Hellenic Observatory European Institute, 2011. — 40 p. — (GreeSE Paper No.51).The Greek-Turkish dyad is one of the oldest rivalries between neighbours.Since 1999 Greek-Turkish relations are in a state of détente and there have been many attempts to resolve their outstanding differences (Aegean, Cyprus, minority issues) but until now little has come out of these efforts although both sides are committed to an overall settlement. Our thesis is that this lack of progress is due to the fact that various incompatible conflicts are but the tip of the iceberg. The real reasons for the impasse, the essence of the rivalry, are the following ensemble (which is presented in detail in this paper): historical memories and traumas, real or imagined that are part and parcel of their national narratives together with their respective collective identities which are built on slighting and demonizing the ‘Other’. Only if this aspect of the conflict is fully addressed will Greece and Turkey be able to settle their ‘objective conflicts of interests’ and embark on a process of mutually beneficial reconciliation.