It was a bit like a fairy tale. Until just recently, Turkish-Cypriot leader Rauf Denktash was demanding recognition of his pseudo-state and a confederation in Cyprus, while Turkish Prime Minister Bulent Ecevit was threatening to annex the Turkish-occupied northern section of the island republic if Cyprus’s accession to the European Union went ahead. Then suddenly, everything changed. It was admittedly an impressive tactical change that had a positive political outcome. Denktash is no longer the bad guy, as US State Department coordinator for the Cyprus issue Tom Weston hastened to recognize. And that is not the only thing the Turkish Cypriots had to gain. In the announcement of direct talks, to begin on January 15, there is no reference to the US resolutions, the Greek side’s most important political weapon. This was no simple oversight, as it means that each side has the right to raise any issue. In practice, it means that Denktash will have the right to ask for two separate states. However, there is no doubt that the new tactics have, to a certain extent, meant a loss of face for the Turkish Cypriots. The decision was taken in Ankara in the wake of open dissent from a sector of the establishment over the prevailing intransigence, which was seen as an obstacle to Turkey’s future in Europe and involving considerable cost on the diplomatic front. This sector felt trapped by the Ecevit-Denktash tactic of trying to threaten the Europeans that Cyprus’s entry into the EU without a resolution of the problem would lead to undesirable political complications. The EU has undertaken a commitment to bring Cyprus into the fold, but it does not want to inherit the Cyprus problem. It warned Ankara that if it continued to take a negative stand, Cyprus’s EU accession would go ahead. This meant that if the Turks did annex the occupied territory, it would destroy their relations with the EU. Even if the Turks didn’t proceed with their threat, the Turkish Cypriots would still be at a disadvantage in their negotiations with the Greek Cypriots. Recently, European pressure has been directed at the Turks, since it is they who have created the stalemate. Ankara changed tactics once it realized that its negative stance was only making Cyprus’s EU accession easier rather than more difficult. However, Turkey’s positions on the Cyprus issue have not changed at all, as is evident from the contents of a two-page text that Denktash tried to give Clerides (published in the Turkish Daily News), and from his letter to the UN secretary-general Kofi Annan, in view of this summit meeting. Another indication of Denktash’s reservations is the fact that during his talks with Clerides, he asked the UN secretary-general’s adviser on Cyprus not to send his report to the Security Council before it was approved by both sides. When this request was denied, the Turkish-Cypriot leader took two tape recorders out of his pocket, forcing Clerides to bring out one of his own. In the end, the tape recorders were withdrawn, but Denktash emphasized that he would walk out of the talks if the UN raised a certain draft solution for discussion. Moreover, Denktash also said, behind closed doors, that Turkey meant what it said and that if the negotiations did not lead to a solution, the likelihood of a war that would also involve Greece, was not so far off. Nevertheless, there is no doubt that there has been a flurry of diplomatic activity since last Tuesday’s meeting and Wednesday’s dinner. According to reliable sources, everything had been agreed some days beforehand and was stage-managed in such as way as to foster that activity. Reliable sources claim that Washington and London, who are the ones cracking the whip, want an interim agreement by June 2002 that will include the following: – Recognition of the Turkish-Cypriot entity within the framework of a future bizonal/bicommunal federation. – A statement that will indirectly yet clearly satisfy the Turkish demand that the federated state will not be an extension of the Cypriot Republic but a new state co-founded by the two communities. – A separation of internal sovereignty although not that of external sovereignty. In practice, this means that each side will have absolute sovereignty in its own territory regarding domestic issues (the confederate model) but there will be a single state on the international front (federal model). – The immediate reopening of Nicosia airport and the port of Famagusta, to be used by both sides, meaning a lifting of the existing embargo on the export of Turkish-Cypriot products. – Funds for the construction of joint infrastructure works. – Incentives for joint ventures. However, important issues such as a detailed description of powers, and above all security arrangements, are to be left for a later stage. Crucial issues still to be overcome Reliable sources claim that the final agreement, which will have the validity of a constitution, is scheduled to be put to a referendum at the same time as the EU accession act. But another crucial issue has to be dealt with before then. Once the interim agreement is signed, Denktash will demand a resumption of the EU accession negotiations, claiming that as a party to the agreement he cannot accept what has been decided up until now with the Greek Cypriots. He is already asking for a freeze on the entry talks as long as the intercommunal talks last. Given Denktash’s stance on this issue, it is clear that he could easily exploit the procedure of a parallel negotiation or at least a summary renegotiation with the EU in order to raise obstacles and even thwart the whole process. Nicosia and Athens are not unaware of this risk, but until now have not worked out a way to avert it. Another crucial issue is the content of an agreement and its compatibility with the acquis communautaire. In a speech to the Cypriot House of Parliament, the president of the European Commission, Romano Prodi, said that the acquis communautaire would not be invoked as a way of reneging on what had been agreed upon. What is important is that a solution to the Cyprus issue should not obstruct Cyprus’s relationship, as a new member, with Brussels. Prodi has made it clear that the EU will not try to impose the acquis communautaire in relations between the two federated entities, nor would it interfere in issues of security (including the status of the British bases, guarantees, the presence of Greek and Turkish forces). It is precisely because of these issues, however, that the Greek Cypriots want to join the EU. Denktash is demanding a comprehensive exchange of populations and properties and a ban on the settlement of refugees in the Turkish-Cypriot area for 18 years. During negotiations for the package worked out by (former UN Secretary-General Boutros Boutros) Ghali, the then Cypriot president, George Vassiliou, had accepted a transitional period of 10 years. All these issues are being seriously discussed even as the EU keeps knocking down internal barriers one by one. The Turkish side may have been forced to come down a peg or two, but it is clear that after having backed down, Western pressure will now be on the Greek-Cypriot side. When negotiations begin, Nicosia will be confronted with the dilemma of making painful agreements if it wants to join the EU. The truth is that there is no avoiding this political ordeal. The Greek side as a whole has to exhaust all its diplomatic resources in order to emerge unscathed from the process. According to reliable sources, the Democratic Rally (DHSY) and Communist (AKEL) parties are considering the possibility of extending Clerides’s presidential term of office by an act of Parliament so that he may complete the negotiations. His term ends in February 2003, but the presidential campaign usually begins about a year beforehand, with the usual repercussions on the country’s political life. This appears to ring true now more than ever, as Sharon, in the name of security, stands ready to invade and retake the remaining Palestinian territories.