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Factba.se: Australia DFAT Country Briefs - Cyprus


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Relations between Australia and the Republic of Cyprus are underpinned by strong people-to-people links. The strength of the relationship stems from the ties developed by Cypriot migration to Australia, common British institutional inheritances, joint membership of the Commonwealth and Australia's long standing support of United Nations efforts to find a just and permanent solution to the Cyprus dispute.

Australia supports the sovereignty and territorial integrity of the Republic of Cyprus and recognises the Republic as the only legitimate authority on the island. The Australian Government urges all parties to continue constructive efforts aimed at resolving the Cyprus dispute.

The Australian Government has maintained a Special Representative for Cyprus since 1998. The present Special Representative, Ambassador to France, David Ritchie, was appointed in July 2008. Mr Ritchie has undertaken a series of international and domestic consultations in support of efforts to secure a lasting solution to the Cyprus dispute.

Australian police officers have served continually as part of the United Nations Peace-keeping Force in Cyprus (UNFICYP) since 1964, making a valuable contribution to the maintenance of peace and stability on the island. There are currently 15 Australian Federal Police officers serving with UNFICYP.

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The government of the Republic of Cyprus comprises an executive President - who is directly elected for a five-year term - and a unicameral legislative arm, the House of Representatives. The current President, Mr Demitris Christofias, was elected in February 2008. The President appoints the Council of Ministers, who may not be members of the House of Representatives.

The House of Representatives consists of 80 members, elected by a form of proportional representation for a five year term. Fifty-six seats are occupied by Greek Cypriots, with the remaining 24 reserved for representatives of the Turkish Cypriot community (although not occupied since 1963). Elections held in May 2011 saw the government returned, though it lost its absolute majority.  Senior coalition partner AKEL (left-wing Party of the Progressive Working People, formerly known as the Communist Party) along with opposition DISY (Democratic Rally Party) were confirmed as the dominant blocks, securing 19 and 20 seats respectively.  AKEL’s coalition partner DIKO (centre-right Democratic Party), suffered a slight loss, securing 9 seats. The Social Democrats (EDEK) held onto its 5 seats, the European Party (EVROKO) won 2 seats and the Ecologists and Environmentalists kept its seat.

President Christofias completed his second post-election  cabinet reshuffle on 5 August after DIKO left the coalition over the government’s handling of a major explosion of confiscated munitions at the Florakis naval base on 11 July, which took out Cyprus’ main power station.  The explosion halved Cyprus’ electrical output and exacerbated  the island’s already difficult economic situation.. 

The island of Cyprus entered the European Union (EU) on 1 May 2004 with the EU customary law (acquis communautaire) suspended in the northern part of the island, the area administered by the Turkish Cypriots.

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The final period of British rule in Cyprus saw a bitter deterioration in relations between the Greek Cypriot and Turkish Cypriot communities. In 1960 the Republic of Cyprus became independent under a Constitution which provided for a power sharing arrangement between Greek Cypriots and Turkish Cypriots. Britain, Greece and Turkey became the guarantors of Cyprus' independence and territorial integrity. Friction between Greek Cypriots and Turkish Cypriots intensified in 1963 after President Makarios sought to amend the Constitution. This was viewed by the Turkish Cypriots as an attempt to destroy their guaranteed community rights and they withdrew from the government. Inter-communal fighting broke out and most of the Turkish Cypriot population withdrew to a small number of armed and segregated enclaves. An uneasy truce was maintained by the establishment in April 1964 of a UN Peacekeeping Force in Cyprus (UNFICYP) which included the first Australian police contingent.

The succeeding years saw little decrease in tensions. A coup against President Makarios on 15 July 1974 organised by the Greek military junta, aimed at uniting Cyprus with Greece, was the trigger for Turkish troops landing in Cyprus and eventually occupying the northern part of the island (37 per cent). This was accompanied by a large population movement, with around 160,000 Greek Cypriots moving south and 50,000 Turkish Cypriots moving north. The island has remained divided ever since. In 1975 Turkish Cypriot authorities unilaterally declared the area to the north the 'Turkish Federated State of Cyprus.' This was renamed in November 1983 the 'Turkish Republic of Northern Cyprus (TRNC)'. No country other than Turkey recognises the 'TRNC'.

The United Nations has made extensive efforts over the intervening years to negotiate the reunification of the island. The election of President Christofias in February 2008 served as the impetus for the UN to encourage both parties to reopen unification negotiations, which began again on 3 September 2008. Conducted under the auspices of the UN Special Adviser for Cyprus, Alexander Downer, the negotiations aim to find a mutually acceptable solution with the agreed objective of establishing a bi-zonal bi-communal federation with political equality and a single international personality, which would safeguard the fundamental and legitimate rights and interests of both communities.

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The Republic of Cyprus has a population of just over 800,000 and there are estimates that the population in the 'TRNC' is just under 250,000. Cyprus has a GDP of US$25 billion and an estimated GDP per capita of US$30.003. Principal export destinations are Greece, Germany and the UK, while the main import sources are Greece, Italy and Germany.

Cyprus joined the Eurozone on 1 January 2008.  After the 2009 recession and the slow turnaround in 2010, the government’s focus in 2011 on economic growth and security  was undermined by the loss of Cyprus’ main power station after a major explosion of confiscated munitions at the Florakis naval base on 11 July.  The event prompted a two-notch credit downgrading of the Cyprus economy to Baa1 and a reduced growth forecast from 1.5 to 0.5 per cent in 2011.  The government’s attention is now focussed on fast-tracking economic austerity measures to avoid an EU bail-out.

Long-term challenges facing the government include a large public sector wage bill and a drop in revenue generated from tourism and property sales (largely due to low British interest in tourism and property). Unemployment rose to  to 7.4 per cent in early 2011, the highest ever recorded.

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In May 2011, Governor General, HE Quentin Bryce, AC welcomed the Cypriot President, HE Mr Demetris Christofias, to Australia as Guest of Government.  He had previously visited Australia in March 2005 in his role as Speaker of the House of Representatives at the invitation of the Australian Parliament Presiding Officers.  Then Cypriot Minister of Foreign Affairs, HE Mr Markos Kyprianou, visited Australia in March 2009.  The former Minister for Education and Culture, the late Mr Pefkios Georgiades, led the Cyprus delegation to the Melbourne Commonwealth Games in March 2006.

The Minister for Foreign Affairs, the Hon Stephen Smith MP, visited Cyprus in October 2008. The Hon Mike Rann MP, Premier of South Australia, visited in May 2007 and a parliamentary delegation led by Senator George Brandis visited in July 2006.

The Cypriot community in Australia is the second largest outside Cyprus after the United Kingdom. The 2006 Census recorded 18,381 Cyprus-born people in Australia, concentrated predominantly in Victoria and NSW. Greek Cypriots migrated to Australia in three waves: during the nineteenth century gold rushes; between 1924 and 1964; and after the 1974 Turkish intervention. Turkish Cypriot migration to Australia began in the mid-twentieth century.

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Trade between Australia and Cyprus is small, due to a combination of distance, lack of direct freight linkages, and the small size of the Cypriot market. Cyprus' accession to the EU also resulted in loss of markets for lamb and beef. However, Australia has successfully established a foothold in such niche markets as wine, processed foodstuffs and pharmaceuticals.

In 2010, the value of Australian exports was approximately A$9 million, equal to the value of Cypriot exports to Australia.  Australia's trade in services with Cyprus is negligible.  In recent years, our largest export items have been medicaments, paper and paperboard, and coke and semi-coke.  Major Cypriot exports to Australia are medicaments, cheese and curd products and pharmaceutical products.

Bilateral investment is also small, with the principal areas of activity being mining and banking.  The Marfin Popular Bank Group and the Bank of Cyprus have established branches in Australia.

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The 'Turkish Republic of Northern Cyprus' is a mixed presidential/parliamentary system with political power shared between the 'President' and 'Prime Minister'. The 'President' is elected for a five-year term and has the power to propose legislation or return it to the 50-seat 'National Assembly'. At elections on 18 April 2010 Mr Dervis Eroglu ('Prime Minister' since April 2009) was elected 'TRNC' 'President' with just over 50 per cent of the vote. He was inaugurated on 23 April. A long-time advocate of the two-state solution, Eroglu appears to have tempered his views and resumed negotiations on the reunification of Cyprus on the basis of the parameters defined by the United Nations – a bi-zonal, bi-communal federation with political equality and a single international sovereignty.

At the 'TRNC parliamentary elections' held in April 2009, the National Unity Party (UBP) won 26 seats in the 'National Assembly'. The Republican Turkish Party (CTP) won 15 seats, the Democratic Party (DP) 5, the Freedom and Reform Party (ORP) 2 and the Social Democracy Party (TDP) 2 seats. Following a number of changes since then, including the need to fill the vacancy left after the resignation of Dervis Eroglu to take up the 'presidency,' the political make-up of the 'Assembly' is now UBP 24 seats, CTP 15, DP 2, ORP2, TDP 3 with 4 independents. Mr Irsen Kucuk replaced Eroglu as 'Prime Minister' on 17 May 2010.

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The 'TRNC' economy is much smaller and more narrowly based than its southern counterpart. Economic growth tends to be volatile, given the north's relative isolation, over-large public sector, reliance on the Turkish Lira, and small market size. Agriculture and services together employ more than half of the work force. Per capita incomes in the north are, on average, 50 per cent less than those in the south. GNP in the 'TRNC' is estimated to be around US$1.5bn due to stringent policing of restrictions on its external economic activity.

The 'TRNC' is heavily dependent on Turkey for credits, grants and trade, and to fund a range of subsidies that are needed as a result of external sanctions. Reliance on the Turkish Lira also means there is no effective local control over monetary policy. The economy is therefore vulnerable to currency shocks from Turkey and imports Turkish inflation. Exports are thin, and likely to remain so due to limited direct trade with the EU and other markets. As well as fiscal transfers from Turkey, the economy has been sustained by real estate and construction, tertiary education services, tourism, gambling and related services. The local authorities see tourism development as a major hope, but the lack of direct air-links to potential markets is a major constraint and tourist numbers are quite low. In early 2011 private sector economic activity was in decline with small-scale construction at a virtual stand-still due to legal developments regarding Greek Cypriot property and land. The imposition of stringent austerity measures on grant funding by the Turkish government has been vehemently opposed by a number of union and community groups.

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Last Updated: September 2011

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