By Averof Neofytou
President of the Democratic Rally of Cyprus
Less than three years ago, Cyprus faced a decision not-too-dissimilar to the fateful dilemma facing Greece today – Having to choose between disorderly default and bankruptcy or accepting a painfully unpopular deal from the Troika of the Eurogroup, ECB and IMF. At first glance, it may appear to have been a no-win situation, the choice between a rock and a hard place.
In fact, in Cyprus’ case, the proposed economic settlement was not only restricted to tough austerity measures, extensive reforms to our public sector and changes to our financial institutions. Crucially, it also included a bail-in: All deposits above €100,000 in Cyprus’ second-largest bank were wiped off, while in our largest bank, all deposits above €100,000 incurred a 47.5% haircut, with the money converted into shares. Unsurprisingly, it was a tough deal for us to accept, one which was bound to hit all Cypriots hard. Austerity measures were certain to bite those in need, while the affluent would see their savings slashed. In short, we were forced to consider a much harsher deal than the proposal currently on the table for Greece.
But, ultimately, the newly elected President and the DISY government chose to bite the bullet and take the deal, as the only responsible step forward for our country. Against the backdrop of this difficult decision, DISY faced its first electoral challenge in the 2014 European Parliament Elections. In many ways, this was uncharted territory, given the enormous uncertainty surrounding the electorate’s feelings towards the European Union (EU), and indeed the government which decided to work with them and enter the deal.
What we discovered both surprised and amazed us. During the campaign, public opinion research conducted across the country revealed that rather than resent the EU, Cypriots felt a degree of gratitude towards Brussels and regarded the EU as being part of the solution rather than source of the problem. Incredibly, 59% of voters said that they wished to see even greater EU involvement in the country’s affairs.
This vote of confidence in the EU was reflected by the overwhelming support for the message “It is now Cyprus’ responsibility to regain Europe’s trust by proving that we have changed our ways and corrected our mistakes” – Overall, 34% and 26% of voters respectively, said that they agree and strongly agree with the statement. It would have been easy to assume that Cypriots and indeed Europeans as a whole view the EU as a body solely at the service of member states. In reality, it became clear that Cypriots at least view the relationship with the EU as a genuine partnership.
And so, during the European Parliament election campaign we did not shy away from our time-honored pro-EU position – quite the opposite. We wholeheartedly adopted and embraced the EPP slogan of More Europe, placing our faith in the positive impact of being part of a continent-wide enterprise. The results speak for themselves: DISY won 37.75% of the vote – one of the top 10 best performing parties in the Union. It was nothing short of an endorsement for both DISY and the EU project as a whole.
Our experience is a lesson which Mr. Tsipras should take to heart: We too faced a fraught decision. But, it is incumbent upon you to behave as a responsible Member of the European Union. Do not underestimate your citizens – Despite the protests and the animosity, have faith in public common sense. If you demonstrate responsible leadership, the people will respond accordingly.
For us in Cyprus, it is a lesson which continues to be a meaningful reference point. It remains in the forefront of our minds today as we strive to resolve the Cyprus problem. As has been recently reported, we have made tremendous progress in the negotiations and are very optimistic about achieving an agreement for the reunification of the Island in the near future. And indeed even when it comes to this generation-defining decision, 72% of voters want to see greater involvement of the EU in the process.
In the coming years, newly discovered natural resources mean that Cyprus is poised to become a significant player in the European energy industry and a strategic regional player in the Mediterranean, with Israel and Egypt also rapidly developing natural gas. And yet, if we are to take full advantage of the energy supplies at our fingertips and the regional possibilities it brings, the EU will need to be at the heart of this development.
In 2013, the European Union proved to be the ideal partner for Cyprus during an extreme financial low point. Today, with a potential financial windfall now on the horizon, our partnership with the EU remains equally vital to our future. Even with little apparent light at the end of the Greek economic tunnel, it is a lesson that Mr. Tsipras would do well to remember.
