The economic relations between turkish republic of northern cyprus and greek cypriot

administration of southern cyprus after joining the European Union

The economic relations between the Turkish Republic of Northern Cyprus (TRNC) and the
Greek Cypriot Administration of Southern Cyprus (GCASC) are complicated by the political
division of the island and the unresolved Cyprus question. The TRNC is only recognized by
Turkey, which provides significant financial and military support to the entity. The GCASC is
the internationally recognized Republic of Cyprus (RoC), which joined the European Union
(EU) in 2004. The EU does not recognize the TRNC, but considers it as a part of the RoC under
Turkish occupation.

The TRNC and the GCASC have very different economic structures and levels of development.
The TRNC's economy is based on services, especially tourism and higher education, and
depends heavily on Turkey for trade, investment, and aid. The GCASC's economy is more
diversified and integrated with the EU, and has a higher GDP per capita and a lower
unemployment rate than the TRNC. The GCASC also has access to the offshore hydrocarbon
resources around the island, which the TRNC and Turkey claim as well.

The economic relations between the two entities are limited and constrained by political and
legal obstacles. There is no direct trade or investment between them, and the movement of
goods and people across the Green Line that separates them is subject to restrictions and
regulations. The TRNC uses the Turkish lira as its currency, while the GCASC uses the euro.
The TRNC is excluded from the EU's customs union, single market, and common policies, and
faces trade barriers and sanctions from the RoC and the international community. The
GCASC, on the other hand, enjoys the benefits and obligations of EU membership, and
receives financial assistance from the EU for the development of the Turkish Cypriot
community.

There have been some attempts to improve the economic relations between the TRNC and
the GCASC, as well as between the TRNC and the EU, in the context of the peace process and
the confidence-building measures. For example, in 2003, the TRNC partially lifted the
restrictions on the crossing of the Green Line, allowing for increased contacts and exchanges
between the two communities. In 2004, the EU adopted the Green Line Regulation and the
Financial Aid Regulation, which aimed to facilitate trade and provide economic support to
the TRNC, respectively. However, these initiatives have not significantly changed the
economic situation of the TRNC, nor have they contributed to the resolution of the Cyprus
question.
The prospects for enhancing the economic relations between the TRNC and the GCASC, as
well as between the TRNC and the EU, depend largely on the political developments and the
willingness of the parties to engage in dialogue and compromise. The recent proposals by
Turkey and the TRNC to pursue a two-state solution for the island, rather than a bi-zonal, bi-
communal federation, have been rejected by the GCASC and the EU, and have increased the
tensions and mistrust between them. The discovery and exploration of the hydrocarbon
resources in the eastern Mediterranean have also added a new dimension of conflict and
competition to the economic relations between the TRNC and the GCASC, as well as between
Turkey and the EU. Unless a comprehensive and lasting settlement of the Cyprus question is
reached, the economic relations between the TRNC and the GCASC, as well as between the
TRNC and the EU, will remain limited and problematic.

Sources:

[An Island Divided: Next Steps for Troubled Cyprus | Crisis Group](^1^)

[Turkey’s interventions in its near abroad: The case of northern Cyprus](^2^)

[Two-state solution: A radical shift in the Cypriot conflict](^3^)

[Economy of Northern Cyprus - Wikipedia](^4^)

[Cyprus seeks to revive peace talks with Turkey over divided island](^5^)

Kaynak: Bing ile konuşma, 25.12.2023

(1) An Island Divided: Next Steps for Troubled Cyprus | Crisis Group.
https://www.crisisgroup.org/europe-central-asia/western-europemediterranean/cyprus/
268-island-divided-next-steps-troubled-cyprus.
(2) Turkey’s interventions in its near abroad: The case of northern Cyprus.
https://www.clingendael.org/sites/default/files/2022-05/Policy_brief_Turkeys_interventions
_Northern_Cyprus.pdf.
(3) Two-state solution: A radical shift in the Cypriot conflict.
https://studies.aljazeera.net/en/policy-briefs/two-state-solution-radical-shift-cypriot-conflict.
(4) Economy of Northern Cyprus - Wikipedia.
https://en.wikipedia.org/wiki/Economy_of_Northern_Cyprus.
(5) Cyprus seeks to revive peace talks with Turkey over divided island.
https://www.theguardian.com/world/2023/jul/18/cyprus-seeks-to-revive-peace-talks-with-
turkey.

Cyprus is an island that is divided into two parts: one is called TRNC and the other is called
GCASC. TRNC is only supported by Turkey, while GCASC is supported by the EU and most of
the world.
TRNC and GCASC have very different economies and do not trade or cooperate much with
each other. TRNC relies on Turkey for money and help, while GCASC is more connected to the
EU and has more opportunities and resources.
TRNC and GCASC also have different ideas about how to solve the problem of Cyprus. TRNC
and Turkey want to have two separate countries on the island, while GCASC and the EU want
to have one country with two regions that share power.
TRNC and GCASC do not trust or like each other, and they often argue and fight over many
things. One of the things they fight over is the gas and oil that is found in the sea around the
island. Both sides want to have more control and benefit from these resources.
The economic relations between TRNC and GCASC, and between TRNC and the EU, will not
improve unless they can agree on a solution for the problem of Cyprus. This is very hard to
do, because they have different interests and goals.