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Matthew Kidd: Agreeing on the settlement is not the end of the story

Matthew Kidd: Agreeing on the settlement is not the end of the story

 

By Angela Komodromou

 

- “There are lots of reasons why Cyprus might be a good place for companies after Brexit”

- “The good news is that at least for the next years there will be no change for Cypriots studying in the UK”

 

Britain’s High Commissioner to Cyprus, Matthew Kidd, is serving his second term on the island, having left during the economic crisis and returning in the midst of advanced reunification talks between the two community leaders. He talks about his views on the political situation, the economy and, of course, Brexit.

 

1. In the June referendum, the British people decided to leave the EU. What is the procedure that will follow until the final Brexit?

The procedure is that by March next year, the British Government will invoke article 50 of the European Treaty which provides for a two-year negotiating period about the terms on which we leave. Up to then, we will set our priorities which we will then be able to present to the 27 (EU member states), and that will then become the basis of the process through the two years that follow.

 

2. It is suggested by leading analysts that Britain will never be the same after  Brexit. The same also applies for the EU without Britain. Are you concerned about the prospect of the U.K. breaking up with a potential independence of Scotland?

In a sense of course, this is a big enough change – that the UK will not be the same and the EU will not be the same but “not the same” doesn’t necessary mean worse, either for the UK or for the EU. We have underlying economic strengths and underlying political and professional strengths, which we believe will continue to support us in creating a successful new set of relationships around the world.

Building on the strengths on a long term presence around the world, we will be designing what we hope is a future relationship with the EU, which will enable us both to be the closest collaborative neighbours with the EU.

It remains important that the EU should continue to succeed and remain a successful dynamic as we will be facing economic and political challenges. It will still be our neighbour, it will still be – we hope – the destination of a very large share of our exports of goods and services. Also, it will still help to define the security environment around us and so we want it to succeed and we want to have the most constructive relationships with it, even if we know that we will not be inside it, but next to it.

About Scotland, it’s been two years now since they had a referendum on independence, and that referendum reached a clear result to stay within the UK.

Although it’s true that the vote in the EU-Brexit referendum, as far as Scotland is concerned, was in favour of staying within the EU, it’s the United Kingdom as a whole that is a member and will need to leave, so I think the process will involve – and it’s already started – the closest possible engagement between Westminster and Belfast and the regions of England as well to establish a negotiating position that works for everybody. But it will need to be done as a United Kingdom.

 

3. Our main concern in Cyprus after a Brexit has to do with studies in the U.K. Do you believe there will be drastic changes in the university fees, loans, student accommodation, etc? Can you allay the concerns of Cypriot parents on this issue?

Ι understand the concerns of Cypriot parents on this issue. I’m a parent of student-aged children myself, so I know exactly how important it is to be able to plan ahead. The good news is that at least for the next years there will be no change. The government has just announced that for all students who will be starting in the next academic year, the rates, fees and the entitlement to support will remain as it is now for the whole period of their courses. Not just for next year, but for all the years of their courses. I think long term the importance to the UK of the higher education sector, and the research and development sector that relates to it, will continue to be high, so the effort there will be on our part to try to recognise the concerns of Cypriots and any other parents in the future as well.

 

4. Another concern is the possible drop in tourism from Britain to Cyprus. Do you share this concern? What other areas of Cypriot – British relations will be affected by Brexit in your view?

Οn tourism, this year has been a very good year for a number of reasons some of which related to UK, some related to Cyprus and some actually relate to thinks going on in the region.

It’s always difficult to be sure what the circumstances next year, or the year after will be. I think it will be important that Cyprus continues the efforts that it is already making to improve its tourism offer, if you like. It clearly has a large market of faithful tourists who come back, year after year and that’s a really important base and that helps to manage the effects in any given year like exchange rates or things going on elsewhere.

I can’t speak for British tourists, but I guess the reasons why they have come to Cyprus the previous years are still there. Cyprus will need to work to ensure that they continue to be there and Cyprus will still be competitive, because there other people who are trying to attract tourists. But the best way to ensuring that the answer to the question is “Yes, they will still come,” doesn’t depend only on British people, it also depends on what Cyprus does to attract them.

On other issues, the strength of the bilateral relationship between Cyprus and the UK – that more than applies in the case of some other EU member states as well– is much more in our relationship than the shared interest of EU membership as long as we have been EU members together. Cyprus didn’t start to become of interest to the United Kingdom at the point when it acceded to the EU. There are lots of links between them, people, commercial links, education, the UK bases here in Cyprus, the fact of the large population of Cypriots within the UK and British people living here. All these are still part of our relationship and are still important, giving dynamism, even after the UK is no longer in the EU.

 

5. Some say that Cyprus can gain some share from the City of London, when companies start leaving because of Brexit. Do these comments have real value?

Well, I think they probably do. We don’t know yet how many jobs, if any, will start to move away from the City with Brexit, but there are clearly companies that are starting to think whether they need to relocate at least some of their operations. And if they are doing it, then it makes sense for Cyprus to look whether it can attract any of those jobs that are relocated. If it does it has some advantages which make it a good place to look. The common law, the high educational standards here, the fact that so many professionals have UK related qualifications, also the geographic location can be an attraction. So, there are lots of reasons why Cyprus might be a good place for companies moving jobs away from the City. I think we will regret those jobs leaving the City, but if they become part of that network of the relationship between Cyprus and the UK, that’s not necessarily a bad thing.

 

6. You return to the High Commission in Nicosia after a four-year term (2010-2014). When you left, Cyprus had just entered the memorandum and now it is returning to the markets. What was your impression when you returned? How do you view the situation today?

Well, you are right. I left when Cyprus entered the financial programme, and maybe at the point when the process was at its most difficult. The decisions the steps that Cyprus was expected to take were very difficult ones, and when I came back two years later, those decisions had been taken and were being implemented. So early this year Cyprus, was able to emerge from the programme a little bit early.

What I see now is the data starting to move in the right direction. Growth figures this year are expected to be among the best in the EU, unemployment figures are starting to come down, also the issue of non-performing loans which is a big factor started moving in the right direction.

In a sense confidence is beginning to return. As far as I can see, people are starting to feel that paying the difficult choices has been worth while and is now putting the economy back on a stronger footing. What I hope will happen as that feeling strengthens, is that it will encourage people and make them feel that the growth is built not just on the same elements as before, but on new factors which can probably help to ensure the economy remains competitive in a potentially tougher future.

 

7. The efforts for reform of the Cyprus public sector has a British touch. You were personally involved in this effort. Do you see progress in this area?

Αs you say, we were involved in helping to get some of the structure reviews done in the ministries which is part of what the Troika want to be done, and some other horizontal reviews as well including the appraisal progress within the public sector. Within the ministries things are being done, at a different speed in different places to take some of those reviews and recommendations are implemented – a big topic at the moment, as you know, is the reform of the local government.

On performance appraisals there are laws under discussions in the parliament, which makes a really important difference I think.

What I hope people will feel is that, even assuming those laws get passed, even assuming that the recommendations for reform of local government happen, I hope then they will not say, “Ok, we can stop doing it,” because you can never really feel that.

Modernising your public service is something that needs to go on and on, because the challenges change, the opportunities change, the expectations that people have of the State, and the public service change. The way that the machine operates and the way that people operate need to continue to reflect expectations of them.

 

8. A new effort to resolve the Cyprus problem is underway. What is your view on how this will end? Do you think there are conditions for a positive outcome?

To answer it backwards, yes, I do think there are conditions for a positive outcome, and so I hope that is the outcome that we shall see. I think in a sense to go back to your question about what it is like coming back after some time away, I sense from the people that I talk to, that the negotiation process has moved forward a long way and that not just some of the easiest things, but most of the difficult things have been addressed effectively within negotiations which means what’s left now is the hardest of all.

Its really positive that the process has reached the point and the level of trust between the parties, that they can start to address even those really most difficult issues of all, as they did in Switzerland.

I think it is also true at the moment that some of the external factors which have always had an indirect impact on finding a solution to the Cyprus issue are now more favourable. I hope that means that indeed we can be near the end of the negotiating process and those last most difficult issues can be successfully resolved.

The one thing that I want to add is the importance of the period that will need to follow any political settlement agreement, if reached. That settlement agreement will need to be voted on, and then assuming that those votes are positive, much work will need to be done to prepare for implementation of any settlement agreement  Those are all big, complicated tasks so agreeing the settlement is not the end of the story.

 

9. Does Britain have a role to play? What is its contribution this time round? How high is the Cyprus priority in London’s agenda, especially now after the Brexit decision?

Ι don’t think the Brexit decision really makes much difference. We have always believed that we can make a contribution in support of these efforts.

We want to make that contribution because it matters to us, because we think it’s important to help to achieve the settlement.

There are specific bits of the work that directly relate to us as a guarantor power and all that is not affected by Brexit. It still matters to us just the same as before.

We want to continue to support the process under the guidance of the leaders. They know what help they need from outside, including from us or anybody else, and we want to be responsive to the suggestions on where we can make a useful contribution. We want to do our best because it matters to help get this agreement to happen.

 

10. – In 2004, Britain suggested to return part of the Bases as part of a Cyprus solution. Does this offer remain on the table? Is there a possibility of financial aid from Britain in the case of a solution?

The land offer does remain on the table and the British Government has repeated from time to time over the years that it’s still there. Moreover the reasons why we believed it could make a useful contribution still applys, so it’s still there.

A settlement will need funding, there is no question about that. Some of the funding you said might be needed could perhaps be provided in different ways in more innovative ways than were explored back in 2004, potentially involving the mechanism for fundraising that the private sector is used to deploying. The City of London is good at that sort of business so we suggested about a year ago that it will be helpful to explore the opportunities for that. This is a bit of help that we can offer in that field and we are doing it.

There will be other kinds of help that we can give. One of the things that we will expect to continue to give is our contribution to the UN Force and there may be a – I don’t know yet – direct financial support that we can give as well. But I think it is important to look at the question of support not just in terms of cash but in terms of some of the other kinds of support that the settlement will need as well, be they the UN, technical assistance, and expertise in some fields. There are so many different kinds of contribution we and the others can make which can help to make a settlement work.

 

11. All the protagonists in the Cyprus issue believe that natural gas is a catalyst towards resolving the Cyprus problem. Do you believe that without a solution the Republic of Cyprus will be able to fully utilise its natural resources?

Τhere are two parts of that question. There is the question of whether the Republic can continue the process of allocating licenses in its zone and our view is clear on that. Yes, we believe the Republic has its exclusive economic zone and the right to manage it in the way it has been.

The second part of the question though is more about the readiness of investors or companies to put an effort into exploiting the hydrocarbons that may be here. The Republic has to do whatever it can to make it attractive and encourage them to come.

But I think, it’s not just about the Republic or others like us saying it, it’s about what they want to do as well.

 

12. – What are the present priorities of the British High Commission in Cyprus? What are the main activities and events that dominate its agenda?

The settlement, Brexit and when I say Brexit I don’t just mean exit. I mean helping from the specific perspective of Cyprus to design the new set of relationships around the world, that the UK will need including the bilateral relationships with EU member states, which will become more important to us when we are not part of the club anymore.

So those things are really important because Cyprus is in an unstable part of the world, a difficult part of the world. The security collaboration that we have built up with the Republic over recent years is important to Cyprus and to us, and that will continue to be part of the High Commission’s job.

Of course, there are more to continue to do, in tourism, education, to preserve and develop the commercial relationships and more.

Finally it’s a pretty varied and complex agenda that we are involved in here, and I think that reflects the spread of the relationship between the two countries.

Source: Εurokerdos Magazine Issue 196, November – December  

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