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Ambassador Series

An Interview with John Koenig, U.S. Ambassador to Cyprus

Cyprus Ambassador John KoenigJohn Koenig, a career Foreign Service Officer, received his assignment as U.S. Ambassador to Cyprus in August 2012. Born in Tacoma, Washington in 1958, Koenig earned his B.A. in Anthropology from University of Washington and also earned his M.A. in Foreign Relations from Johns Hopkins University. He has represented the U.S. government in various capacities in Belgium, Greece, Indonesia, Italy, and the Philippines. Koenig first served in Cyprus as a political counselor at the U.S. Embassy from 1994 to 1997. He is married and has two sons.

The Politic: Why did you join the Foreign Service?

I was interested in working internationally. I grew up in a suburb of Tacoma, Washington, so I had a very normal childhood, but I had an opportunity to travel when I was young. I went to Pakistan with a family friend when I was about 13 or 14 years old. After that, I was an exchange student. So I was pretty determined that I wanted to have an international career. I studied anthropology as an undergraduate; I wanted to be an academic anthropologist. (You can kind of imagine; getting involved in ethnography.) But because of the market circumstances when I graduated, there was a glut of social science professors. I chose another path. I was also interested in public service, and I think that the combination of public service, international career and variety of postings have made the Foreign Service an outstanding choice for me.

The Politic: That makes perfect sense, especially your major in Anthropology, because I would imagine you have plenty of interactions with people with different personalities.

Absolutely. Culture and the way people understand and perceive things and each other is a very important dimension of the work that we do. It really helps to be able to bring forward not just empathy but understanding for other people’s points of view.

The Politic: Is there one experience, event, or person in your country who greatly influenced one or more of your policies?

Well, I would name two because they were probably the most important figures on the island at the time when I served here 15 or 18 years ago. First was the Greek Cypriot leader Glafkos Klerides, and the second was the Turkish Cypriot leader Rauf Denktaş. When I was here, most of our effort was focused on trying to achieve the most we could in terms of supporting a Cyprus settlement because of their great role in guiding their two communities over the years on the island.

The Politic: Speaking of the reunification process, the U.S. has traditionally advocated for the Turkish Northern Republic of Cyprus (TRNC) and the Greek, southern Republic of Cyprus to reunite as a bi-zonal, bi-communal federation after ethnic tensions caused a geographical divide. How would you assess the prospects for a reunification agreement?

Well, first, just let me say a word about terminology. We are pretty careful in the U.S. government to make clear that we only recognize the Republic of Cyprus, but we do engage with the two communities and their leaderships in order to find a Cyprus settlement. So we typically refer to the Republic of Cyprus and the Greek Cypriot and Turkish Cypriot communities.

We are very focused right now (the United States government and other international actors who support the settlement process) on supporting the two Cypriot sides — in this case, Nicos Anastasiades is on the Greek Cypriot side and Derviş Eroğlu is on the Turkish Cypriot side — to open a very successful round of negotiations beginning this fall. The procedure is managed by the U.N. and the U.N. Good Office of Mission. We look forward to a real, serious opportunity to move in a fairly rapid fashion toward a comprehensive settlement that would reunite the island.

The Politic: Do you imagine that the U.S. would have an advisory role during that process, or would United Nation facilitate the whole process?

The Americans will play an important role in the process. We have traditionally been supportive and engaged with the settlement efforts here on the island. The various parties, including the two Cypriot communities, are seeking a larger role for the United States in the upcoming settlement efforts, and we are interested in supporting the settlement process in any way we can. So we are likely to see an upgraded, more intensive U.S. involvement in the negotiations — bearing in mind that they really are negotiations between the two communities and that the U.N. provides the framework for the negotiations.

The Politic: Going back to the U.S.’s general programs in Cyprus and its activities thus far to support reunification, do programs for Greek and Turkish Cypriots differ from one another? Or do you take a “whole of country approach,” so there really are no differences?

We actually work to help the two sides deal with their differences and find common ground. Our assistance program (which involves both a public affairs program and U.S. Agency for International Development program) is focused on initiatives to help make progress toward the reunification of the island. For example, we are at the very beginning of common efforts for the Nicosia Master Plan, which was developed in order to not only let Nicosia as a divided city to function better, but also for Nicosia to prepare to be reunified and function as a unified city in the future. That work began twenty years ago or more.

We’re very active in supporting various kinds of inter-communal groups that focus on issues of common concern. We have helped to preserve cultural monuments across the island, working through committees of individuals (both Turkish Cypriot and Greek Cypriot) who carry that work forward with their respective authorities. So we focus on the two communities working together.

The Politic: In general, how can the U.S. best support Cyprus as it navigates its way out of its economic crisis?

We have been very closely engaged with our international financial partners in the transatlantic realm — the European Central Bank, the European Commission, the IMF, and our partners and friends in Europe — to understand and support an effort to rescue Cyprus from what was a really dire financial crisis earlier this year, one that had evolved since 2011. What the United States probably ought to focus on right now, what we are working on, is looking at areas where our private sector could become more engaged on the island, as an investor, as an exporter, and also as a provider of services. We have a lot of U.S. companies here already, as with the development of natural gas and other energy-related sectors, and there is the possibility for larger-scale investment in tourism. If you couple that with the serious, large and important role we already play in various business services, we think that there are prospects for substantial growth in our commercial relationship.

The Politic: During his presidential acceptance speech, Barack Obama stated his plan to tighten economic ties between the U.S. and the European Union, especially through upcoming negotiations over a free-trade deal. Assuming this deal goes through in the next few years, how would it impact relations between the U.S. and Cyprus?

John Koenig (left corner) at a lunchtime meeting at the Pentagon during his time as Acting U.S. Permanent Representative to NATO

John Koenig (left corner) at a lunchtime meeting at the Pentagon during his time as Acting U.S. Permanent Representative to NATO

It is really hard to predict exactly how the impact would look in Cyprus, but — if, as we would expect, the European and American economies grow closer together through progress and success on the Transatlantic Trade and Investment Partnership — you would then perhaps see larger interest of American companies in using Cyprus as a base for regional activities. You already see that to some extent. Cyprus has a very favorable tax regime, and it also has a large pool of highly skilled human capital with great training in business services and other desirable areas. So if we make progress and achieve this national objective of the TTIP, I believe we might see more engagement with Cyprus as a business center.

The Politic: Cyprus and the E.U. recently decided to help fund the bailout partly by taxing all people with bank deposits. Does the U.S. government have a particular opinion on this policy?

We do not. We watch it with great interest. It is an innovative approach to re-capitalizing the systemic banks for Cyprus. These are not banks that are systemic in the European system, do not get me wrong, but they are systemic for Cyprus. The two largest banks went through a radical restructuring and transformation as part of the bailout package. We think this is an innovative approach. We watch it closely to see what its effects are, how it can be sustained and carried through successfully. But we are not a member of the Eurozone, and we were not as a government directly involved in making a decision about any of the details with regard to bailout arrangements.

The Politic: Have you seen any effects of the bailout agreement on the ground in Cyprus? Of course it’s still early on, and, its effects are still starting to set in, but have you seen any changes in the national mood, any changes in how much people are spending?

Yes, absolutely. This country is going through a deepening economic crisis and it is gradually sinking into deeper recession. Naturally, this led Cypriots to be quite unhappy with the arrangements (at least at this stage), and there have been many complaints by Cypriots that the “bail-in” as they call it, the haircut of uninsured depositors, was unfair. They are also passing right now through a phase in which, in order to cope with the potential disruptions arising from the bailout agreement, they have had to impose capital controls (controls on the movement of money) which directly impact businesses of all sizes.

So what we have seen recently is a worsening of the unemployment situation, a rather sharp decline in demand at the retail level and at the wholesale level, and the closure of a lot of small businesses. We are following closely developments in the economy and expect that we will see a substantial contraction this year and next, and we very much support the efforts of the Cypriot government working with their international partners to ensure that the recession is not too deep or too long and that we can make a solid recovery.

The Politic: Do you imagine that the U.S. policy toward Cyprus would change if the economic crisis were to deepen? Are there measures your embassy could take to help the government deal with the worsening situation?

I do not think we would see a change in policy. We are quite actively engaged with them right now, and we are interested in understanding from their point of view what they would see from us as being helpful. The Department of the Treasury — right up to Secretary [Jack] Lew and also his under secretary Lael Brainard, and one of the assistant deputy secretaries Christopher Smith — are making sure that they follow these events, stay in close touch with the Cypriots and other European partners, and understand the right role for the United States in this crisis. We get ready to consider other measures that we could take. One of them, for example, has been a request that we consider modernizing or updating our bilateral tax treaty. But for the moment, we are just staying in close touch in order to understand how this situation is likely to evolve and what we might do to help all parties concerned.

The Politic: How do Cypriots think of the U.S., whether with regard to its politics, its culture, its people, or any other aspect?

Many Cypriots have studied in the United States. Over the decades, we have used our assistance money to sponsor a rather large-scale scholarship program for Cyprus, relative to the size of the island and its population. We had 20 to 40 students from Cyprus at the undergraduate and graduate level traveling to the United States with the support of the U.S. government to study. This has created a huge network of close relations between American-trained Cypriots who came back here and the United States, as well as their colleagues in the United States, us here in the embassy, and others. This is in addition to a more traditional Fulbright program and all the other things that happen on a private basis with students going off to the United States. That network has created great links between Cypriots and Americans.

We also have a large Cypriot-American community in the United States, mainly Greek Cypriots but also Turkish Cypriots, who strengthen our relations with the island. For the moment, at the political level, Cypriot communities look for more U.S. government involvement in the diplomatic efforts to find a Cyprus settlement. But more generally, the people of Cyprus are looking to be closer to the United States. They look to the United States as a business partner, as a leader in innovation, as a place where their friends and relatives live, and as a close friend and partner in a time when the Eastern Mediterranean region is troubled.

The Politic: Does the U.S. Embassy in Cyprus ever try to engage with the Cypriot diaspora in the United States, and if so, how?

Very, very much. This is not just us trying to engage with them, but a mutual activity where we try to engage with each other. Before I came out to Nicosia as ambassador, I had a series of meetings, and a number of those were with representatives of the diaspora community in the United States. (That includes both the Turkish Cypriot and Greek Cypriot organizations, although the Greek Cypriot organizations are larger and more active for the most part.)

We see them every time they visit the island. There are some prominent Greek Cypriot Americans, for example, and Turkish Cypriot Americans, who are engaged in settlement efforts, who are interested in events on the island, and who are trying to support closer business ties between Cyprus and the United States. We are interested in these issues ourselves, as an embassy. We find a lot to talk about and a lot to think about together to advance our relations.

The Politic: The relationship sounds mutually beneficial, but are there ever any issues over which Cyprus and the United States tend to clash or disagree?

Cyprus islandNot really. There are areas where we would like to see some improvements in Cyprus’ performance, and that holds true for the Greek Cypriot and government-controlled areas and the Turkish Cypriot areas as well. One of them that has received quite a bit of attention over the last several years is the issue of trafficking in persons. The Republic of Cyprus has made great strides in its efforts to combat the trafficking of persons, stamp out this crime, and deal supportively with victims. There is still room for improvement, and on the Turkish Cypriot side, there is large room for improvement. Their system of dealing with the issue lags far behind. So on issues like human trafficking, we would like to see some improvement, but basically this is a close partnership. We cooperate in combatting crime and terrorism, we work together to address the challenges of this region, and we look forward to stronger relations in the future.

The Politic: How do you feel that America is represented abroad in general, and are there any elements of American foreign policy that you would ever want to change?

I think the United States is represented very effectively abroad by the embassy. Of course, it is not only our embassies that represent us abroad. I think Americans who are living abroad or traveling abroad have a role in representing the United States in the places where they live — not necessarily for presenting the government position from Washington, but for helping people to understand how Americans behave and how they see the world. Americans are perceived as being open, friendly, and interested, and those are all good things.

Would I change something? I would love to see Americans more interested in international relations. This is something that is an issue here in Cyprus, for example. The Cyprus conflict has been around since ’63, ’64 at least, so it is now about 50 years old. Over time, Americans move on. They also have a lot of domestic issues that they need to consider. I would love to see Americans get more engaged in international relations, try harder to understand places like Cyprus or other areas where there are issues that need to be dealt with. Certainly the resources are out there, especially in this digital age, but sometimes it seems people are more preoccupied with things like Lindsay Lohan.

The Politic: What is your favorite part about living in Cyprus?

That is an excellent question. Let me tell you what is my favorite thing about coming back to Cyprus, because coming back to a place in the Foreign Service is a little unusual. I think the things I liked most about coming back to Cyprus were some of the changes I found here. I love this region; I have spent about 12 or 15 years of my professional life in the Mediterranean. What I loved coming back to Cyprus was, first of all, being with many friends that I knew before, so that was a constant; but also finding the tension of the island was much diminished, that people from the two communities were interacting with each other a lot more, and that we had a chance to maybe reconcile people with each other and work on a common future. It has been very fun to be back here as ambassador.

 

Embassy of the United States to Cyprus: http://cyprus.usembassy.gov

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