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Our View: Federal solution would end north’s crushing economic dependence on Turkey

feature nick main in some shops in northern nicosia prices rose 17 per cent overnight earlier this week (nick theodoulou)

The despair of Turkish Cypriots, over the state of the north’s economy is understandable. They are suffering the devastating effects of President Tayyip Erdogan’s unorthodox economic policies that have made a bad situation much worse.

This year, the Turkish lira has lost about 60 per cent of its value while inflation has soared – independent groups have put it at 50 per cent, more than double the government figure of 21 per cent. The north’s economy has reportedly contracted by a staggering 16 per cent in 2021.

Inevitably, the purchasing power of Turkish Cypriots has taken a big hit, leading to the impoverishment of large sections of the population, even those employed in the public sector. Prospects for the new year do not look much better despite promises by the ‘government’ of raising the minimum wage, which will make little difference given the high inflation rate that does not look like being brought under control. Erdogan’s idea of controlling prices by lowering interest rates does not stand up to economic rationality.

In a sign of their despair, thousands of Turkish Cypriots took to the streets on Tuesday to protest about the situation chanting ‘No to impoverishment’ and ‘Stable currency,’ saying they would not tolerate the further downgrading of their lives and warning that their demonstrations would be stepped up with the passing of the days.

While their anger is understandable, there is no escaping the futility of their protests. The situation is beyond the control of the regime in the north, which does not have the power to stop the slide of the lira or the rising prices. The crisis affects the whole of Turkey and the ‘TRNC’ is not just a part of it, but it is totally dependent financially on Ankara.

Everyone is aware of this, but the protests are being used by the opposition parties in order to rally support ahead of next month’s ‘parliamentary’ elections. Needless to say, a victory for the opposition parties will not make the slightest bit of difference to the situation of the economy, even though it could be a defeat of the National Unity Party’s two-state solution agenda. Perhaps more voters would understand that only through a federal settlement would their demand for a stable currency – the euro – be satisfied and the north’s economic dependence on Turkey end.

Being part of the EU, in a federal Cyprus, rather than a province Turkey would have many economic benefits, for the north, and would put a halt to the downgrading of people’s lives.

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