s budget proposals for 2012.

N o t e s & N e w sN o t e s & N e w s

Cyprus Tourism O

rganisation

•Striking facade.. The corridors of the historic Kykkos Monastery in the Troodos mountains.

Cyprus New

s Agency

•Exploring the depths... Investigation of the shipwreck of a classical mechant vessel off Mazotos-Moroni.

Cyprus New

s Agency

•Solidarity with Japan... Children from the area devastated by an earthquake and tsunami are received in Nicosia.

In Focus... Troodos mountains, the majesty of natureRising nearly 2,000 metres above sea level in central Cyprus, the Troodos mountains provide visitors with panoramic views, nature in all its majesty and charming villages preserved from days gone by, with cobbled streets and terraced slopes of pine forests, vineyards and luxuriant orchards.

Troodos villages are renowned for their traditional architecture, their wineries and their superb Byzantine churches, ten of which have been placed on UNESCO’s World Heritage List. Dating from the 11th to the 17th centuries, the churches are found in the Solea, Marathasa and Pitsilia regions of the Troodos mountains and are adorned with beautiful frescoes and murals.

Also situated in Marathasa, is the impressive Kykkos Monastery, the richest and most lavish of the monasteries of Cyprus. The monastery sits on a mountain peak, at an altitude of 1318 metres northwest of Troodos. Dedicated to Virgin Mary (Panagia), it possesses one of three icons attributed to Saint Loukas the Evangelist. The icon,

covered in silver gilt, is in a shrine made of tortoise shell and mother-of-pearl that stands in front of the iconostasis.

Visitors to the region can also follow one of numerous nature trails through areas of exceptional natural beauty, discovering the unique flora found on Troodos with nearly 800 different plant species, 72 endemics, 12 of which cannot be found anywhere else in the world. Occasionally, visitors may spot a Cyprus mouflon, a kind of wild sheep peculiar to the island, which roams free in the extensive forests. Meanwhile, birdwatchers may spot the rare and protected eagles or the colourful hoopoe with pink body, black and white crest and a call which can be heard from miles around.

Other activities available to visitors include mountain biking, fishing in mountain reservoirs and skiing when snow comes in the winter. There are also several ecclesiastical and folk art museums to be visited such as the Museum of Kykkos Monastery, housing priceless collections of

antiquities and art illustrating the grandeur of the history of Cyprus; the Rural Museum in Fikardou village; the Centre for Byzantine Iconography in Omodos village; and the Pylavakion Pottery Museum in Foini village.

For more information on the Troodos mountains go to www.visitcyprus.com

President Demetris Christofias signed the book of condolence opened at the Czech Embassy in Nicosia to mark the death of Vaclav Havel, the first President of post-communist Czechoslovakia (1989-92) and then President of the Czech Republic (1993-2003), who died on 18 December at the age of 75. President Christofias said that Vaclav Havel “will always be remembered as a prominent figure in the history of the Czech Republic”.A group of 25 children from the Fukushima and Miyagi areas of north-eastern Japan, where a nuclear power station was seriously damaged by an earthquake and tsunami in March, were hosted in Cyprus for Christmas and New Year, following an invitation by the Cyprus Ministry of Foreign Affairs. For the visit, the Ministry cooperated with the Japanese Embassy, the Church of Cyprus, the non-governmental Organization “Volunteer Doctors Cyprus” and the “Women’s

Federation for World Peace” (WFWP). The children and accompanying adults were received by President Christofias and Foreign Minister Erato Kozakou Marcoullis.The results of the second season of underwater exploration of the largest wreck of an ancient cargo ship ever found in Cypriot waters, located about 3 km off Mazotos-Moroni in southern Cyprus, were announced by the Department of Antiquities on 21 December. Directed by Dr Stella Demesticha of the University of Cyprus, the work cast further light on seafaring in ancient times. The wreck is of a merchant ship of the Hellenistic period which sunk in about 350 BC carrying hundreds of jars (amphora) of wine, possibly en route from Chios to Cyprus.The unique Cypriot practice of “tsiattista” improvised singing or oral poetry, often referred to as “poetic duelling”, has been placed on UNESCO’s Intangible Cultural

Heritage of Humanity list. UNESCO said that “the lively impromptu oral poetry known as tsiattista is often performed to the accompaniment of violins or lutes in ‘jousts’, in which one poet-singer attempts to outdo another with clever verses made up of rhyming couplets”. It has long been a popular component of wedding feasts, fairs and other public celebrations in Cyprus.The advance of Cyprus’ tourism industry in the high season of 2011 continued in the latter months of the year, so that tourism was set to provide over 10 per cent of Cyprus’ direct GDP in 2011 compared with 9 per cent in 2010. Tourist arrivals in January-November totalled 2,326,889, an increase of 10.2 per cent over the same period in 2010, whilst revenue from tourism in the 10-month period January-October increased by 13.6 per cent to €1,643 million. The Council of Ministers on 20 December agreed that the state-owned Cyprus Stock Exchange (CSE) should be transformed into a company as a first step towards privatisation. The sell-off would end the current state of affairs in which the CSE is the only state-controlled bourse in Europe. Finance Minister Kikis Kazamias explained that on its establishment in 1996 the CSE was made a state-owned agency because of the absence of a regulatory framework, whereas “today we have a supervising authority which performs its duties in an exemplary manner”.

CYPRUS NEWS - BRUSSELS EDITION is produced monthly by the Press Office of the Permanent Representation of Cyprus to the EU. To receive a regular copy by e-mail, please contact: The Press Office of the Permanent Representation of Cyprus to the EU, 61 Avenue Cortenbergh, 1000 Brussels, Belgium, Tel: 02 7398201, Fax: 02 7366573, email: pressofficebrussels@mfa.gov.cy

Links Cyprus Government: www.cyprus.gov.cy Ministry of Foreign Affairs: www.mfa.gov.cy Permanent Representative of Cyprus to the EU: www.mfa.gov.cy/permrepeu