VOA GREEK Kasoulides Kerry 5 10 13 News Report Greek

[Secretary Kerry]: It’s my great pleasure to welcome Foreign Minister Katsalidis of Cyprus, especially at such an important time. Cyprus is a very good friend of the United States, and we understand the deep economic challenges you’ve been facing. We want to be helpful in any way we can. We also look forward to working with you, President Anastasiades, and others to move Cyprus forward on one of the world’s frozen conflicts. I have personally spoken with the prime minister and foreign minister of Turkey, as well as the foreign minister of Greece and the president of Cyprus. We support a bi-zonal, bi-communal federation and hope to unfreeze this conflict for a resolution. The United Nations is also working towards this goal, and there may be opportunities in exploring Cyprus’s economic zone as part of a solution. Mr. Foreign Minister, I’m delighted to meet with you. You’re experienced in these matters, and I look forward to our discussion on all the issues of concern. [Foreign Minister Kasouidis of Cyprus]: Thank you very much, Mr. Secretary. I’m glad to have this meeting with you. I know you have a keen interest in our region, and I want to discuss the Cyprus issue in the broader context of the Eastern Mediterranean. We aim to play a stabilizing role in the region and work with our neighbors and the United States. Resolving our problem is our top priority, as having our country divided is a painful wound. We want to address the economy and natural gas issues separately but also see how they can reinforce each other. [Secretary Kerry]: Absolutely. We look forward to our discussion. Thank you all very much. Let’s find some time to talk. Thank you for coming. [Foreign Minister Kasoulidis of Cyprus]: Exploitation of a similar economic zone based on the law of the sea with Israel, Egypt, and Lebanon, all of which border us and also Israel. Broader cooperation in this domain with all four countries in the future will significantly contribute to stability in our region. The fact that we are the most predictable country in terms of relations with Israel adds a new dimension and balances issues concerning the main allies of the US, Turkey on one side, and Israel on the other. This must also be considered in the type of solution to the Cyprus issue that could emerge. [VOA Reporter]: How much does the specific economic situation affect the talks for the Cyprus issue, and are there any new approach suggestions? [Foreign Minister Kasoulidis of Cyprus]: The solution to the Cyprus problem will incur short-term costs. However, this is true whether we are in an economic crisis or not. We do not want our current economic situation to be associated with efforts to solve the Cyprus issue, as it creates other associations and the impression that one has been done in service to the other. They are two parallel roads. However, roads that can reinforce each other, as I have made clear to Secretary of State Mr. Kerry. [VOA Reporter]: A question about Russia. Until recently, Moscow and Nicosia enjoyed deep economic and political ties that went well beyond the banking sphere. How serious was the damage inflicted on this special relationship by the European bailout of the Cypriot banking system, and what is the future of these relations? [Foreign Minister Kasoulidis of Cyprus]: I’m sure Moscow understands that the problem created by the Eurogroup’s decision was not an issue of choice for Cyprus. But apart from the financial system, which involves depositing money into banks, what Cyprus and Russia are likely to maintain is Cyprus as a business center from where Russian companies will continue to operate under the good judicial system that exists in Cyprus and the services that Cyprus can offer by its professional people, many of whom are Russian-speaking. I don’t think this will be affected, and it will be mutually beneficial to both Cyprus and Russia, as Russian money that comes from Cyprus, according to the double taxation agreement, returns to Russia and is invested there. Thank you. One last question about Turkey. Recently, UN Special Representative Alexander Downer had talks with both sides in Cyprus. Are you hopeful that negotiations between Turkey and Cyprus will start in 2018? My answer is definitely yes. The negotiations will begin in autumn 2013. The reason we are asking for a few months to wait is that President Anastasiades wants to concentrate on finding answers to the many problems that the citizens of the Republic of Cyprus are facing due to the economic crisis. Once this is in order, there is no reason why the talks could not proceed.