Thursday, 20 January 2011

Creating dangerous precedent to save an ailing airline

The government has recently announced plans to compensate Cyprus Airways for Turkey’s refusal to open its airspace to our former national carrier, in order to save it from bankrupcy. The amount of 20 million euro is not insignificant, especially when one considers that the government is facing a very real crisis of excessive borrowing, having very recently borrowed 60 million euro from domestic banks in order to cover its immediate cash needs.

I am not going to raise issues whether this is against EU rules that forbid aiding former state airlines (it clearly us), or if it is a wise use of government money at a time of necessary frugality. I am not even going to comment on how the airlines’ real issue has not been the closed airspace but rather the overstaffed and inefficient practises that it inherited in its days as a government company, and its continued unwillingness (or ineffectiveness) in tackling them.

What I want to raise is the fact that this decision, taken in order to save Cyprus airways from bankruptcy, undermines our position in the negotiation of the Cyprus problem. Our position has always been clear that compensation for the events since 1974 should not arise from those who suffered, but by those who caused it. As a result we have always insisted that Turkey should, in one way or another, shoulder the blame for the loss of the right to use properties in the occupied area.

Yet with the decision of the republic of Cyprus to compensate Cyprus airways for Turkey’s intransigence we set up the dangerous precedent, where we pay for Turkey’s decisions! At one stroke, a not well thought out decision made to save an ailing company has undermined our ability to ask turkey for any kind of compensation, since we have shown our willingness to pay for such costs ourselves. To save Cyprus airways, have unintentionally killed off our claims to any compensation for Turkey’s actions, since we are prepared to compensate the parties damaged by such actions ourselves.

Unfortunately this is not the only time where spasmodic decisions led to dangerous precedents. The decision by Greek-Cypriot insurance companies not to compensate for accidents in the occupied area, and the state’s acceptance of this, means that the Republic of Cyprus has tacitly and unintentionally accepted that there are two separate identities in Cyprus, since a purchased island-wide insurance document does not cover the occupied areas. We consonantly say the Cyprus problem is our first and foremost priority, but constantly undermine it unintentionally through badly thought out policies.

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