sad fact is that for so many reasons Turkey is seen as the bigger and more important partner to the EU, despite not being a member, than Cyprus, which is. So they end up with all sorts of perks like the Customs union so Turkish goods get in the EU cheap. Result? As Turkish labour laws are not so hot and wages not so high, lots of companies move production to Turkey.
At the same time Turkey with its large armed forces and proximity to Russia, Iran, Iraq, etc, is seen by Nato as a big ally: lots of bases, etc.
That BTW is what stiffed Cyprus in '74.
Callaghan wanted to stop the Turks bringing troops across but needed US Military support. US would not do that as it would split Turkey from Nato, not because of any desire to get rid of Big Mak. The US already had its agreement for the listening posts, just renewed for 10 years.
See
http://www3.nd.edu/~dlindley/handouts/US%20role%20in%20Cyprus%20Crises.pdfTo conclude, I will look at both the historical and the policy implications of my argument. This thesis clarifies the history of America’s role in Cyprus during the 1960s and 1970s by establishing the correct narrative of the State Department’s policy development.
The narrative rebuts the arguments of conspiracy theorists such as Brendan O’Malley, Ian Craig, Lawrence Stern, William Mallinson. I accomplish this by targeting the two key points of the conspiracy theory: first, that the U.S. had a continuous, decade-long plan to partition Cyprus through external military intervention and second, that this plan was based on the strategic value of Cyprus as a military base and source of intelligence. Instead, I showed that the first major point is refuted by describing how America’s policy evolved and changed over the course of that decade. Next, it is clear that the communications facilities and Sovereign Base Areas did not merit the importance attributed to them by the conspiracy theorists. War between NATO allies Greece and Turkey would have done much more significant damage to U.S. Cold War interests than the loss of three or four relatively minor intelligence facilities in the Eastern Mediterranean. In addition, war would force the U.S. government to choose sides and lost more important strategic interests, such as the Sixth Fleet or installations in Turkey, as a result. While the U.S.’s rationale was not always commendable or favorable to the Cypriot people and at times the State Department’s decisions may merit criticism, the U.S. did not orchestrate a decade-long conspiracy to
protect its own interests on the island.
For the EU there is now too much cash tied up in Turkey. I think it is a pity that such investment was not retained in the EU and e.g. applied in Greece, Romania, Poland, etc.