Cyprus reunification ‘worth 20 billion euros’

A wall marking the boundary of the UN buffer zone is seen. A study foresees reunification island would gain 20 billion euros for island’s economy. REUTERS Photo

A study prepared by Turkish and Greek Cypriot economists predicts that a peace deal would generate 20 billion euros for the divided island, by expanding the size of their economies Cyprus reunification deal would generate a 20-billion-euro ($27.2 billion) peace dividend for the recession-hit island, according to a study released.

The study predicts an elusive UN-brokered peace deal would raise per capita incomes by approximately 12,000 euros, expand the size of the economy by around 20 billion euros and add an average 2.8 percentage points to real GDP growth every year for 20 years.

A deal would almost eliminate the per-capita income disparity between Turkish Cypriots and relatively more well off Greek Cypriots, said the study by local economists.

“In the past, the tendency has been to see the costs and benefits of a solution in a static way: There was an appreciation of the immediate costs, but there was little understanding of the dynamic benefits,” said the “Cyprus Peace Dividend Revisited” report.

Turkish market advantages

It was compiled by Cyprus-based economists Fiona Mullen, Alexander Apostolides and Mustafa Besim, and funded by Sweden, Denmark, Finland and Norway.

The research is based on agreement being achieved in 2016 for a bi-communal, bi-zonal federation with political equality, as outlined in a February 2014 joint declaration.

“Both sides of the island would benefit from a ‘peace dividend’ that will come from two sources: recurring benefits from opening up the Turkish market of 74 million people to Greek Cypriots and the European Union market of 500 million people to Turkish Cypriots.” 

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