NICOSIA (AFP)--A reunited Cyprus would cost EUR9 billion, with international donors having to plug a EUR1-billion shortfall to fund a settlement, according to a study released Thursday.
In the independent report published by the local branch of the International Peace Research Institute in Oslo, three Cyprus-based economists focus on the investment needed to implement any peace deal.
"If you look at it rationally, there are ways of financing a solution without the country going bust," said Fiona Mullen co-author of "Reconstructing a Reunited Cyprus."
"Cyprus has lots of sources of finance. It's in the euro zone and has a stable economy. Even in the current global environment, there are plenty of sources to finance a solution," she added.
The report calculates that Cyprus could also receive an additional EUR600 million euros in non-refundable grants from Brussels if re-defined as two statistical regions.
This amount is not included in the estimated total borrowing requirement of EUR9 billion.
Public and private investment is put at around EUR7.2 billion for new housing, renovation and infrastructure projects in moves to unify the road, electricity and communication networks.
The report includes a rough estimate on property compensation based on paying back interest on bonds, although much will depend on any final settlement.
Most of the refinancing would come from Greek, Turkish and Cyprus banks as well as the European Investment Bank, but the shortfall would depend on the "willingness of the international community," the report says.
Source: Dow Jones Newswires
Dominic Farrell
