Flag of Cyprus

Cyprus country brief

Introduction/Overview

Relations between Australia and the Republic of Cyprus are underpinned by strong people-to-people links. The strength of the relationship stems from the ties developed by Cypriot migration to Australia, common British institutional inheritances, joint membership of the Commonwealth and Australia's long standing support of United Nations efforts to find a just and permanent solution to the Cyprus dispute. Australia supports the sovereignty and territorial integrity of the Republic of Cyprus and recognises the Republic as the only legitimate authority on the island.

The Australian Government urges all parties to continue constructive efforts aimed at resolving the Cyprus dispute and has maintained a Special Representative for Cyprus since 1998. The present Special Representative, Ambassador to France, Ric Wells, was appointed in May 2011. As part of his role, the Special Representative undertakes international and domestic consultations in support of efforts to secure a lasting solution to the Cyprus dispute.

Australian police officers have served continually as part of the United Nations Peace-keeping Force in Cyprus (UNFICYP) since 1964, making a valuable contribution to the maintenance of peace and stability on the island. There are currently 15 Australian Federal Police officers serving with UNFICYP.

Australia also supports the Cyprus Academic Dialogue. Initiated by La Trobe University, it promotes dialogue and cooperation between Greek Cypriot and Turkish Cypriot academics and scholars affected by the Cyprus conflict. The first set of dialogues in July 2009 were followed, among other influential activities, events, presentations and engagements, by major conferences in July 2010, June 2011, May 2012 and April 2013 in Cyprus. There have also been successful roundtable events in Istanbul, Turkey in November 2011 and Limassol, Cyprus in July 2012. The group is now registered as a legal NGO.

Political overview

The government of the Republic of Cyprus comprises an executive President - who is directly elected for a five-year term - and a unicameral legislative arm, the House of Representatives. The current President, HE Mr Nicos Anastasiades (of the centre-right Democratic Rally Party - DISY), was elected in February 2013. The President appoints the Council of Ministers, who may not be members of the House of Representatives.

Cyprus’ unicameral House of Representatives consists of 80 members, elected by a form of proportional representation for a five year term. Fifty-six seats are occupied by Greek Cypriots, with the remaining 24 reserved for representatives of the Turkish Cypriot community (although not occupied since 1963). At the last parliamentary elections held in May 2011, DISY and AKEL (left-wing Party of the Progressive Working People, formerly known as the Communist Party) were confirmed as the dominant blocks, securing 20 and 19 seats respectively. DIKO (centre-right Democratic Party), suffered a slight loss securing 9 seats (they now have 8 seats following withdrawal from the party of one member who now sits as an independent). The Social Democrats (EDEK) held onto its 5 seats, the European Party (EVROKO) won 2 seats and the Ecologists and Environmentalists kept its seat. The next parliamentary elections are due in 2016.

The island of Cyprus entered the European Union (EU) on 1 May 2004 with the EU customary law (acquis communautaire) suspended in the northern part of the island, the area administered by the Turkish Cypriots. Cyprus held the rotating presidency of the European Union in the second half of 2012.

The Cyprus Dispute

The final period of British rule in Cyprus saw a bitter deterioration in relations between the Greek Cypriot and Turkish Cypriot communities. In 1960 the Republic of Cyprus became independent under a Constitution which provided for a power sharing arrangement between Greek Cypriots and Turkish Cypriots. Britain, Greece and Turkey became the guarantors of Cyprus' independence and territorial integrity. Friction between Greek Cypriots and Turkish Cypriots intensified in 1963 after President Makarios sought to amend the Constitution. This was viewed by the Turkish Cypriots as an attempt to destroy their guaranteed community rights and they withdrew from the government. Inter-communal fighting broke out and most of the Turkish Cypriot population withdrew to a small number of armed and segregated enclaves. An uneasy truce was maintained by the establishment in April 1964 of a UN Peacekeeping Force in Cyprus (UNFICYP) which included the first Australian police contingent.

The succeeding years saw little decrease in tensions. A coup against President Makarios on 15 July 1974 organised by the Greek military junta, aimed at uniting Cyprus with Greece, was the trigger for Turkish troops landing in Cyprus and eventually occupying the northern part of the island (37 per cent). This was accompanied by a large population movement, with around 160,000 Greek Cypriots moving south and 50,000 Turkish Cypriots moving north. The island has remained divided ever since. In 1975 Turkish Cypriot authorities unilaterally declared the area to the north the 'Turkish Federated State of Cyprus.' This was renamed in November 1983 the 'Turkish Republic of Northern Cyprus (TRNC)'. No country other than Turkey recognises the 'TRNC'.

The United Nations has made extensive efforts over the intervening years to negotiate the reunification of the island. The election of President Anastasides provides an important opportunity for fresh perspectives and new energy to find a just and lasting solution to the question of Cyprus. Conducted under the auspices of the UN Special Adviser for Cyprus, Alexander Downer, the negotiations aim to find a mutually acceptable solution with the agreed objective of establishing, in accordance with the relevant United Nations Security Council resolutions, a bi-zonal bi-communal federation with political equality and a single international personality, which would safeguard the fundamental and legitimate rights and interests of both communities.

Economic overview

The Republic of Cyprus has a population of just over 860,000 and there are estimates that the population in the 'TRNC' is just over 300,000. Cyprus’ estimated GDP for 2012 was US$22.4 billion and GDP per capita US$25,629.. The European Union is Cyprus’ principal export destination and import source.

Cyprus adopted the Euro on 1 January 2008. After the 2009 recession and the slow turnaround in 2010, the government’s economic focus has centered on a serious crisis in the Cypriot financial sector and on consolidating the country’s fiscal position. The assistance program agreed by Cyprus with the European Stability Mechanism and the International Monetary Fund (IMF) ensured Cyprus remained in the Eurozone. According to the agreement, the IMF would contribute €1 billion, Eurozone partners €9 billion and Cyprus €13 billion. The banking sector would undergo a significant restructuring. Cyprus also agreed to cuts and savings worth 4.5 per cent of annual economic output by 2018, on top of cuts worth 5 per cent of GDP through to 2015. Promoting growth and employment while restoring sound public finances present long-term challenges for the government.

Bilateral relationship

On 28-30 October 2011, Cyprus Minister of Foreign Affairs, Dr Erato Kozakou-Marcoullis represented the President of Cyprus at the Commonwealth Heads of Government Meeting held in Perth. In May 2011, then Cypriot President, HE Mr Demetris Christofias visited Australia as Guest of Government. He had previously visited Australia in March 2005 in his role as Speaker of the House of Representatives at the invitation of the Australian Parliament Presiding Officers. HE Mr Yiannakis Omirou, President of the House of Representatives led a Parliamentary delegation to Australia in February 2012. Then Cypriot Minister of Foreign Affairs, HE Mr Markos Kyprianou, visited Australia in March 2009. The former Minister for Education and Culture, the late Mr Pefkios Georgiades, led the Cyprus delegation to the Melbourne Commonwealth Games in March 2006.

On 31 May – 2 June 2012, the Governor-General, HE Ms Quentin Bryce AC, visited Cyprus reciprocating the visit of Cypriot President Christofias to Australia twelve months earlier. The visit elevated an already warm bilateral relationship to a greater level of engagement and profile. Then Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Cyprus in October 2008. The Hon Peter Slipper, Speaker of the House of Representatives visited in July 2012, as did The Hon Anthony Albanese, Minister for Infrastructure and Transport. Mr Harry Jenkins MP visited Cyprus on 14-17 October 2012. The Hon Mike Rann MP, then Premier of South Australia, visited in May 2007 and a parliamentary delegation led by Senator George Brandis visited in July 2006.

The Cypriot community in Australia is the second largest outside Cyprus after the United Kingdom. The 2011 Census recorded 18,073 Cyprus-born people in Australia, concentrated predominantly in Victoria and NSW. Greek Cypriots migrated to Australia in three waves: during the nineteenth century gold rushes; between 1924 and 1964; and after the 1974 Turkish intervention. Turkish Cypriot migration to Australia began in the mid-twentieth century.

Bilateral economic and trade relationship

Trade between Australia and Cyprus is small, due to a combination of distance, lack of direct freight linkages, and the small size of the Cypriot market. Cyprus' accession to the EU also resulted in loss of markets for lamb and beef. However, Australia has successfully established a foothold in such niche markets as wine, processed foodstuffs and pharmaceuticals.

In 2011-12, the value of total merchandise trade was approximately $20 million. Australia’s bilateral trade in services with Cyprus is negligible. In recent years, our largest export items have been plastic articles, meat (excluding beef), and coke and semi-coke. Major Cypriot exports to Australia are cheese and curds, medicaments, and pumps. Bilateral investment is also small.

Northern Cyprus

In 1983, the Turkish Cypriots declared an independent "Turkish Republic of Northern Cyprus" ("TRNC"). Australia does not recognize the "TRNC," nor does any country other than Turkey. The 'Turkish Republic of Northern Cyprus' has a mixed presidential/parliamentary system with political power shared between the 'President' and 'Prime Minister'. The 'President' is elected for a five-year term and has the power to propose legislation or return it to the 50-seat 'National Assembly'. At elections on 18 April 2010 Mr Dervis Eroglu ('Prime Minister' since April 2009) was elected 'TRNC' 'President' with just over 50 per cent of the vote. He was inaugurated on 23 April.

At the 'TRNC parliamentary elections' held in July 2013, the Republican Turkish Party (CTP) won 21 seats, the National Unity Party 14 seats, the Democratic Party (DP) 12 seats and the Communal Democratic party 3 seats. On 2 September, Őzkan Yorgancioglu – the President of the CTP, was sworn in as the tenth ‘prime minister’ leading a coalition between the leftist CTP and the centrist DP. The next ‘general election’ is scheduled for April 2018.

Economic growth in northern Cyprus tends to be volatile, given its relative isolation, over-large public sector, reliance on the Turkish Lira, and small market size. Agriculture and services together employ more than half of the work force. Per capita incomes in the north are, on average, 50 per cent less than those in the south. This gap is narrowing fast, due to economic growth in the Turkish Cypriot community and the economic crisis in the Greek Cypriot community. GNP in the 'TRNC' is estimated to be around US$1.5bn due to stringent policing of restrictions on its external economic activity.

The 'TRNC' is heavily dependent on Turkey for credits, grants and trade, and to fund a range of subsidies that are needed as a result of external sanctions. Reliance on the Turkish Lira also means there is no effective local control over monetary policy. Exports are thin, and likely to remain so due to limited direct trade with the EU and other markets. As well as fiscal transfers from Turkey, the economy has been sustained by real estate and construction, tertiary education services, tourism, gambling and related services. The local authorities see tourism development as a major hope, but the lack of direct air-links to potential markets is a major constraint and tourist numbers are quite low. Over the past several years, private sector economic activity was in decline with small-scale construction at a virtual stand-still due to legal developments regarding Greek Cypriot property and land. The imposition of stringent austerity measures on grant funding by the Turkish government has been vehemently opposed by a number of union and community groups.

Updated September 2013