Cyprus

Lord Sharkey Excerpts

Tuesday 15th July 2014 Lords Chamber

[Lord Sharkey (LD)]

My Lords, it is a pleasure to follow the noble Lord, Lord Harrison. Like him, I congratulate my noble friend Lord Northbrook on securing the debate and on his wide-ranging opening speech. It was so wide-ranging that I will not take advantage of the extra time available. I declare an interest as chair of the All-Party Group for the Turkish Republic of Northern Cyprus.

As both previous speakers have said, negotiations for reunification have been going on for more than 40 years. For many of those years nothing much seemed to happen. When it did happen, as with the Annan plan, it did not work. The latest round of negotiations is probably the best chance—perhaps the last chance—of any kind of success. The hydrocarbon discoveries, the financial crash of 2007-08 and the dramatic increase in unrest in the eastern Mediterranean are all new factors pointing towards the desirability of a settlement. However, as usual, there are conflicting views about the progress being made in the negotiations.

In particular, many commentators point out the need for a UN special representative to replace Alexander Downer. I understand that the former UN Under-Secretary-General Lynn Pascoe is the person favoured by Ban Ki-moon. Mr Pascoe was previously US ambassador to Malaysia and to Indonesia; he was the US special negotiator for Nagorno-Karabakh and served five years in the UN Department of Political Affairs, where he was actively involved in the Cyprus problem. Yet I understand that his appointment is meeting resistance from the Greek Cypriots. Can the Minister bring us up to date on this issue when she replies?

It seems the case that heavyweight input is needed pretty quickly. The Turkish Cypriot negotiator, Dr Kudret Özersay, submitted a five-step roadmap for future negotiations to the leaders meeting of 7 July. This meeting was supposed to make progress on confidence-building measures, but it did not. At a negotiators meeting two days later, it was agreed to try again at a meeting taking place tomorrow and again at the next leaders’ meeting, which takes place this coming Friday. It is possible to be pessimistic about all this, but I think it is better read as grounds for cautious—perhaps very cautious—optimism. For example, it seems clear that both sides understand the need for urgent progress. It would help if Mr Pascoe, or some other UN nominee, could take a role in all of this as soon as possible.

The need for urgent settlement arises from several factors. At the moment there is a window of political stability on the island, which will last only until the end of the next round of major elections, which are not very far away. There is also the growing complexity surrounding hydrocarbon exploitation. Amos Hochstein, of the US State Department, said last week that these newly discovered energy resources have changed the rules of the game in the region. That is undoubtedly the case. For example, the Chinese National Offshore Oil Corporation is now in talks to buy 30% to 40% of the Aphrodite gas field in Cyprus’s block 12.

A further factor driving the need for an urgent solution is, of course, the increasingly chaotic, unstable and violent situation in the eastern Mediterranean as a whole. The benefits of a successful reunion have already been rehearsed to some extent by previous speakers and outside the Chamber. Reunification brings the prospect of very significant economic growth. The UN estimates an additional three percentage points to GDP as a result of reunification. There are then the proceeds of the offshore hydrocarbons, which are likely to be significant if reunification takes place, and are quite likely to be zero if it does not. Then there is inward investment, or the prospect of inward investment. The north of the island has been deprived of capital for 40 years, and it is still cut off from the international banking system. Development of the north and reconnection of the north to the world outside will bring increased prosperity to all parts of the island.

Finally, there is the question of stability, which is a necessary precondition for investment—naturally—but is also a vital requirement in such an unstable region. Stability is in the direct interest not only of the Cypriot peoples but of NATO, the region and the West. I know that Her Majesty’s Government have been very active in support of negotiations for reunification, and I congratulate the FCO on that. The UK has a moral and a legal obligation to help, and I am very glad that it is helping. However, our help will be needed for many years after reunification and I shall be very glad to hear the noble Baroness commit to that when she speaks.