Is Turkey the odd man out as Egypt, Greece and Cyprus cozy up?

Financial Mirror (Cyprus) - - FRONT PAGE -

On Jan­uary 4, Cypriot Min­is­ter of Agri­cul­ture Ni­cos Kouyialis vis­ited Egypt and met with Pres­i­dent Ab­del Fat­tah al-Sisi and a num­ber of Egyp­tian of­fi­cials, in­clud­ing the min­is­ters of agri­cul­ture and en­vi­ron­ment. Kouyialis said his visit was to dis­cuss joint co­op­er­a­tion projects to be im­ple­mented be­tween Egypt and Cyprus in aqua­cul­ture and among Egypt, Greece and Cyprus with re­gard to land recla­ma­tion and the de­vel­op­ment of new agri­cul­tural meth­ods. The Cypriot am­bas­sador in Egypt, Haris Morit­sis, also met with Egyp­tian Min­is­ter of Trans­porta­tion Saad al-Gey­oushi on Jan­uary 14 to dis­cuss co­op­er­a­tion be­tween Egypt and Cyprus in mar­itime trans­port.

Egyp­tian Am­bas­sador Hos­sam Zaki, who is as­sis­tant for­eign min­is­ter for Euro­pean affairs, said in a Jan­uary 17 state­ment to Egypt’s Al-Youm Al-Sabea news­pa­per that he is pre­par­ing for an­other meet­ing with of­fi­cials of the tri­par­tite sum­mit projects.

Co­op­er­a­tion among the coun­tries was the prod­uct of the Cairo Dec­la­ra­tion, which the three pres­i­dents forged dur­ing a Novem­ber 2014 sum­mit. The dec­la­ra­tion in­cludes a pre­lim­i­nary agree­ment among the coun­tries on their vi­sions for political, eco­nomic and se­cu­rity co­op­er­a­tion, es­pe­cially with re­gard to en­ergy and coun­tert­er­ror­ism. Their co­op­er­a­tion is ex­pected to in­tro­duce a broader re­gional di­a­logue be­tween the Arab world and the Euro­pean Union.

Re­gard­ing op­por­tu­ni­ties to in­crease trade, Kouyialis said in a press state­ment, “Egypt views Cyprus as its gate to the EU, while Cyprus views Egypt as its gate to the Arab world and Africa.”

The pur­suit of in­creased trade ex­change be­tween the three coun­tries might not be the only rea­son for the de­vel­op­ment of re­la­tions. There may be more im­por­tant com­mon in­ter­ests that pushed them for de­vel­op­ing their co­op­er­a­tion.

The need to cre­ate new eco­nomic al­liances be­yond the EU has per­haps be­come a pri­or­ity for Greek lead­ers, es­pe­cially since the eco­nomic cri­sis has cast a shadow over Greece since 2010. This sit­u­a­tion prompted Euro­pean Com­mis­sion Pres­i­dent JeanClaude Juncker to threaten to kick Greece out of the eu­ro­zone should it fail to com­ply with the EU’s bailout pro­gramme. Greece took out nu­mer­ous EU loans to pay off its debts. The coun­try de­faulted on some of its debts and still might stall in pay­ing off some oth­ers, most re­cently a 7 bln euro bridge loan in July.

The eco­nomic cri­sis has led to a de­cline in for­eign di­rect in­vest­ment stock in Greece, from $40.3 bln in 2010 to $24.8 bln in 2012. EU di­rect in­vest­ment stock in Greece de­clined from $33.8 bln in 2010 to $19.1 bln in 2012.

Econ­o­mist

Farag

Ab­del

Fat­tah

told

Al- Mon­i­tor such de­clines may con­tinue, “es­pe­cially in light of the in­creas­ing ten­sions in the eu­ro­zone from 2013 un­til 2015.”

“Greece is un­likely to re­turn as a hub for EU in­vestors, and the lat­ter are un­likely to at­tract Greek in­vestors. There­fore, Greece is look­ing for new part­ner­ships with other coun­tries, in­clud­ing Egypt,” he said.

Ab­del Fat­tah ex­pects the same for Cyprus, whose eco­nomic cri­sis be­gan in 2012 and peaked in 2013. Ac­cord­ing to the UN Con­fer­ence on Trade and De­vel­op­ment, there are no of­fi­cial for­eign di­rect in­vest­ment sta­tis­tics for many coun­tries, in­clud­ing Cyprus and Greece af­ter 2012. How­ever, the 2012 fig­ures show EU di­rect in­vest­ment flows in Cyprus fell 42%, de­clin­ing from $796 mln in 2011 to $461 mln in 2012. The yearly de­cline in in­vest­ment flow­ing from the EU to Cyprus did not re­sult in a cor­re­spond­ing drop in EU di­rect in­vest­ment stock in Cyprus.

On the other hand, Cyprus’ di­rect in­vest­ment stock in EU coun­tries dropped sig­nif­i­cantly from $8.33 bln in 2011 to $3.6 bln in 2012, a de­cline of 56.8%.

Fol­low­ing the eco­nomic prob­lems of Greece and Cyprus with the EU, both coun­tries de­vel­oped re­la­tions with Rus­sia — Egypt’s most prom­i­nent ally, cur­rently. Cypriot Pres­i­dent Ni­cos Anas­tasi­ades de­clared in Fe­bru­ary 2015 that his coun­try would al­low Rus­sia to es­tab­lish a mil­i­tary base in Cyprus. The two states signed nine mil­i­tary co­op­er­a­tion agree­ments in the same month.

As is the na­ture of shift­ing re­la­tion­ships in the re­gion, th­ese new rap­proche­ments may have much to do with Turkey’s strained re­la­tions with both Rus­sia and Egypt, es­pe­cially since there’s an old con­flict be­tween Greece, Cyprus and Turkey about gas dis­cov­er­ies in the Mediter­ranean Sea.

Dur­ing the Cairo Dec­la­ra­tion con­fer­ence in Novem­ber 2014, Turkey was warned to stop nat­u­ral gas ex­plo­ration in the Mediter­ranean Sea with­out a clear de­mar­ca­tion of the mar­itime bor­ders to pro­tect each state’s dis­cov­er­ies and gas fields.

Turkey re­sponded by com­mis­sion­ing naval forces to en­gage in the area to pro­tect against any ac­tions to­ward its projects of oil and gas ex­ca­va­tion. This sug­gested that the gas ex­plo­ration op­er­a­tions may stir con­flict among Egypt, Cyprus, Greece and Turkey. Yasri al-Ezbawi, a re­searcher at Al-Ahram Cen­tre for Political and Strate­gic Stud­ies,told Al-Mon­i­tor at the time that Egypt, as a pre­emp­tive step, rushed to ally with Cyprus and Greece.

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