By Ozay Mehmet
If meant sincerely, ‘loose’ federalism, otherwise confederation, is emerging as the latest template for settling the long-standing Cyprus problem. However, it requires a clear definition to put substance on what it means and illustrate how it might work in practice.
There are no iron-clad recipes in state formation. No two federations or confederations are the same. Every case is the result of creativity and compromise, reflecting goodwill and willingness to cooperate on the part of the stakeholders. The essence of confederation is cooperation agreements.
In Cyprus, the long UN-led peace-making has rested on political equality of constituent states in a bizonal, bicommunal Cyprus. To be functional, a Confederal Republic of Cyprus (CRC) must be created with minimal transition costs. In other words, the existing two-state reality on the island must be disturbed with least-cost.
Here is one such feasible model. At the top of CRC would be a presidential council headed by two co-presidents, each being the leader of the two constituent states. Each leader would be elected as now by voters of each state on the basis of ‘one citizen, one vote.’ Members of the presidential council would be an agreed number of representatives from constituent states. Decisions might be by majority, each co-president having veto.
The presidential council would be endowed with Cyprus sovereignty and independence, symbolised by a common flag and confirmed by single citizenship, and the euro its currency managed by an independent central bank in conformity with EU monetary policy. Under the authority of the presidential council, there would be a small central government exercising only joint competencies as detailed below.
The two constituent states would be vested with all the residual powers. These would include registration of births, deaths and citizenship, land titles, civil and criminal laws, health, education, religion, telecommunications, culture and sports, as well as police and security. Each state would also conduct its own relations with other countries. Both would be equally represented in the EU.
Each and every joint competence would be specified under specific cooperation agreements, with a sunset clause fixing a term (e.g. three or five years, renewable), to be implemented for the agreed term by a designated central government authority.
Some specific examples of cooperation agreements may be given. Take the case of tax rental agreements. For efficiency in tax collection, the central government authority may be the sole tax collection agency on the island, transferring tax revenues collected to states to pay for their public services. The tax rental agreement would cover fiscal transfers, specifying the exact formulae for payments from the central to state governments.
Fiscal transfers should be so managed as to ensure that within a short period of time, all citizens attain a common standard of living. This is essential to ensure that in CRC there are no first and second class citizens.
Another case of joint competence would be over borders and boundaries, including territorial seas and sharing of hydrocarbon wealth. EU relations would be similarly governed by a specific cooperation agreement.
Since property claims is a vital part of any Cyprus settlement, a special cooperation agreement on land claims would be necessary. Over and above any reinstatement, adequate compensation with sufficient finance over an agreed term would have to be designed and implemented.
In general, the list of potential cooperation agreements can be flexible and would largely depend on the level of trust and willingness of parties to share and cooperate. In the early years of CRC, the list may be highly limited, growing over time as mutual confidence is gained.
In conclusion, it should be realised the above is a personal vision. Cynics may well argue that this vision is purely academic because President Anastasiades is not really sincere. He missed a golden opportunity in Crans-Montana where he insisted on a zero-sum guarantee/security system. Now, he claims a loose federation would be positive sum satisfying both sides. But, is he serious? Or, is he simply trying to prolong endless talks? Maybe not.
On the other hand, the latest polls indicate that half the Greek Cypriots polled now endorse a bizonal Cyprus. There is, therefore, merit in stimulating discussion of a future win-win loose federation. Given goodwill, all citizens, in the north and south, must know what they are getting into, if and when, a loose federation in CRC is ever to be established within an agreed time period.
Ozay Mehmet is a senior fellow at the Centre in Modern Turkish Studies and a distinguished research professor emeritus at Carleton University in Canada
