Ministry of National Infrastructures director general Shaul Tzemach is promoting an initiative for Israel and Cyprus to hold a joint campaign across the US to attract large investors for the two countries’ developing natural gas industry. As in every successful relationship, each side in this promising partnership has advantages that complement each other: Israel brings (relative) economic stability, the ability to protect the reserves and offshore facilities, and a capital market hungry to raise capital for gas and oil companies. Cyprus brings international connections, political stability under EU protection, available land, and an attractive tax regime that has never heard the name Eytan Sheshinski.
Such an idea would have been fantastical not long ago: Israel has never considered Cyprus to be a hostile country, but neither has it considered it an ally. The fact that the initiative is seriously being considered is an indication of how tight relations between Israel and its Greek speaking neighbor across the sea have become.
“The improvement in relations has been fantastic,” Cypriot Ambassador to Israel Dimitris Hatziargrou told “Globes” in an interview. The enthusiasm is understandable: this business opportunity fell into Cyprus’ hands in the nick of time, as the country tries to rehabilitate itself following an explosion that damaged its main power station, and as the Greek debt crisis storm threatens to reach Cyprus’ coast.
On December 17, 2010, Israel and Cyprus signed an agreement to demarcate their maritime exclusive economic zone (EEZ) border. This agreement is crucial for Israel since Israel needs the UN to recognize its waters as an “exclusive economic zone.” This recognition could prevent claims from hostile parties, like Lebanon or Hizbullah, which claim the gas reserves belong to Lebanon. Moreover, the signing of the political agreement with Cyprus demarcated Israel’s second maritime border with one of its neighbors (after Jordan in 1994). As long as we are dealing with symbolism, since this past December, Israel is an official neighbor of the EU, since Cyprus joined in 2004. Ambassador Hatziargrou was one of the agreements’ patrons.
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