The result of the UK EU Referendum vote in July 2016 took everyone by surprise, but it was clear that the British people were determined to throw off the political and economic shackles of EU membership. Since then, negotiations have been taking place, but the path to Brexit is not a smooth or easy one.
Many countries in the European Union, including the Republic of Cyprus, rely on trade with the UK. Those member states that are heavily exposed to the UK economy are likely to feel the impact of toxic divorce negotiations, so Cyprus, a former British colony, is asking Michel Barnier to treat the UK with respect during Brexit negotiations.
An acrimonious divorce
Exit talks have been dogged by bickering and a great deal of ill-feeling on both sides of the table. Despite calls from Cyprus and other member states for fairness, Brexit is proving to be an extremely tough negotiation. Following the fourth round of talks in September last year, chief negotiator, Michel Barnier, was insistent that EU taxpayers had no intention of paying “the burden” of the UK’s decision to depart from the European Union.
Some UK politicians have accused Michel Barnier of deliberately punishing the UK for its decision to leave the European Union with punitive transition terms. However, following heated criticism, EU officials have now removed a so-called punishment clause from a draft document that outlines the way forward for the Brexit transition period post-March 2019. This transition period, which is expected to last two years, will allow countries such as Cyprus to adjust to the changes and negotiate trade new deals.
The UK is Cyprus’s second largest trading partner
Theresa May is hoping to have a comprehensive trade deal done and dusted by the time the UK leaves in March 2019. A fluid trade agreement between Cyprus and the UK is essential for a healthy Cypriot economy. The UK is Cyprus’s second largest trading partner, so any blockages in trade, foreign exchange trading, and foreign investment could have long-term repercussions. The UK provides investment funds and service jobs.
British armed forces stationed in Cyprus also help to protect it from political and military threats in the Middle East and Eastern Europe. The UK invested millions in a runway upgrade at Akrotiri airbase, which is a crucial military base for NATO troops in the region. 3,000 British military personnel and their families are stationed in the British Overseas Territory of Akrotiri and Dhekelia.
There is also the issue of the 7,000 Cypriot citizens who work on British military bases on the island. Any deal brokered between the Republic of Cyprus and the UK will have to take their needs into account.
There are also concerns about the status of Cypriot citizens in the UK post-Brexit. The EU has said it will accept an accord between Cyprus and the UK, but it must be compatible with European Union Regulations.
It is clear that there is still a lot to negotiate before the EU and UK part company. Cyprus wants to remain close to the UK post-Brexit, with political scientists recommending a strengthening of the ties between the two. Whether this actually happens once the dust settles in the aftermath of Brexit remains to be seen.