NEWS

Nicosia balks at cost of peace

NICOSIA (AFP) – Greek Cypriots fear their strong economy could sink beneath the weight of property compensation claims, which they say are an excessive price to pay for reunification under a United Nations plan. Analysts told AFP that a UN-brokered Cyprus settlement entails crippling financial burdens in the name of political compromise, which would undermine any lasting peace. Greek Cypriots object to having to compensate themselves for being denied access to their properties in the Turkish-held north since 1974. Under UN Secretary-General Kofi Annan’s plan, the newly created Greek and Turkish constituent states are obliged to compensate their own communities for loss of property. «The Annan Plan provides for compensation by the Cypriot government for loss of usage. It’s extremely unethical for people to pay for damages made by a perpetrator,» said Pambos Papageorgiou, head of socio-economic research at Cyprus College. «At current market values, compensation would amount to billions. Greek Cypriots couldn’t find this money even if they wanted to.» The compensation bill, via the issuance of bonds, is estimated at 10 billion Cyprus pounds (17 billion euros), double Cyprus’s GDP, with annual interest of 400 million pounds. Opinion polls suggest that the uncertainty over costs, as well as security, has turned Greek Cypriots against the UN blueprint. Cyprus is the wealthiest among the 10 new EU member states, with a per capita income of 18,000 euros. «The worst elements in the plan are obstacles to free functioning of the market, lack of a well-defined fiscal structure and unworkable provisions for compensation,» said Cyprus University Economics Professor Panos Pashardes. «What point is there in unifying the island if we restrict market freedoms?»