With much fanfare last October, Turkey inaugurated Water of Peace, a 50-mile undersea pipeline carrying water from Turkey to the drought-stricken Turkish Republic of Northern Cyprus (TRNC). It was a sign of Ankara's unwavering support for the enclave, which only Turkey recognizes and supports. In January, Al-Monitor reported that Turkey's Justice and Development Party (AKP) government was pressuring the TRNC to give the water distribution and sales rights to a private monopoly and warned that this could lead to a political crisis in the TRNC.

After lengthy bargaining, Prime Ministers Ahmet Davutoglu of Turkey and Omer Kalyoncu of the TRNC signed the bilateral Water Supply Agreement on March 2. Following the signing, the right-wing National Union Party (UBP), which is close to the AKP, decided to pull out of the TRNC ruling coalition because of disagreement over the distribution and revenues provisions, which it supported, and the government resigned on April 5. Turkish Cypriots had pinned much hope on this coalition, which was seen as a broad-based reconciliation government, bringing together the UBP and the left-wing Republican Turkish Party (CTP).

Two factors related to the AKP stand out in the collapse of the coalition: disagreements on how profits from the water deal would be shared and the suspension of Ankara’s financial support for the TRNC in January after the two sides failed to agree on the terms of an assistance protocol. Stripped of Ankara’s aid, the TRNC was hit by a financial bottleneck and failed to fully pay the salaries of public servants in March.

The Turkish Cypriot government crisis has weakened TRNC President Mustafa Akinci’s hand in ongoing peace negotiations with Greek Cyprus to end the island’s long-standing division. The negative impact on the peace talks is likely to increase with a new, right-wing coalition having been formed April 16 that excludes the CTP, which backs reconciliation with the Greek Cypriots and the accession of Turkish Cyprus to the European Union (EU). The talks were already expected to enter a period of stagnation in the coming weeks due to parliamentary elections in Greek Cyprus scheduled for May 22.