Cypriot Elections: what impact on EU’s relations with Turkey and Russia’s influence?

Yesterday, the Cypriot citizens living in the southern part of the island cast their vote to elect the House of Representatives, the legislative institution of Cypriot political system. The two larger parties, the centre right wing Democratic Rally (DISY-EPP) and the far left wing Progressive Party of Working People (AKEL-GUE-NGL) saw their share of votes declining, whereas smaller anti-establishment parties gained more votes (and seats). The strong opposition of those new parties to the current efforts of the President Anastasiades in the negotiations for a settlement with Northern Cyprus (currently under Turkish control) will put additional pressure on the government in Nicosia.

This is why, despite the little coverage in the international media, these results in Cyprus are more important than ever for the European Union as a whole, as they might further complicate EU-Turkey relations and, in fact, the chances of Turkey getting closer to EU accession. Additionally, the new Parliament of the small island in the Mediterranean (the closest EU territory to the war in Syria) will draw the lines of its future policy with regard to the EU-requested budgetary discipline and the influence of Russia in the area.

Relations with Turkey and austerity policies are under pressure

Although the powerful President of the country, which chairs the government, is directly elected every 5 years, the House of Representatives, as the legislative institution, has an important role in defining Cypriot policies. Notably, the government of current President Nikos Anastasiades is backed only by the centre-right wing Democratic Rally (DISY – EPP), and as such, cannot count on a majority in the Parliament. In fact, previous government partners, namely the nationalist Democratic Party (DIKO – S&D) and the right-wing European Party, withdrew their support because of their opposition to a bi-zonal federal solution for the political reunification of the island. As DISY lost two seats yesterday, now only 18 MPs out of 56 are backing the government.

Although the country is often seen as a small player in the European Council, the electoral result will impact on the broader development of solutions to the two main crises dogging the European Union: the refugee’s and the Eurozone crisis. In particular, both the improvement of the relations between Turkey and the EU and the cooperation on the refugee’s crisis depend on whether a solution to Cyprus problem will be found.

The controversy linked to the partition of the island in two parts is the main obstacle for Turkey’s accession to the EU, as well as the adoption of other Turkey-related policies, such as an extension of EU-Turkey Customs Union or the lifting of visa for Turkish nationals. Yesterday, the parties advocating for a tougher stance on the negotiations with Turkey made inroads to the detriment of parties more favourable to find a compromise. In fact, the two parties backing Anastasiades’s negotiating approach lost almost 11% of votes and 5 seats in the Parliament.

Additionally, few years ago, the country hit the headlines for a huge banking crisis and the consequent difficult negotiations for a bailout from the EU and the IMF. As in the case of Greece, in order to receive a 10 billion euros bailout, Cypriot policymakers had to accept a memorandum from the so-called Troika (European Commission, European Central Bank and the International Monetary Fund). Since then, Anastasiades’s government pushed through the assembly a series of structural reforms, as well as budgetary cuts.

Although Cyprus officially exited the memorandum in March 2016, its national debt is still one of the highest in the EU (about 108% of the GDP). However, the already narrow majority in favour of budgetary discipline in the House of Representatives (previously around 29 vs 27 MPs) is now challenged by the gains made by new anti-austerity movements, such as Citizens Alliance, but also the Green Party and the National People’s Front.

In fact, the effort, by the two largest parties, to keep the smaller parties out of the Parliament by increasing in the minimum threshold needed for gaining seats in the Parliament (from 1.8% to 3.6%) backfired.  8 parties are going to be represented in the next Parliamentary term, up from the 6 of the 2011 legislative elections. As the electoral law is proportional, the government will not be able to pass its proposals though the assembly without the support of at least two other parties, however most of the parties represented are strongly opposed to budgetary discipline and cuts to public spending.

Final Infographics

New anti-establishment parties challenge the reconciliation with the Turkish community

At the moment, there is much optimism across political experts on the possibility of finding an agreement on the future political outlook of the island, which will also have to be approved with a referendum by both Turkish and Greek Cypriots. In fact, both Anastasiades and the President of Northern Cyprus Mustafa Akıncı are willing to reach a comprehensive solution. Also the main opposition party, the far-left Progressive Party of Working People (GUE-NGL), backs a bi-zonal federation.

However, already in 2004, a similar solution (the Annan Plan) was massively rejected by a majority of Greek Cypriots (76%), whereas the proposal was welcomed by the Turkish community of the island. At the time, Anastasiades backed a favourable vote in the referendum, whereas the former President Tassos Papadopoulos called for its rejection.

Apart from the two largest parties, all the other parties are critical on the way the deal is being negotiated on the Greek Cypriot side. The centrist Democratic Party (DIKO- S&D), led by Tassos Papadopoulos’s son, is particularly vocal on the issue and withdrew its support for the government already in February 2014. Also the Movement for Social Democracy (EDEK- S&D) and the Green Party oppose the peace talks.

Most importantly, two new parties, which both obtained three seats yesterday, are strongly against such a compromise between the two communities.

The Solidarity Movement (ECR) was recently founded by the former Anastasiades’s rival in Democratic Rally, MEP Eleni Theocarous, who also left the EPP group in the EP for joining the Conservative ECR. Some nationalist parties already merged into the new movement, such as the European Party, which recently withdrew its support for the current government because of disagreements over the management of the negotiations with Turkey. Quite remarkably, also the European Party was a splinter of Democratic Rally (EPP), as it was founded in 2005 by those members opposing the Annan Plan.

Also the populist left-wing Citizens’ Alliance obtained a good result for its first participation in legislative elections. The party already gathered more than 6% of the votes in the last European elections, although it fell short of gaining any seat. The party is linked to the personality of its leader Giorgios Lillikas, former foreign minister and presidential candidate. Former member of AKEL (GUE-NGL), Lillikas dismisses a bi-zonal federalist solution to Cyprus’s problem. In fact, the party is close to EDEK and the other centrist parties in calling for a hard-line approach to the negotiations with Turkey.

Government’s position on EU -Turkey relations might stiffen

The success of the small parties vis-à-vis the two largest parties will have a twofold impact on the relations with Turkey. First of all, yesterday’s elections were an indicator of the people’s sentiment over the negotiations for the reunification of the island. The strong performance of Citizens’ Alliance, the Solidarity Movement (ECR), the Greens and the National Popular Front casts a shadow over the current strategy employed by Anastasiades’s cabinet. A failure to find an agreement, or its rejection by the electorate with a referendum, would entail that Cyprus’s opposition to the opening of new chapters (in particular the frozen ones) on Turkish accession to the EU might even stiffen, thus derailing also the current EU’s strategy on refugees. Cypriot MEPs already claimed that the opening of 23 and 24 chapters (frozen by Cyprus) for the accession’s negotiation should be linked to a previous fulfilment of Turkey’s obligations under the negotiating framework (in particular in regards to the recognition of Cyprus). This is despite a majority of MEPs (56%) voting against such a requirement.

As a consequence of the electoral results, Cyprus’s position in current debate on Turkish violations of minorities’, dissidents’ and refugees’ rights might also further stiffen. Cypriot policymakers in Brussels have been already expressing their solidarity with the Kurds living in Turkey. In fact, Cypriot MEPs were united in calling for a stop of the undergoing crackdown by Turkish government on Kurds and other minorities. Unfortunately for them, only 18% of MEPs backed the initiative. Additionally, apart from the conservative MEP, all the other Cypriot MEPs supported the removal of the PKK (Kurdistan Workers’ Party) from the EU’s list of terrorist organisations, whereas a large majority of EU Parliamentarians (71%) voted against the proposal.

Only Democratic Rally supported the EU-Turkey Joint Plan on refugees

Although they were united in supporting Kurdish rights in Turkey, on other Turkey-related issues Cypriot MEP’s voted in different ways.

Not surprisingly, the most hostile party to Turkey is the recently founded Solidarity Movement (ECR): the conservative party was the only one to be outright opposed to the recognition of Turkey as an official language of the EU, the visa liberalisation process for Turkey and the negotiations for Turkish accession to the EU, even if all the requirements were met.

Their positioning is markedly different from the approach adopted by Democratic Rally (EPP), which was the only Cypriot party supporting an extension of the customs union between Turkey and the EU to new sectors. Also DISY was the only Cypriot party voting in favour of taking into account Turkish interests in the EU negotiations of trade agreements with third countries, in particular with the US.

More blurred the positions of the other three parties represented in the European institution. They did not support the abrupt suspension of negotiates with Turkey and interruption of the visa liberalisation scheme. However, the far-left and the two S&D parties (Democratic Party and EDEK) did not support the EU-Turkey joint plan on migration and the extension of the customs union to new sectors. AKEL (GUE-NGL) followed its group’s line in voting against the initiatives, whereas the S&D parties showed their dissent by abstaining instead of voting in favour as the rest of their group. At the end, a comfortable majority of MEPs welcomed the EU-Turkey joint plan (74%) and a broader customs union between the two territories (67%).

This shows, that even a party like AKEL (GUE-NGL), which is often labelled as moderate on the relations with Turkey, disagrees with the current EU’s drive towards more cooperation with Turkey on the migration’s crisis. In fact, the far-left party supports a bi-zonal and bi-community federation as a solution for Cyprus problem, but cannot accept the alleged violations of human rights entailed by the new agreement between the EU and Turkey.

Therefore, Democratic Rally (EPP) is the only party explicitly supporting the current EU comprehensive cooperation agenda with Turkey. For this reason, the relatively negative performance of the party at the latest election does not bode well for a positive outcome for the current EU-Turkey negotiations on refugees, visa liberalisation and opening of new chapters (also considering that further inroads in this regards would always be linked to the potential recognition of Cyprus by Turkey).

Anti-Austerity parties brace up for the Parliamentary battle

The success of many small anti-austerity parties struck another blow to austerity policies and scored another victory for parties supporting expansionary policies in the debt-ridden south of Europe (after Greece and Portugal).

In fact, the austerity measures adopted by the current government were one of the main leitmotivs of the electoral campaign.

DISY’s economic policy differs substantially from the previous management of the economic crisis by former AKEL President Dimitris Christofias, who hesitated to accept bailouts from the EU and implement the requested austerity measures. At the outset of the banking crisis, the former President preferred to ask the Russian government for financial help. Some people still deem AKEL (GUE-NGL) to be responsible for the economic crisis and this was also shown yesterday, as the far left party lost the most in terms of votes and seats.

However, Anastasiades’s government found difficult to convince the House of Representatives to back the measures requested by the Troika. In 2013 the assembly rejected a first proposal on imposing a levy on bank accounts in order to unlock a bailout from the European Stabilisation Fund and the IMF.

Only later, a tiny majority (29-27) of Cypriot policymakers endorsed a memorandum issued by the so-called Troika, entailing structural reforms, privatisations and debt consolidation, in order to receive a 10 billion euros bailout. After then, the government undertook a series of privatisations and budgetary cuts. However, the majority supporting such measures in the assembly has remained feeble, and only 29 (out of 56) MPs approved the budget for 2016. The parties supporting the measures in the national parliament were Democratic Rally (EPP), European Party and Democratic Party (S&D).

Instead, also in the EP, AKEL (GUE-NGL) is the most hostile to policies related to budgetary discipline and further economic integration in the Eurozone. The party even abstained on an amendment calling for the restoration of monetary sovereignty, whereas all the other Cypriot parties voted against (overall the amendment was rejected by 76% of MEPs). This is not surprising, as in the past the far-left party advocated for a Cypriot exit from the Eurozone.

Despite their opposition to austerity, S&D parties are more moderate than AKEL (GUE-NGL) on economic policy coordination and euro. In fact, both the Democratic Party and EDEK (S&D) defended the common currency. However, they still decided to abstain on further economic policy coordination and the possibility for the Central Bank to sanction banks in the context of its supervisory functions, whereas the majority of S&D group voted in favour.

The main cleavage on economic policy between Cypriot parties is shown by the votes on budgetary discipline and cutting red tape. Both Democratic Rally (EPP) and Solidarity Movement (ECR) supported budgetary discipline over public spending, as well as cutting red tape for companies and other stakeholders, whereas the other three parties represented in the EP voted against. However, at the national level the Democratic Party (S&D) adopted a more pragmatic approach, supporting the economic policies of the government, although lengthy negotiations between the two parties are often required.

With DISY losing two seats, and the new anti-austerity parties emboldened by the electoral result (also Citizens’ Alliance’s leader did not rule out an exit from the Eurozone in the past), Anastasiades’s cabinet will find even more difficult to gather support for its economic policy in the legislative institution.

Right-wing and left wing parties are divided on Russia

Russia has always been an important partner for Cyprus, as the two countries share a common cultural heritage. For this reason, Cypriot MEPs are on average far more supportive of closer relations with Russia than their European colleagues. However, voting records elaborated by VoteWatch Europe show that there is a difference between left-wing and right-wing parties in this regard.

Not surprisingly, AKEL’s MEPs have a strong pro-Russian record: they opposed the sanctions on Russia and they were the only Cypriot MEPs voting against a strong-worded report denouncing Russian violations of international law in Ukraine.

The Social Democrat EDEK is far more supportive of Russia than the other S&D Cypriot party, as it abstained on the critical report on Russia’s actions in Ukraine. Remarkably, EDEK was the only one in S&D which voted against a report welcoming EU Association Agreement with Georgia and denouncing Russia’s violations of Georgia’s territorial integrity. Instead, the Democratic Party (S&D) endorsed criticism of Russia actions in both Georgia and Ukraine. However, DIKO’s MEP voted against the sanctions on Russia, probably because of the economic impacts of the sanctions on Cypriot economy.

The two right-wing parties (Democratic Rally and Solidarity Movement) supported sanctions against Russia, criticism of Russia’s actions in Ukraine and the establishment of EU Association Agreement with Georgia. Therefore, the gains made by the Solidarity Movement partially compensate the losses of DISY, also considering the bad electoral result of the Pro-Russian AKEL. However, smaller parties such as the Citizen Alliance and the Green Party will try to put some pressure on the executive on Russia-related issues at the European level, such as the economic sanctions and the (currently frozen) conflict in Ukraine.

In this regard, also the strong performance of the extremist far-right National People’s Front (ELAM) (the Cypriot version of the Greek Golden Dawn) will strengthen the pro-Russian, anti-settlement (with North Cyprus) and anti-austerity front. Even though the opinion polls were not expecting the xenophobic party to reach the threshold, ELAM managed to capitalize on the increasing alienation of Cypriot electorate and allure disillusioned voters into supporting its program.