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The historic "no" of the Cypriot parliament to the "bailout" and "haircut" of bank deposits prescribed by the EU has a historical precedent: Cyprus' rejection of the Annan Plan for "reunification" of the island in 2004.  Then, just as now, the pressure from the international community was intense, and the consequences of a rejection were said to be dire.  Then, just as now, Cyprus withstood the pressure and said "no."

By Michael Nevradakis

International pressure.  Threats of catastrophe in the event of non-compliance.  An ongoing crisis which desperately required a response.  These were some of the dilemmas facing Cyprus, as its government responded to the country's worsening economic situation by agreeing to a "bailout" from the European Union which involved a "haircut" of Cypriot bank deposits.  

It was less than a decade ago that Cyprus found itself in a similar position.  In 2004, after numerous rounds of negotiations, the Annan Plan for Cyprus, named after the then-Secretary General of the United Nations, Kofi Annan, was presented.  This plan purportedly provided a framework in which Cyprus, 37% of which has been illegally occupied by Turkey since 1974, would be "reunited" under a loose confederation of two states, one Greek Cypriot and one Turkish Cypriot.  Then, just as now, intense pressure was thrust on Cyprus by the international community, and the Greek Cypriot community in particular was threatened with the dire consequences that would follow if they did not approve the plan.  Referendums were held, first in the Turkish-occupied north, where it passed, and then in the internationally-recognized south, where it was overwhelmingly rejected.  Prior to the referendum in the south, the then-president of Cyprus, Tassos Papadopoulos, in an emotional televised address, stated his conviction that the plan should be rejected—a speech which, for many, made Papadopoulos a national hero.

This isn't the place to analyze the pros and cons of the Annan Plan.  It is worth highlighting, however, a few of the reasons why the Greek Cypriots rejected it.  Some of the foremost reasons included the disproportionate number of seats in the governmental structure that it provided to the Turkish Cypriot community compared to their percentage of the population, its provision for the immediate dissolution of the Greek Cypriot government (whereas the Turkish Cypriot regime would be phased out over two decades), and most significantly, the fact that the Turkish military, which occupies the northern third of the island, would be permitted to remain in Cyprus, with expanded intervention powers.  These are just a few of the reasons why the Annan Plan proved unacceptable to most Greek Cypriots.

It should be noted that the pressure on the Greek Cypriots to accept it came from all sides: from the UN, from the EU, from the United States, and even from Greece.  George Papandreou, the then-leader of PASOK, was strongly in favor of the Annan Plan, as was the party that now represents the "radical" opposition to austerity, Syriza.  Konstantinos Karamanlis, the prime minister at the time, was against the Annan Plan, but other members of his New Democracy party favored it.  This pressure was combined with threats of the dire consequences rejection would bring.  Cyprus would be barred from entry into the EU (it was a month away from accession) and it would be isolated from the international community.

Unlike their counterparts in Greece, the Greek Cypriots didn't cave, and incredibly, the sky didn't fall and the island's accession process into the EU remained intact, as did its international standing.  The threats turned out to be hollow words, bark with no bite.  The island was not "reunified," but the status quo was deemed preferable to a solution where the occupier would be the beneficiary.

Notably, Nikos Anastasiadis, the newly-elected president of Cyprus, had been, at the time, one of the strongest proponents of voting "yes" on the Annan Plan—a fact not lost on Turkey's foreign minister Ahmet Davutoğlu, in recent remarks he made on the the elections in Cyprus.  Which brings us back to the present.  Nine years later, Cyprus was faced with a very similar dilemma, with analogous pressures coming from the international community, and comparable threats about the consequences of non-compliance.  Why, Cyprus was just days away from a catastrophic bankruptcy, it was said, if it did not accept the "bailout" and all of its conditions.  Cyprus would be left to "fend for itself" if it refused this "help" from the EU!  Anastasiadis himself claimed that Cyprus was faced either with acceptance of the deal or immediate bankruptcy.  And then, the Cypriot parliament called the EU's bluff.

A funny thing happened: the "bailout" and the "haircut" were rejected, yet the lights stayed on, the island was still intact, and the banks didn't collapse into an ashen pile of IOUs.  Cypriots, who overwhelmingly opposed the hijacking of their savings, celebrated.  The Germans?  They weren't as pleased.  But the rhetoric following the historic "no" vote was that Cyprus now had until June to come up with a solution in order to stave off default.  So much for that "imminent" bankruptcy.

The parallels between 2004 and 2013 continue.  Now, just as then, the Greek Cypriots were openly betrayed by the politicians of Greece.  The ruling coalition of Greece was strongly in favor of the EU's "solution" and encouraged the Cypriots to accept it, just as they urged the Cypriots to support the Annan Plan in 2004.  What the politicians of Greece proved, once again, is how weak and spineless they are.  Not only did they not stand up for Cyprus, but they continued their pathetic tradition of unquestioningly accepting everything proposed by their EU counterparts.  "Yes to everything" has become a catch-phrase that follows these politicians wherever they go.  They have not only sold out the Cypriots, they've also repeatedly sold out the people they were elected to represent.  Indeed, it has been reported that, following Cyprus' "no," a high-level Greek minister called on German finance minister Wolfgang Schauble to "punish" Cyprus.

One final parallel: in the aftermath of the failed vote on the Annan Plan, officials from the United States, the EU, and elsewhere used this rejection as "evidence" that it was the Greeks, not the Turks, who did not desire peace.  This argument is still heard today.  In the aftermath of Cyprus' rejection of the EU-supported "bailout," Schauble announced that Cyprus should not except more "help" from Germany, the Swedish finance minister stated that only beaches will remain on Cyprus, while in an egregious journalistic faux pas, Slate Magazine recommended that Cyprus sell the occupied northern territories to the occupiers—Turkey—in order to raise money.

For everyone who has opposed austerity, the battle may have been won, but the war continues.  The EU surely will not take this lightly, and the Russians want to assert themselves in the region.  Surely the Turks are also closely following the developments.  But the "no" also represents the first instance in which a EU member-state has rejected the harsh "medicine" that was prescribed to it, following in the proud tradition of the rejection of the Annan Plan.

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