The island of Cyprus has been divided since the 1974 Turkish military invasion of the northern part of the island, occupying 37% of the island. The de facto military status quo has been brokered by a UN peacekeeping force (UNFICYP) and covers a large buffer zone. Separating both communities and the capital of Nicosia. The situation along the buffer zone has relatively been stable, with only some minor incidents reported over the last years. Since 1974 economic relations between the two parts have come to a complete standstill. The Republic of Cyprus intends to block all international trade by Turkish controlled Cyprus. The economic situation on both sides can be regarded as contradictory. The economy of the Republic of Cyprus has had a successful performance over the last decade, reflecting in a rapid growth and full employment conditions. Furthermore, the economy is ready to compete on the European market, when Greek-Cyprus joins the European Union next year. The economic situation in the Northern part can be considered as very weak, its economy has become totally dependent on Turkey and with the poor Turkish economic the situation in the north has become even worse.

Cross-border co-operation challenges

From both official government sites there have been no forms of cross-border co-operation. A border on Cyprus means as well a ceasefire line, and this makes cross-border co-operation nearly impossible. Moreover, the Republic of Cyprus does not recognize the Turkish Republic of Northern Cyprus and regards the present Turkish armed forces on Cyprus as an occupation force. Consequently, there has been no economic interaction between the two populations. The main cross-border-cooperation came from informal meetings organized by the international community. Especially, in the past decade where there has been a major development of bi-communal interaction between the two communities. This process is called 'citizen diplomacy', where bi-communal peace building groups work via inter-ethnic dialogue on public-opinion formation and questions the traditional ethnic discourse.

When the millennium approached, the traditional 'modern' discourses were challenged by developments such as the EU accession of Cyprus and the relatively bad economic situation in the North as well as the position of Turkey (both in relation with Greece and their ambition for joining the EU). These elements affected the perception of a great part of the population of both sides of the island, and which gained of significant importance over the last two years. In addition, many people grew up without knowing the dark site of the ethnic-conflict. They have been raised under ceasefire conditions, in an ethnically segregated society, and their personal life-experiences are less nationalistic and seem to open up the discussion of living together in peace. Back in January and February 2003, over one third of the population went on the streets to demonstrate for change after the failure of the United Nation Peace Plan for a united Cyprus. Hardly three months later Turkish-Cypriot authorities eased the restrictions on the border with Greek-Cypriot southern part of the island, which meant that for the first time since 1974 the people of Cyprus were free to move on their island. This abrupt development can be explained through the enormous pressure from both the international community including Turkey and perhaps also the will of the majority of of the people of both North and South Cyprus. This development showed more or less the changing character of the Cyrus issue and could be a promising development for a future settlement of it. EU accession, therefore, could potentially act as a catalyst because the institutional and discursive framework that the EU provides allows for the re-articulation and re-presentation of identities and thus could be seen as a challenge for a new future towards cross-border interaction.