NICOSIA (Reuters) – Cyprus said yesterday it would use income saved as a result of demilitarization for the economic development of a united island and urged Turkey to pledge to do the same. In an address to the London School of Economics, Cypriot Finance Minister Takis Clerides said that reunification would create opportunities for the acceleration of economic growth on both sides of the divided island. Greek- and Turkish-Cypriot leaders are urgently discussing a United Nations plan for ending the 32-year division of Cyprus between an internationally recognized south and a Turkish-controlled north. «The government of Cyprus has officially committed itself to allocate the peace dividend of an eventual solution of the Cyprus problem – that is, the savings accruing from the eventual elimination of defense spending – toward supporting the development effort after a solution of the Cyprus problem,» the minister said. «I believe Turkey could and should make a similar commitment,» he added according to a text of his speech in London issued in Nicosia. Clerides said the planned reconstruction alone of the ghost town of Famagusta, earmarked for return to the Greek Cypriots under ongoing UN-led talks, would involve an investment of at least 1 billion pounds ($1.85 billion). Cyprus is slated to become a member of the bloc in May 2004 and international mediators are scrambling to have an agreement in hand so that a united island can sign the accession treaty in April this year. Clerides said that while a donor conference was a first step in the right direction, «clearly, the financing needs in the event of a solution are much higher.» The EU has promised financial support of 206 million euros in case a solution to the Cyprus problem emerges, and further packages for the Turkish Cypriots, whose economy trails that of the affluent south where per capita income, based on purchasing power parity, stands at 75 percent of the EU average. Clerides said the introduction of the euro in Cyprus, anticipated for May 1, 2006, is expected to reduce transaction costs and improve transparency.