Cyprus was one of ten states that joined the European Union on 1 May 2004. Fadil Ersozer explains that while EU accession has provided some clear advantages for Cyprus, the Turkish-Cypriot north of the island has remained largely excluded from the full benefits of membership.
Cyprus’ accession to the EU, alongside nine other countries on 1 May 2004, was a historic moment framed by rhetoric on the “reunification of Europe” and ending “the divisions of the Cold War”. However, this milestone was overshadowed by the island’s entry as a de facto-divided country, with a longstanding frozen conflict.
This atypical enlargement led to the suspension of EU laws in the north, limited the EU’s engagement with the Turkish Cypriot community and created significant disparities in the EU trajectory of the island. Over the past two decades, the Greek Cypriot-led Republic of Cyprus in the south has experienced rapid development and economic growth, despite challenges like the financial crisis, and an increased sense of security.
However, while Turkish Cypriots benefit from EU citizenship rights individually, the Turkish Cypriot-led internationally isolated north has remained largely excluded from the full benefits of EU membership and representation in EU institutions, resulting in their marginalisation over time. Despite numerous efforts to resolve the conflict and unite the island before and after the accession, the division has persisted, leading to entrenched political divisions. It has also exacerbated economic disparities, complicating the overall narrative about the EU membership as a unifying force.
Cyprus in the EU
Over the past twenty years, the Republic of Cyprus has been a net beneficiary from EU membership and has experienced robust economic performance, boasting an annual growth rate of 4% and witnessing a six-fold increase in trade. As a member state, it received substantial investments to boost its growth and income towards the EU average.
For instance, the EU provided €1.7 billion under its Cohesion Policy and €98 million under the Juncker Plan between 2004 and 2020. This period has seen transformative changes, including infrastructure development, public sector modernisation and research and innovation advancements. Cyprus emerged as an attractive destination for investors and businesses, with EU accession benefiting all sectors of life, from health to agriculture, tourism and fisheries.
In the early years of membership, there was widespread enthusiasm and optimism among the Greek Cypriot public, with approximately 54% supporting the EU. However, the financial and banking crisis in the late 2000s brought significant challenges, disrupting the previously positive narrative.
The Republic of Cyprus underwent an economic adjustment programme imposed by the EU and IMF between 2013 and 2016, which included strict austerity measures in areas like public administration and taxation. While these measures were intended to restore financial stability and promote sustainable economic growth, they led to widespread frustration among many Cypriots. During that time, support for the EU plummeted to just 13%, coupled with the delegitimisation of the EU in the Cypriot media.
Despite this setback, the legacy of the financial crisis served as a litmus test, demonstrating the Greek Cypriots’ commitment to European integration. With the end of Troika supervision in 2016, Greek Cypriots transitioned to a state of “soft Euroscepticism”, characterised by criticism of specific EU policies rather than the European project as a whole. Despite the earlier opposition, 82% of Greek Cypriots favoured Eurozone participation in 2019. During this period, the Republic of Cyprus continued to receive EU funds, such as €150.8 million under the EU research and innovation programme Horizon 2020. These efforts helped the EU rekindle its appeal to the Greek Cypriot community, boosting public trust to 54% by 2019.
EU funding
The Republic of Cyprus continued to benefit from substantial EU support throughout the COVID-19 pandemic and the energy crisis. The country received significant funding, including €603 million in loans for its Temporary Wage Subsidy Scheme (SURE instrument), €112 million in 2021 under REACT-EU, and €92 million from the Just Transition Fund in 2021. These funds aimed to mitigate the impact of the pandemic and support a green and digital economy.
Additionally, the NextGenerationEU programme under the long-term EU budget for Cyprus (2021-2027) allocated €1 billion in grants and €1.5 billion in loans across various sectors, focusing on economic and social resilience, green and digital transitions, and addressing common European challenges. Additionally, the REPowerEU initiative aims to diversify the EU’s energy sources and reduce its energy dependency on Russia, following the Russian invasion of Ukraine. It funds ambitious energy projects, including €100 million for the EuroAsia Interconnector project, designed to connect Cyprus, Crete and Israel to the EU electricity network and promote renewable energy production.
In light of the planned investments, the Greek Cypriot economy is forecasted to grow in the coming years, with a robust labour market and decreasing unemployment rates. However, while Greek Cypriot GDP grew by 31% between 2003 and 2018, it still lags behind the EU average, standing at €33,400 compared to the EU average of €35,500 in 2022. Euroscepticism is also considerable, with just 39% supporting the EU, below the EU average of 47% in 2023.
Cyprus is also grappling with broader issues of corruption, money laundering and a lack of transparency in its public sector and banking system, complicating its relations with the EU. The 2022 Eurobarometer survey revealed that 94% of Cypriots believe corruption is widespread in the country, significantly surpassing the EU average of 68%. Transparency International’s 2023 Corruption Perceptions Index (CPI) ranks Cyprus 49th out of 180 countries. Within this context, the country has faced criticism for serving as a tax haven and a gateway for dubious financial transactions, the flow of Russian money into the country, the use of shell companies for illicit activities and “selling” EU citizenship through investment.
Turkish Cypriot representation
The Republic of Cyprus has also significantly influenced European policies and initiatives since the country’s EU accession, though not always cooperatively. For example, the EU was “determined to put an end to the isolation of the Turkish Cypriot community”, demonstrated by its approval of the UN-sponsored Annan Plan in 2004. However, the Republic of Cyprus blocked proposals like the “Direct Trade Regulation”, arguing it would legitimise the “illegal state” in the north.
To partly address these challenges, the EU initiated the EU Aid Programme for the Turkish Cypriot Community in 2006, providing financial and technical assistance for economic and social development, and promoting economic integration and future reunification of the island.
Although these efforts have partly improved living conditions in the north, they remain incomparable to the transformations experienced in the south. The EU’s failure to distribute membership benefits more equitably has undermined its image in the north. Nonetheless, the EU has become a significant factor in Turkish Cypriot political life, continuing to provide a framework for reunification, and many Turkish Cypriots see their future within the EU.
A notable development occurred during the 2019 European Parliament elections, with the election of Niyazi Kızılyürek, a Turkish Cypriot candidate from the Greek Cypriot communist party AKEL. While this was a positive step for Turkish Cypriot representation in EU institutions, the June 2024 European Parliament elections were a setback. Neither Kızılyürek nor the other two Turkish Cypriot candidates were elected, muting the Turkish Cypriot voice in the European Parliament.
An apolitical YouTube prankster, Fidias (19.4%), and the ultranationalist party ELAM (11%) swayed the Greek Cypriot votes, each winning a seat in the European Parliament, in line with trends in other parts of Europe. Consequently, AKEL lost one of its two MEPs (22%), and the socialist-Greek Cypriot nationalist EDEK lost its single seat, while the centre-right DISY (25%) retained its two seats, and the centrist DIKO (10%) kept its one.
Turkish Cypriot turnout also remained exceptionally low at 5.5%, failing to make the anticipated impact on the outcome. This is due to many Turkish Cypriots seeing these elections, held only in the south, as unrepresentative or irrelevant to their lives. They have demanded that two of Cyprus’ six seats in the European Parliament should be allocated to them for fair representation.
The EU as a foreign policy amplifier for Cyprus
EU membership has also granted the Republic of Cyprus veto power over EU enlargement, creating challenges for Turkey’s accession. The Cyprus problem became a key factor in Turkey-EU relations, acting as membership conditionality. Turkey’s refusal to officially recognise the Republic of Cyprus and open its ports led to the European Council’s decision to freeze eight chapters of membership negotiations in December 2006, illustrating the impact of Cyprus’ EU membership on European integration.
Additionally, the Republic of Cyprus has developed regional cooperation initiatives, which have amplified its foreign policy priorities and created tension with Turkey regarding their opposing claims of “Exclusive Economic Zones” in the contested waters of the Eastern Mediterranean. These initiatives include the EU Med group (Med-9), an alliance of nine EU countries bordering the Mediterranean, and the EastMed Gas Forum, a regional cooperation initiative on energy and security.
Reflections on twenty years of membership
EU membership has brought significant benefits and challenges for Cyprus. The EU’s impact and image in Cyprus have not always been uniformly positive. Still, they are subject to political and economic developments and the EU’s ability to deliver its promises, as seen in the strict austerity measures and the exclusion of Turkish Cypriots.
EU accession has not signalled the end of political and economic transformations, as membership may require costly reforms during difficult times. EU membership is not a panacea to all problems, as demonstrated by Cyprus’ endemic challenges such as corruption and the ongoing division between the north and south of the island. Instead, it serves as a platform for guidance, learning and cooperation on common challenges.
Therefore, it is crucial for Cyprus to work with the EU to address its continued issues, strengthen its position within the EU, avoid marginalisation and uphold its commitment to European integration. Furthermore, the experience of Cyprus shows the need for a careful EU enlargement process that can overcome the limitations of the EU’s institutions and initiatives. Reinventing EU enlargement policy is key to enhancing EU actorness in an increasingly aggressive and conflict-prone global environment.
This article is part of a series organised by Eli Gateva on Rethinking Europe’s East-West Divide – 20 Years since the Big Bang Enlargement
Note: This article gives the views of the author, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured image credit: rarrarorro / Shutterstock.com