Cyprus

A former British colony, Cyprus became independent in 1960 following years of resistance to British rule. Tensions between the Greek Cypriot majority and Turkish Cypriot minority came to a head in December 1963, when violence broke out in the capital of Nicosia. Despite the deployment of UN peacekeepers in 1964, sporadic intercommunal violence continued forcing most Turkish Cypriots into enclaves throughout the island.

In 1974, a Greek Government-sponsored attempt to seize control of Cyprus was met by military intervention from Turkey, which soon controlled more than a third of the island. In 1983, the Turkish Cypriot-occupied area declared itself the "Turkish Republic of Northern Cyprus" ("TRNC"), but it is recognized only by Turkey. The election of a new Cypriot president in 2008 served as the impetus for the UN to encourage both the Greek Cypriot and Turkish Cypriot communities to reopen unification negotiations.

In September 2008, the leaders of the two communities began discussions under UN auspices aimed at reuniting the divided island. The talks are ongoing. The entire island entered the EU on 1 May 2004, although the EU acquis - the body of common rights and obligations - applies only to the areas under the internationally recognized government, and is suspended in the areas administered by Turkish Cypriots. However, individual Turkish Cypriots able to document their eligibility for Republic of Cyprus citizenship legally enjoy the same rights accorded to other citizens of European Union states.

party to:

Air Pollution, Air Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulfur 94, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Wetlands

signed, but not ratified:

none of the selected agreements

chief of state:

• President Nicos ANASTASIADES (since 28 February 2013);
• note - the president is both the chief of state and head of government;
• post of vice president is currently vacant;
• under the 1960 constitution, the post is reserved for a Turkish Cypriot

head of government:

President Nicos ANASTASIADES (since 28 February 2013)

cabinet:

Council of Ministers appointed jointly by the president and vice president; (For more information visit theWorld Leaders website)

elections:

president elected by popular vote for a five-year term; election last held on 17 and 24 February 2013 (next to be held in February 2018)

election results:

• Nicos ANASTASIADES elected president;
• percent of vote (first round) - Nicos ANASTASIADES 45.46%, Stavros MALAS 26.91%, Giorgos LILLIKAS 24.93%, other 2.7%;
• (second round) Nicos ANASTASIADES 57.48%, Savros MALAS 42.52%

note: Dervis EROGLU became "president" of the "TRNC" on 23 April 2010 after "presidential" elections on 18 April 2010; results - Dervis EROGLU 50.4%,

Mehmet Ali TALAT 42.9%; Sibel SIBER is "TRNC acting prime minister"

area under government control:

Democratic Party or DIKO [Marios KAROYIAN (Garoyian)]; Democratic Rally or DISY [Nicos ANASTASIADES]; European Party or EURO.KO [Demetris SYLLOURIS]; Fighting Democratic Movement or ADIK [Dinos MIKHAILIDES]; note - now part of Democratic Party or DIKO; Green Party of Cyprus [George PERDIKIS]; Movement for Social Democrats or EDEK [Yiannakis OMIROU]; Progressive Party of the Working People or AKEL (Communist Party) [Andros KYPRIANOU]; United Democrats or EDI [Praxoula ANTONIADOU]

area administered by Turkish Cypriots:

Communal Democracy Party or TDP [Mehmet CAKICI]; Cyprus Socialist Party or KSP [Yusuf ALKIM]; Democratic Party or DP [Serdar DENKTAS]; Freedom and Reform Party or ORP [Turgay AVCI]; National Unity Party or UBP [Irsen KUCUK]; Nationalist Justice Party or MAP [Ata TEPE]; New Cyprus Party or YKP [Murat KANATLI]; Politics for the People Party or HIS [Ahmet YONLUER]; note - joined the National Unity Party in 2010; Republican Turkish Party or CTP [Ozkam YORGANCIOGLU]; United Cyprus Party or BKP [Izzet IZCAN]

• white with a copper-colored silhouette of the island (the name Cyprus is derived from the Greek word for copper) above two green crossed olive branches in the center of the flag;
• the branches symbolize the hope for peace and reconciliation between the Greek and Turkish communities

note: the "Turkish Republic of Northern Cyprus" flag retains the white field of the Cyprus national flag but displays narrow horizontal red stripes positioned a small distance from the top and bottom edges between which are centered a red crescent and a red five-pointed star;

the banner is modeled after the Turkish national flag but with the colors reversed

The area of the Republic of Cyprus under government control has a market economy dominated by the service sector, which accounts for four-fifths of GDP. Tourism, financial services, and real estate are the most important sectors. Erratic growth rates over the past decade reflect the economy's reliance on tourism, the profitability of which can fluctuate with political instability in the region and economic conditions in Western Europe.

Nevertheless, the economy in the area under government control has grown at a rate well above the EU average since 2000. Cyprus joined the European Exchange Rate Mechanism (ERM2) in May 2005 and adopted the euro as its national currency on 1 January 2008. An aggressive austerity program in the preceding years, aimed at paving the way for the euro, helped turn a soaring fiscal deficit (6.3% in 2003) into a surplus of 1.2% in 2008, and reduced inflation to 4.7%. This prosperity came under pressure in 2009, as construction and tourism slowed in the face of reduced foreign demand triggered by the ongoing global financial crisis.

Although Cyprus lagged behind its EU peers in showing signs of stress from the global crisis, the economy tipped into recession in 2009, contracting by 1.7%, and has been slow to bounce back since, posting anemic growth in 2010-11 before contracting again by 2.3% in 2012. Serious problems surfaced in the Cypriot financial sector in early 2011 as the Greek fiscal crisis and euro zone debt crisis deepened.

Cyprus's borrowing costs have risen steadily because of its exposure to Greek debt. Two of Cyprus's biggest banks are among the largest holders of Greek bonds in Europe and have a substantial presence in Greece through bank branches and subsidiaries. Cyprus experienced numerous downgrades of its credit rating in 2012 and has been cut off from international money markets.

The Cypriot economy contracted in 2012 following the writedown of Greek bonds. A liquidity squeeze is choking the financial sector and the real economy as many global investors are uncertain the Cypriot economy can weather the EU crisis. The budget deficit rose to 7.4% of GDP in 2011, a violation of the EU's budget deficit criteria - no more than 3% of GDP. In response to the country's deteriorating finances and serious risk of contagion from the Greek debt crisis, Nicosia implemented measures to cut the cost of the state payroll, curb tax evasion, and revamp social benefits, and trimmed the deficit to 4.2% of GDP in 2012.

In July, Nicosia became the fifth euro zone government to request an economic bailout program from the European Commission, the European Central Bank, and the International Monetary Fund - known collectively as the "Troika". Negotiations over the final details of the plan are ongoing.

Economy - overview:

The Turkish Cypriot economy has roughly half the per capita GDP of the south, and economic growth tends to be volatile, given the north's relative isolation, bloated public sector, reliance on the Turkish lira, and small market size. The Turkish Cypriots are heavily dependent on transfers from the Turkish Government. Ankara directly finances about one-third of the Turkish Cypriot "administration's" budget. Aid from Turkey has exceeded $400 million annually in recent years. The Turkish Cypriot economy experienced a sharp slowdown in 2008-09 due to the global financial crisis and to its reliance on British and Turkish tourism, both of which declined due to the recession. The Turkish Cypriot budget deficit also deteriorated in 2009 due to decreased state revenues and increased government expenditures on public sector salaries and social services. The Turkish Cypriot economy declined about 0.6% in 2010.

GDP (purchasing power parity):

$1.829 billion (2007 est.)

GDP - real growth rate:

-0.6% (2010 est.)

GDP - per capita:

$11,700 (2007 est.)

GDP - composition by sector:

agriculture:

8.6%, industry: 22.4%, services: 69.1% (2006 est.)

Labor force:

95,030 (2007 est.)

Labor force - by occupation:

agriculture:

14.5%, industry: 29%, services: 56.5% (2004)

Unemployment rate:

9.4% (2005 est.)

Population below poverty line:

%NA

Inflation rate:

11.4% (2006)

Budget:

revenues:

$2.5 billion, expenditures: $2.5 billion (2006)

Agriculture - products:

citrus fruit, dairy, potatoes, grapes, olives, poultry, lamb

Industries:

foodstuffs, textiles, clothing, ship repair, clay, gypsum, copper, furniture

Industrial production growth rate:

-0.3% (2007 est.)

Electricity production:

998.9 million kWh (2005)

Electricity consumption:

797.9 million kWh (2005)

Exports:

$68.1 million, f.o.b. (2007 est.)

Export - commodities:

citrus, dairy, potatoes, textiles

Export - partners:

Turkey 40%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited

Imports:

$1.2 billion, f.o.b. (2007 est.)

Import - commodities:

vehicles, fuel, cigarettes, food, minerals, chemicals, machinery

Import - partners:

Turkey 60%; direct trade between the area administered by Turkish Cypriots and the area under government control remains limited

Reserves of foreign exchange and gold:

$NA

Debt - external:

$NA

Currency (code):

Turkish new lira (YTL)

Exchange rates:

Turkish new lira per US dollar:

1.67 (2011) 1.5 (2010) 1.55 (2009) 1.32 (2008) 1.32 (2007)