An in-depth study has been launched to look into funding a Cyprus solution, with the IMF, World Bank and EU institutions concentrating on preparations for a united island, Cyprus Weekly has reported.
“The areas [to be covered by the institutions] will include all economic aspects, including but not limited to: united Cyprus public finances, island-wide EU harmonisation, fiscal federalism, banking-sector stability, Euro introduction across the island, taxes and the financing of a property settlement,” the UN spokesperson’s office told Cyprus Weekly.
Although there have been no official figures yet, a major issue is how to finance property compensation. Estimates have run into tens of billions of Euros.
“The overall cost of compensation claims depends on the final outcome of the property negotiations … We therefore have no official figures at present,” said the UN.
Another concern is that a federal system of government could create an expensive and unwieldy ‘three-headed hydra’, as some have described it.
“It is also important that the political structures being developed are cost efficient and transparent … This will avoid, for instance, costly overlaps and can also contribute to overall efficiency of the system,” said the UN office.
Estimates of the cost of a settlement published by the Peace Research Institute Oslo (PRIO) say that the first 20 years would require 20 billion euros.