Cyprus and the UK after Brexit: Balancing interests under the eye of the EU

Cyprus and the UK after Brexit: Balancing interests under the eye of the EU

The first phase of the Brexit negotiations was notable not just for the difficulty with which the easiest, for many, part of the talks presented the interlocutors, but also for the united front demonstrated by the EU27.

The second stage of the talks, however, will truly test the unity of the remaining member countries.

The UK will attempt to implement its traditional approach of ‘divide and rule’ in this most crucial of instances, knowing that each country values their relationship with London differently, with emphasis varying according to economic, political or other interests.

Cyprus, for instance, is seen by the UK as a likely ally in these negotiations.

The dependence of Cyprus on banks and the financial sector in general has been somewhat reduced following the harsh lessons of the 2013 crisis. Yet, services, and mainly financial services, are still a very big part of the Cypriot economy and a pivotal element in the current administration’s future growth and economic development plan.

Nicosia is one of the surest bets in the eyes of the British for getting support for the UK call for a comprehensive future trade deal with the EU which would, unprecedentedly for Brussels, include special treatment for a third country’s financial services – a hard sell though not just to Brussels, but mainly to Paris and Berlin.

If tourist exchanges between the UK and the EU are not really expected to be significantly affected after Brexit, there is a reason to be concerned about Cypriots living in or planning to come to the UK and vice versa. A deal on the current Cypriot residents of the UK (and the ones that will settle before 29 Mach 2019) has finally been reached, but it must be noted that a failure to reach a deal on the future relationship might alter elements of the deal. “We don’t want a no deal outcome. But in such a case we couldn’t guarantee that the deal on EU citizens’ rights would be implemented exactly as it has been spelled out now,” a Department for Exiting the EU official told IBNA.

In such a scenario one could assume that the rights of family members of a “settled EU citizen” might not eventually be set in stone, as the phase 1 deal suggests.

Cyprus, having such a populous and active community in the UK, could not afford to risk a breakdown in talks during the second phase of the Brexit negotiations.

The same goes for students. Despite its size, Cyprus boasts one of the top 15 foreign national communities of students in British universities. Student visas, student loans arrangements, joint academic research initiatives and Erasmus programme student exchanges with the UK are bound to feature heavily in the Cypriot arguments for a close future relationship between the UK and the EU.

Brexit carries a further complication for Cyprus and possibly the UK. On Brexit day the island will overnight inherit land borders with a non-EU country. The British bases will have to somehow accommodate the Cypriot and EU citizens that live in their territory and who travel to Cypriot sovereign land every single day for work or to meet up with family and friends.

In the context of the presidential election in Cyprus, Nicholas Papadopoulos came to London in November and declared the status of the British bases an open issue following Brexit should he be the winner.

His comments were another reminder of the complications of Brexit. The UK may be hoping to turn EU countries against each other on various issues to secure the best possible deal for its interests, but at the same time each of these countries could also turn the tables and make things even more complicated for all./IBNA