Rejection of the Annan plan of Cyprus in 2004, which intended to craft a European Union member federal state, did not only prevent the EU to bring an end to the stubborn frozen conflict of Cyprus in the pre-accession period but also raised new questions on the capacity of the EU to utilize its tools (e.g. Enlargement) towards achieving its objectives. For the post-accession period, the EU decided to pursue greater involvement in Cyprus and actively facilitate conflict resolution with a strategy alternative to the ‘track 1 diplomacy’: Promoting economic integration and linkages between the two sides of the divide. The strategy has been promotion of Europeanisation with a liberal peace basis, and the main mechanism has been the adopted Green Line Regulation, which enables and regulates movement of goods, services and people across the divide. This paper engages with the literature on Europeanisation and Liberal Peace to evaluate the EU’s capacity to facilitate conflict resolution by promoting Europeanisation and economic interdependence based on the example of Cyprus. The argument advanced is that although the EU’s post-accession involvement in Cyprus had a potential to bring a de facto peace in daily life and reduce the challenge of political solution towards a level of technicality, the strategy failed to fulfil its objective. This is due to a broad range of political, technical, and discursive impediments; which are linked to i) the characteristics of the contested statehood and role of ethno-politics, ii) scope and coverage of the Green Line Regulation, iii) limited institutional capacity to apply the EU’s rules in production. The paper draws on primary and secondary sources as well as interviews with EU and local elites.
