Nov./Dec. 2001 - The current escalation of tension between Greece and Turkey over the fate of Cyprus threatens to undermine alliances that are crucial to the successful prosecution of America's war on the Taliban regime in Afghanistan.

Recent events indicate that Turkey is using its newfound strategic relevance to the United States to reframe the terms of political negotiations on Cyprus. Just days after Turkey offered to send special forces to Afghanistan to aid the U.S.-led war effort, Turkish Prime Minister Bulent Ecevit made official Turkey's intent to annex northern Cyprus if the European Union allows the divided island republic to enter its ranks in next year's anticipated expansion. As European Commission President Romano Prodi recently announced, the EU will admit Cyprus in December 2002 with or without a settlement.

Turkey has initiated a high-stakes battle of wills with the EU, and neither side is likely to balk. The dispute could ultimately force the United States to choose sides between Turkey and the EU at a time when it desperately needs both.

Since the United States requires Europe's full political and moral support and Turkey's military bases and materiel?not to mention its symbolic role as the only Muslim democracy in the Middle East?to effectively achieve its objectives in Afghanistan and elsewhere, Washington has a direct interest in averting a Turkey-EU meltdown over Cyprus. The brokering of a final settlement in Cyprus before the EU votes to admit the country into its club at the end of next year is the only way to avoid a major crisis within the NATO alliance.

As the mixed outcomes of the peace accords in Northern Ireland (Good Friday Agreement, 1998) and the Middle East (Oslo Accords, 1993) demonstrate, the signing of a peace agreement does not guarantee peace. Once an agreement is signed, bold political leadership is necessary to implement it. Since peace agreements demand fundamental changes in social relationships, they are rarely implemented all at once. They are usually phased in over time so that antagonistic communities can adapt to change and build trust. Simply put, one cannot transform entrenched perceptions overnight.

As Cyprus President Glafcos Clerides and Turkish Cypriot leader Rauf Denktash return to the negotiating table, they will have to agree on more than whether a unified Cyprus government will have a "federal" or "confederal" structure. They will have to devise a settlement that adequately assuages the human suffering, both psychological and physical, that both sides have endured since intercommunal violence erupted in the country 38 years ago. In short, they will have to plan a prolonged transition period that will build peace in the hearts and minds of all Cypriots.

An effective transition in Cyprus will ease pain on both sides without making one side, either ostensibly or literally, triumphant over the other. Most importantly, it will help Greek and Turkish Cypriots realign their expectations with the reality of each other's needs. Although a transition may take several years to complete, it will work as long as Cypriots perceive that the process is moving forward.

The initial phase of a Cyprus transition should address four main issues: territorial readjustment; the three freedoms of movement, employment, and property; the economy in the north; and the settlers from Turkey.

The first step should include a territorial readjustment. The Turks have held onto the ghost town of Varosha, adjacent to Famagusta, with the intent of giving it back as part of a quid pro quo arrangement. The majority of Turkish Cypriots recognize that the north will have to return Varosha and other areas near the Green Line to the Greek Cypriots. The territorial readjustment will permit tens of thousands of the 200,000 Greek Cypriot refugees to settle in Varosha.

The crumbling city, however, will take years to rebuild and resettle, providing an important test for the Greek Cypriots, who will have to manage an emotional process that decides which refugees return to Varosha and which do not. As such, the experience will set a precedent for subsequent returns of refugees to the north.

The greatest challenge to the transitional period will be how to implement the three freedoms of movement, employment, and property demanded by the Greek Cypriots in the high-level agreement signed by Archbishop Makarios and Denktash in 1977. The EU and the Greek Cypriots have made clear that these three basic freedoms will have to be accepted in a unified Cyprus.

The implementation of these freedoms should occur in separate phases. Since the freedom of movement is the least controversial of the three, it should immediately follow any peace agreement. Both Greek and Turkish Cypriots hunger for greater interaction, but they will need time to build trust.

Traumatic memories of Christmas 1963 and years of living under fear of EOKA-B have made Turkish Cypriots wary of the three freedoms. Turkish Cypriots will need to trust Greek Cypriots again if they are to accept the return of Greek Cypriot refugees and workers to the north. Greek Cypriots have their own traumatic memories of TMT and the events of 1974 and will require assurances that a new Cyprus government will keep potential Turkish extremists in check. If the government can limit intercommunal violence, Greek and Turkish Cypriots may regain the confidence to live and work among each other.

The dire economic situation in the north and the growing income disparity between the two communities further underscore the need for a phased approach to the three freedoms. The current economic crisis in Turkey has only made the situation worse. Although Turkish Cypriots yearn for EU membership, their weakened economic condition has made them feel more vulnerable. They worry that the freedoms of employment and property will enable wealthier Greek Cypriots to buy out their businesses and land, and ultimately drive them off the island.

That is why a comprehensive economic development program in the north will have to precede Turkish Cypriot acceptance of the freedoms of employment and property. The EU has already signaled that it will pour the necessary resources into the country to facilitate the economic rejuvenation of the north.

Economic reform should occur immediately after a peace accord is signed. As income gaps between Greek and Turkish Cypriots begin to close, Turks will be less likely to view the freedoms of employment and property as existential threats. Greater economic equalization between Greek and Turkish Cypriots will eventually lead to the full implementation of the three freedoms.

Finally, there is the problem of the so-called settlers. The settler issue is intimately connected to the resettlement of refugees and to the principles of the three freedoms. It is where a unified Cyprus government may face its toughest battle.

The government currently demands that all Turkish settlers return to Turkey. Greek Cypriots will have to significantly amend that demand. Estimates on the number of settlers in the north range from 40,000 to close to 80,000, but those numbers are arbitrary until one defines what a "settler" is.

Identity politics are dangerous, and the Greek side would be ill advised to impose a definition of Cypriot nationality on the north. After all, Turkish Cypriots already consider many Turkish settlers to be Cypriot. Many settlers have intermarried with Turkish Cypriots over the years and have integrated into Cypriot life.

Given the right financial incentives, many recent settlers, who are mostly poor laborers from Anatolia, would return to Turkey. The Turkish side should agree to return as many of these settlers to Turkey as possible. In exchange, those who choose to remain in Cyprus should receive amnesty and Cypriot citizenship.

The clock is ticking in Cyprus. After 38 years of conflict and 27 years of de facto division, the current convergence of geopolitical interests may finally necessitate a settlement. As the U.S.-led war against international terrorism intensifies, such a settlement will be critical to a cohesive NATO alliance.

Ankara, Athens, and Nicosia must work under U.N. auspices, with vocal support from the U.S. and the EU, to support a determined and engaged negotiating process. In brokering an agreement, Greek and Turkish Cypriots must plan a balanced transition process that will rebuild trust on the island. A healthy transition will be the key to a lasting Cypriot peace.