Cyprus Mail

How a leopard changes spots

By Demetris Nicolaou

WHAT IS happening to DIKO chief Nicolas Papadopoulos? Why has he metamorphosed into an anti-memorandum campaigner? How did the ‘responsible’ and ‘prudent’ politician on the economy find a common language with AKEL, which he once squarely blamed for the biggest economic disaster in the history of the Republic.

As recently as last April, Papadopoulos was arguing that “the quickest way to free ourselves from the Memorandum (of Understanding) is to implement it and the quickest way to get rid of the troika is to win the confidence of the markets and our European partners. Our decisions must be implemented and our commitments must be honoured.”

Why has he made a U-turn, undermining the credibility of Cyprus in the eyes of our lenders? Why does he now not want to get rid of the troika as soon as possible through the implementing the memorandum (MoU), but its “radical” re-negotiation instead?

His change of policy is not restricted to the MoU, but also extends to the efforts to stabilise the banking sector. DIKO does not seem to view positively the Bank of Cyprus’ capital increase. One member of the bank’s board, appointed on Papadopoulos’ recommendation and under his influence, is co-operating with board chairman Christis Hassapis to prevent the capital issue.

Archbishop Chrysostomos has also joined this effort. After a meeting he had last Sunday with Hassapis, he contacted lawyers representing Russian shareholders of the bank and urged them to vote against the capital issue at this month’s extraordinary general meeting.

The bank’s issue of capital, which would be taken up by American investors, sparked reaction from political parties and a section of the press which are suspicious of the West and seek closer ties with Russia. This thinking was illustrated in an article, written by the Phileleftheros chief on July 30, in which he protested about the marginalisation of the Russians.

The Americans, he wrote, “want to take the package of a European island in the heart of the Mediterranean and benefit economically and politically. If this is a success of the Cyprus government and Washington or an intrigue with implications that we could not even imagine at present, will be evident soon.”

The anti-memorandum front of the parties of the Left and so-called Centre appears to be the first step in the creation of an anti-government coalition that could put the adjustment programme at risk and cause political instability. In a recent meeting he had with the Employers and Industrialists Federation, Papadopoulos gave the impression that he was determined to clash with the government over the economy, even though his motives were blatantly political.

The protection of the primary residence that he bangs on about is just a pretext. Although it is popular with the public, it is the big developers with the NPLs who will benefit from blocking of the foreclosures bill that he is demanding.

However the deeper cause for the DIKO volte-face is its leadership’s decision to attack the government on the only matter it has had success – the management of the economy.

Inaugurating a dialogue with the other parties for the “re-negotiation of the memorandum” Papadopoulos made an opening to AKEL. He abandoned the scathing criticism of AKEL that was part of his discourse and started working to build co-operation with the communist party.

Given the electoral pacts of the past between the two parties, many have been speculating that Papadopoulos is preparing for the next presidential elections and was working on securing AKEL’s backing.

Λήδρα Πάλας // Ledra Palace

Some in AKEL are even claiming, rather optimistically, that there could be so much political instability that Anastasiades might not be able to last his term.

The Cyprus problem, ever since the establishment of the Republic, has always been the raw material of policy formulation and political advancement.

If there is one thing that never changes with regard to the Cyprus problem it is the opposition of the parties of the so-called Centre to any effort made to change the current status quo.

It is thought that over the last few months the US has been preparing the ground for a new initiative on the Cyprus problem that would unfold in autumn.

This initiative is not unrelated to what is happening in the Middle East and to the tense relations between the West and Russia over the Ukraine.
Last May’s visit to Cyprus by US Vice President Joe Biden was a very important political event.

During his visit, Biden set out the new relations between the US and Cyprus, declaring that Washington considered Nicosia a “strategic ally” in the geo-politically sensitive region of the Middle East.

It was the first time ever that Washington had made such a direct approach to Nicosia. Until recently Cyprus interested the US merely as an extension of Greece-Turkey relations.

In effect, the US was asking Cyprus to choose sides in the new East-West stand-off. It wants Cyprus to cut its political and economic dependence on Russia, promising in exchange, support in the island’s exploitation of hydrocarbons and backing for the banking sector.

Inevitably this opening provoked Russia. There has never been an attempt at involvement in the Cyprus problem by the US that did not provoke a reaction by the Soviet Union and now Russia, through AKEL and the parties of the Centre.

Given the paranoid fear and suspicion of US intentions nursed by AKEL and parties of the Centre, combined with prevailing view that Russia was Cyprus’ dependable ally, it was no surprise that AKEL, DIKO, EDEK and Giorgos Lillikas all took a supportive stance towards Russia’s intervention in the Ukraine, even though the precedent created by the annexation of Crimea was against the national interests of Cyprus.

It was at this time that Moscow sought a closer co-operation with these parties. After the Cyprus government aligned itself with the rest of the EU on sanctions against Russia, Moscow invited an AKEL delegation, including Demetris Christofias, which was seen by Foreign Minister Sergei Lavrov.

The agenda of the meeting included the Ukraine and US interest in the Cyprus problem.

Speaking about the visit at a gathering in Limassol in April, Christofias said: “Sergei Lavrov, very clearly, conveyed the message that it was never possible for Russia to consent to solutions that would be guaranteed by NATO or to Cyprus joining NATO.”

By this logic, a settlement would not depend on what was in the interest of Cyprus, but on what Russia was prepared to approve.

In May 19, three days before Biden’s visit to Cyprus, Russia’s ambassador to Nicosia Stanislav Osadchiy, in an interview to Sigmalive, said that Moscow was opposed to an “artificial speeding-up” of the peace talks.

Hinting at the US initiative, the ambassador said that Moscow would react to a settlement of the Cyprus problem that “would be, first of all, to their (Americans) benefit and not meet, to the required degree, the wishes of the Cypriots,” and that in such conditions, “the support by Russia, which is a reliable and tested friend of Cyprus and the Cypriots, would not lose its significance.”

Given that developments in the Cyprus problem terrify the parties of the Centre, and given that the DIKO chief wants a weak government unable to take difficult decisions, it was only to be expected that he would find common ground with Russia, which, for its own reasons, does not want the US initiative to be successful.

And Moscow, unhappy over the Cyprus government’s turn towards the West, now shares an agenda with Papadopoulos. The joining of forces by AKEL and DIKO, plus the pro-Russian stance of the smaller parties could make up a power bloc to oppose any American initiatives.

At the start of July, Papadopoulos visited Moscow and had contacts with members of the government and met the deputy foreign minister of the Russian Federation Alexei Meskov.

Speaking from Moscow during his visit and referring to the US initiatives on Cyprus, he said on Sigma TV that the Americans “had been left to take the upper hand in developments, something that is not viewed favourably in Russia”.

On his Moscow visit, Papadopoulos was accompanied by Ambassador Osadchiy, a most unusual procedure. It is not normal practice for an ambassador to accompany a leader of an opposition party to the foreign ministry of his country to discuss foreign policy matters relating to the country in which he is posted.

Such issues are only discussed at government level, and this sidelining of the Cyprus government could be seen as a direct intervention in the island’s internal affairs. Had an ambassador of a Western country behaved in such a way, there would have been a political outcry, but there are different rules for Russia.

It took Papadopoulos six months to admit that the rejection of the first Eurogroup decision (levy on all bank deposits), in the belief that Russia would come to the rescue, was a mistake.

He told CyBC in September 2013 that if he had another chance he would have voted in favour of that decision. On the same show, he said that to overcome the economic crisis we needed to implement the memorandum, and that sending the then finance minister to Moscow to ask for help, before the second Eurogroup meeting was also a mistake.

That mistake led to the winding down of Laiki and the near-collapse of the Bank of Cyprus. But the political leadership refuses to learn anything, still forging alliances to prevent what it does not want to happen.

Another alliance of negation is being put together now and, although the country has difficult decisions to make, nobody seems in the least bit concerned about the consequences.

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