The Orams decision and North Cyprus economy
Posted on 2009-09-10 00:24:21What does the Orams decision really mean for North Cyprus property market?
Before uncorking the champagne bottle to celebrate or going into despair as to real estate prices etc, one should take a realistic step back and ask: What exactly has been won? And what comes next?
The ECJ decision is simply unenforceable. By its own choice, the EU’s own acqui communataire is suspended and inoperative in north Cyprus. And the Turkish side is in no mood to implement a decision from a Europe perceived to be increasingly pro-Greek. Of course, the decision will have indirect side-effects, primarily psychological, possibly damaging the confidence level of the Talat-Christofias talks. What about its economic impact? Here, no more than a marginal effect should be expected. Maybe in the short run, some EU citizens owning real estate in the north will panic and sell out, and likewise potential investors may be discouraged. However, for every discouraged seller wishing to jump ship, there are probably ten potential Turkish opportunists ready to seize a buying option. If need be, owners may hide their ownership and carry on as before.
Within a reasonable time, the real estate market in northern Cyprus will adjust as markets always do. In the longer term, the property market will be more Turkified, with Turkish citizens replacing EU citizens forced to dispossession. However, the Greek Cypriot owners prior to 1974 are now further away from restoration or compensation as envisaged under the Annan Plan. How so, one might ask? History is a useful guide. In 1994, the ECJ put an export ban on Turkish Cypriot trade destined for the EU market. And what was the impact? Immediately and surely, the ECJ ruling caused a trade diversion from Europe to Turkey. Prior to this ruling, about 65% to 75% of Turkish Cypriot foreign trade was with EU countries; now, it is with Turkey.
The Orams decision can be no different. A legal ruling is no substitute for political decision-making. The Greek Cypriot legal team may have won a legal battle, but without a comprehensive political settlement of the Cyprus Problem, it will be frustrated by the new political realities on the ground in the island. The painful fact is that Cyprus is now a bitterly divided country. EU membership has not changed that fact. Nor can a European court alter it. Only acceptable results at the negotiating table can do that. The EU was supposed to act as a “catalyst” in the promotion of a settlement in Cyprus. To date it has failed miserably in this act. The EU is no longer perceived as a “level playing field.”
For the average Turkish person, in north Cyprus or Turkey, Europe is practicing double standards. It is heaping rewards on the Greek side while demanding a long list of concessions from the Turkish side. Brussels acts as if its own pledges can be broken (for example, to end the isolation of Turkish Cypriots in return for a Yes vote in the 2004 referendum), while making demands on Ankara on behalf of Greek Cypriots as well as the Kurds, Greeks and Armenians.
In the end, it boils down to this: the Greek Cypriots have to decide what to do about the status quo in Cyprus. Whether they wish to seek a political solution at home or a legal remedy abroad? The inescapable conclusion is that to recover territory lost in 1974 requires some sort of Land for Sovereignty swap as in the Annan Plan.
So....draw your own conclusions.....