Bloomberg News

EU’s Rehn Urges Renewed Push for Cyprus Unity to Help Recovery

May 08, 2013

The European Union’s economy chief weighed into the political dispute over the four-decade division of Cyprus, saying unification would help the Mediterranean island emerge from a rescue program.

“The re-unification of the island would give a major boost to the economic and social development of Cyprus,” EU Economic and Monetary Affairs Commissioner Olli Rehn told a European Parliament committee today in Brussels. “Now it is indeed high time to revitalize the process leading toward the re-unification of Cyprus.”

Cyprus has been divided between Greek-speaking and Turkish- speaking regions since Turkey invaded the north of the island in 1974 following a coup by Greek-Cypriot supporters of union with Greece. Cyprus joined the EU in 2004 after Greek-speaking voters rejected a unification plan in a referendum, causing the European bloc to import a border dispute that involves United- Nations peacekeepers. Turkey still has troops in northern Cyprus, whose rulers aren’t recognized internationally.

Cyprus in March became the fifth euro-area country to seal an international rescue agreement after reworking a 10 billion- euro ($13 billion) package that provoked controversy because it would have imposed a levy on all domestic bank accounts. The levy, subsequently limited to accounts above the insured limit of 100,000 euros, is part of revenue-raising steps that the Cypriot government must take to unlock the aid from the euro area and the International Monetary Fund.

Banking Sector

Rehn said Cyprus has been slow to tackle macro-economic imbalances, particularly in the banking sector. Noting that he was EU enlargement chief between late 2004 and early 2010, Rehn also said inadequate progress has been made on unifying the island.

“I worked very hard for five years as commissioner for enlargement to facilitate the re-unification of Cyprus,” he said. “I regret that there has been no decisive progress.”

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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