Turkish northern Cyprus could deal a crippling blow to Turkey’s hopes of joining the European Union on Sunday if, as expected, the breakaway region elects a hardliner in presidential elections.

It would be an enormous irony.

The enclave owes its very creation to a 1974 Turkish army invasion launched after a militant Greek Cypriot coup seeking union with Greece. Turkey has, since independence from Britain in 1960, acted as guarantor of Turkish Cypriot interests and is alone in recognising and supporting northern Cyprus.

Predominantly Muslim Turkey opened talks to join the wealthy bloc in 2005, but progress has slowed almost to a halt due in part to Ankara’s failure to implement key reforms, including a settlement on the divided Mediterranean island of Cyprus.

Some 164,000 voters in northern Cyprus will hold the key to Ankara’s aspirations to join the European Union when they cast ballots in an election in which a nationalist is favoured to unseat the pro-settlement incumbent.

Analysts say a victory for Dervis Eroglu, who supports a two-state confederation for the island’s Turkish and Greek communities, would undermine U.N.-backed reunification efforts and dash Turkey’s dreams of joining the EU. That prospect is in any case more than 10 years off, but hopes help drive reforms.

Polls give Eroglu, currently Turkish Cypriot prime minister, a large margin for victory and some even point to him winning the vote in the first round against rival, Mehmet Ali Talat.

“I don’t think anybody is going to walk away from the negotiating table, but if Eroglu wins we will see a slow death of the talks and an acceptance of partition,” said Hugh Pope, Turkey/Cyprus director for the International Crisis Group.

Parts of Turkey’s EU talks are frozen because of Cyprus.

The EU says Turkey must carry out promises under a 2005 agreement to open its ports and airports to traffic from the Greek Cypriot part of the island; Ankara wants the EU first to end its international isolation of the northern part of Cyprus, a self-declared state recognised only by Ankara.

The Greek Cypriots who represent the island in the EU say they will block Turkey’s admission as long as Cyprus is divided.

The prospect of joining the EU has long been a locomotive for political and economic reform in crisis-prone Turkey.

Losing the EU candidate aura would diminish Turkey’s charisma in the Middle East and unnerve foreign investors who are lured to its development model, Pope said.

“For Turkey, Cyprus is like driving a car with the brakes on,” he said.

The island’s fate has been an irritant in relations between old rivals and NATO members Turkey and Greece, who also have territorial disputes in the Aegean.

LIFELINE

Turkey, which still keeps 30,000 troops there and says it is committed to a peaceful resolution, has made no secret it favours Talat, although it has been at pains not to be seen as publicly taking sides.

“Ankara does not want to be seen as interfering, but it would be pleased if Talat is re-elected since he is more inclined to talks with the Greek side,” said Ilter Turkmen, former Turkish foreign minister and ambassador to Athens.

Ankara says it will work towards a settlement with whomever wins, and Prime Minister Tayyip Erdogan — mindful of the $700 million annual lifeline Turkey provides to the northern Cyprus government — has told hardliners they must honour peace talks.

“Ankara is not very concerned over who wins the elections as they know who says the last word: the Turkish government,” Erdal Guven, foreign policy columnist for Radikal daily told Reuters.

Northern Cyprus occupies about one third of the territory of the island. Part of the settlment would almost certainly involve the return of some Greek Cypriots to the north, but Eroglu rejects this notion.

Erdogan, who has shown more interest in a Cyprus settlement than his predecessors, said last month Turkey would be willing to withdraw its troops from Cyprus if a peace deal is reached.

A victory for Eroglu, who is close to hardline nationalist factions in Turkey, could also weaken Erdogan to a degree ahead of general elections in Turkey set for July 2011.

But the Turkish military, which has clashed with the Islamic-rooted ruling AK Party, also wants to see agreement.

Should the Turkish Cypriot anti-settlement camp win, however, the mainland might need to take a higher profile.

Although Ankara has made a series of gestures to the Greek Cypriot side recently, Erdogan refuses to hold direct talks with Greek Cypriot leaders. Turkey holds that the central Cypriot state ceased to exist with the collapse in bloodshed of a power- sharing structure between Greek and Turkish Cypriots in 1963-64.

“It is an issue of trust between the two sides. The 750,000 Greek Cypriots need to be told they can trust Turkey’s 75 million Turks and Turks need to learn the Greek Cypriots are more flexible to negotiate.”