In mid-November, Mario Nava, head of the Directorate-General for Structural Reform Support, was in Cyprus. The European official had the opportunity to see for himself the situation that prevails in our country, to evaluate the efforts being made to implement the recommendations of the Directorate-General and to meet with representatives of the two communities.
In his interview with Phileleftheros, Mario Nava reiterated that the resolution of the Cyprus problem will prove to be a catalyst for even more durable economic development, stressing that as long as it remains unresolved it will be a factor of instability. He stood at the fact that the European Union and especially the Commission remain committed to helping efforts to find a solution and that they are closely monitoring the developments. “Our goal is to do everything we can to bring Cyprus closer to reunification within the framework of the UN,” he stressed.
At the same time, Mario Nava referred to the need for the Greek Cypriot and Turkish Cypriot communities to come closer and build a meaningful relationship of trust. This can be done, he said, with concrete measures such as boosting Green Line trade and with projects such as the bi-community solar power plant. As he pointed out in 2022 the value of goods traded through the green line reached 15 million euros which is the highest level ever achieved.
The European official also spoke about the reforms that Cyprus needs to make and which concern a wide range of issues. So far the EU has funded 85 projects on our island, of which around 25 are ongoing. “The Cypriot authorities are very committed to this, which satisfies me. Cyprus has an important role to play in achieving multiple European goals, including in the fields of energy autonomy, sustainable development and business development,” he stressed.
1) What was the main purpose of this trip and what are the deliverables?
Whenever I come to Cyprus, my agenda is two-fold. On the one hand, DG REFORM supports the Cyprus settlement process, and we implement the EU aid programme for the Turkish Cypriot community. On the other hand, DG REFORM implements the EU’s Technical Support Instrument (TSI), which helps EU Member States design and implement reforms in a wide range of policy areas by providing expertise. The support can take the form of strategic and legal advice, studies, training and expert visits on the ground and exchanges with other EU Member States.
Concerning the Cyprus issue, I have discussed the current situation and our major initiatives in Cyprus with the authorities of the Republic of Cyprus, but also with EU and other ambassadors, with the UN and many other stakeholders. I also spoke with the leader of the Turkish Cypriot community and with representatives of all political parties from the Greek and Turkish Cypriot communities. Our aim is to do everything we can to bring Cyprus closer to reunification within the UN framework.
The current Commission’s main confidence-building measures linked to the settlement of the Cyprus issue are to increase Green Line trade, including to ensure the successful implementation of the pan-Cypriot Halloumi/Hellim PDO scheme, and the project of setting up a bi-communal solar power plant. As we are moving closer to the European Parliament elections in June next year, we would also like to help increase the number of Turkish Cypriot voters in the elections to anchor them more in the EU.
As regards the Technical Support Instrument (TSI), the EU programme that helps EU Member States design and implement reforms in a wide range of policy areas, so far we have implemented 85 TSI-funded projects, of which around 25 are ongoing. The Republic of Cyprus’ authorities are very engaged, which I welcome.
The purpose of the trip in relation to the TSI was to meet with the Republic of Cyprus’ authorities and discuss in depth the reform priorities of the government. The Republic of Cyprus has an important role to play in the achievement of multiple European objectives, including in the areas of energy autonomy, sustainable development, and business growth. Meeting the Republic of Cyprus’ authorities also allowed us to take stock of the development of our ongoing technical support projects and ensure that the Republic of Cyprus authorities’ needs are being met.
2) In general, what are the main priorities of DG Reform these days vis-Ã -vis Cyprus? What are the specific challenges and how are you approaching these challenges in Cyprus and maybe in the EU in general (when it comes to your main portfolio items)?
When it comes to Cyprus’ reunification, I think we all must do better in demonstrating to ordinary Greek and Turkish Cypriots the benefits of reunification. Reunification would mean full EU membership for the Turkish Cypriots. EU legislation, which is currently suspended in the non-government-controlled areas, would be put into force in all of Cyprus, and the island would qualify for substantial EU funding to narrow economic disparities. There are many Turkish Cypriots who are pro-EU and pro-unification, but many are also drifting away. We need to reach out to them and show them through concrete actions that reunification is the way to go.
When it comes to supporting reforms in EU member states with the Technical Support Instrument, DG REFORM’s is there to help them implement their priorities. Today, a large part of these priorities is linked to the implementation of the Recovery and Resilience Facility, which contains a wide-reaching and ambitious reform agenda. The Republic of Cyprus is no exception.
The Republic of Cyprus Recovery and Resilience Plan focuses on the green and digital transitions. In the area of climate and environmental policies, the Republic of Cyprus faces the challenge of high greenhouse gas emissions, gaps in water and waste management, and the need to safeguard biodiversity and wildlife. Digital challenges are linked to connectivity, in particular the infrastructure for high-capacity electricity. Enhancing digital skills in all population groups and the digitalisation of its public administration, together with the strengthening of the public health system are additional challenging areas.
3) Let’s talk specifically structural reforms in CY. What are your recommendations and in which areas they need to take place? How can the Cypriot economy be strengthened? Which are Cyprus’s vulnerabilities?
Public administrations in all of Europe have been put under great pressure over the last years, due to the pandemic and the consequence of the war in Ukraine. Public administrations have been entrusted with new tasks while undergo major transformations in relation to the green and digital transition. Reforms of public administrations are one of the main areas where Member States request technical support to the Commission.
In the Republic of Cyprus, for instance, with regard to the efficiency of the public administration, we are currently helping improve the selection and promotion of civil servants and managers, through the improvement of selection criteria. We are also helping to strengthen the Cypriot education system by supporting the implementation of policies aimed to address school dropout. Another important area is the administration of revenues, in which we are currently helping the transition towards accrual accounting to upgrade the Cypriot Treasury in line with the European and global standards.
Energy continues to be a challenging area for many Member States. In Cyprus, we are supporting the authorities with the introduction of renewables, including through adapting the relevant legislation and permitting processes.
Strengthening the Cypriot economy is a multifaceted effort, with a focus on addressing vulnerabilities linked to Cyprus’ isolated geographical position. For instance, the penetration of Renewable Energy Sources in the Cypriot electricity sector is hindered by the fact that it is isolated, while the country’s capacity to benefit from the digital economy is limited by the Cypriot underdeveloped broadband network. DG REFORM has supported Cyprus in all those areas.
4) In which settlement-related projects in Cyprus the DG Reform is involved? May I mention the one–stop-shop and the inclusion of further products in the Green Line Regulation?
Last Monday [20 November], I officially opened the One Stop Shop at a highly attended event with the Cyprus Chamber of Commerce and Industry and the Turkish Cypriot Chamber of Commerce, both of which are partners in this initiative. Fifteen EU ambassadors attended, which shows the EU’s support for this initiative.
The One Stop Shop will advise businesses from both communities on how to do Green Line trade. It will give information on the correct procedures to be followed and the EU product standards, which Turkish Cypriot products must meet when placed on the EU market. The experts will build up a website with information in Greek, Turkish and English, bring producers and buyers together, and also do market research to identify products in demand. I would like to mention the email address so that your readers, should they include businesspeople interested in Green Line trade, can contact the One Stop Shop: [email protected].
Besides benefiting both Greek and Turkish communities from an economic point of view, Green Line trade is very important to pave the way to Cyprus’ reunification. It brings people together, builds confidence and could, if it becomes more significant, contribute to Cyprus’ economic reintegration. Last year, Green Line trade had a value of nearly 15 million Euro. This was the best result ever achieved, but is still modest and there is a lot of space for improvement.
You mentioned the inclusion of more products in Green Line trade: this currently concerns processed food of non-animal origin. We always encourage the authorities of the Republic of Cyprus to support Green Line trade by allowing more trade in such processed products and by helping quickly resolve questions from producers and traders about the documentation that proves compliance with EU standards. I visited a Turkish Cypriot company that is making very good craft beer. Beer is such a non-animal processed food, and so are table water, sodas, sorbets and frozen vegetables. EU experts are already visiting the production facilities to make sure that they comply with EU hygiene standards. Some companies could start trading tomorrow if their products were green-lighted by the authorities of the Republic of Cyprus. This would bring more choice to consumers in Cyprus and beyond, and strengthen the feeling of belonging to the EU.
5) What about Halloumi/Hellim?
Fifty-eight Greek Cypriot producers of Halloumi/Hellim and two Turkish Cypriot producers have been certified for PDO compliance, and a third Turkish Cypriot producer has applied and will soon be inspected. But to be clear: Turkish Cypriot Halloumi or Hellim, even if it is PDO-compliant, cannot yet be placed on the EU market. This requires compliance with EU food safety and animal health standards.
The Turkish Cypriot community has made remarkable efforts to comply with these standards, and I hope the Commission will be able to confirm full compliance next year. After that, Green Line trade of Turkish Cypriot Halloumi will be able to start. Currently, the Republic of Cyprus is exporting worldwide around EUR 350 million worth of Halloumi, which shows the size of the global market; and in the EU, only cheese from Cyprus can be called Halloumi or Hellim, which gives Cypriot producers an advantage.
This experience has demonstrated the importance of initiatives that bring economic benefits to Turkish Cypriots in return for compliance with EU standards. This brings them closer to the EU. In addition, such initiatives demonstrate to them very clearly the benefits of reunification and full EU membership.
6) What’s the update with Pyla, the photovoltaic park and similar projects?
The Commission has welcomed the Understanding that the UN has reached with the two communities, and we hope the activities in the Pyla/Pile area, which the UN has halted temporarily, can soon resume. It is important to resolve the tensions in the area by developing it to the benefit of both communities. The Greek Cypriots and Turkish Cypriots who live in the village of Pyla/Pile have proven that they can cooperate and live in peace with each other, and this is something to build on.
During my visit, I explained to the Mayor and the Turkish Cypriot local leader that the Aid Programme could support the inhabitants of Pyla/Pile should they be willing to develop a project that could offer new opportunities to the residents and decrease their isolation.
As regards the bi-communal solar power plant, the EU-funded pre-feasibility study is progressing well, and we expect it to be finalised in January. The study will list various technical options, including for the location, with their pro’s and con’s. After the pre-feasibility study is presented, it will be up to the Greek and Turkish Cypriot communities to decide on the exact parameters.
In this context, I would like to emphasise that the location of the bi-communal solar power plant has not been decided and won’t be decided by the experts conducting the study. This has frequently been reported incorrectly in the press. The experts are examining several possible locations from a technical, environmental and land ownership perspective. One of them is Pyla/Pile, but it is not the only one. The experts will present their findings, and then the two communities will decide.
7) You mentioned the European Parliament elections next year… ?
Only 5,800 Turkish Cypriots voted in the European Parliament elections in 2019, which was a very modest result. Turkish Cypriots are EU citizens and have the right and opportunity to make their voices heard, this will enfranchise them and increase their feeling of belonging to the EU. Our goal is to mobilise them to vote and, together with the authorities of the Republic of Cyprus, to make it administratively and logistically easy to vote. In this, we are working together with the Ministry of the Interior, the Liaison Office of the European Parliament and an EU-funded civil society organisation in the Turkish Cypriot community, which will run an awareness-raising campaign.
8) Is there anything else from your trip that you would like to mention?
When I come to Cyprus and also on this occasion, I have met beneficiaries of the aid programme, for example the Technical Committee on Cultural Heritage, which has just finished conservation works at the Arsenal Bastion in Famagusta. We had a very inspiring ceremony in Famagusta with children and their families from both communities. Cyprus has such a rich cultural history, which all its citizens should respect and be proud of. The committee is doing a very difficult, but also rewarding job, and I am always impressed by their dedication and perseverance.
I have also met several Turkish Cypriot companies that would like to trade across the Green Line, and also alumni of the scholarship programme for Turkish Cypriots who presented ideas for mostly bi-communal projects. For example, one group would like to bring architects from the two communities together, another one farmers, and yet another group would like to make beaches accessible for people with disabilities. I am very happy that they are taking this initiative, thus using the skills they acquired during their EU-funded university studies or internships in EU member states.
