IT WILL BE at least 2009 before any possibility exists of lifting the Turkish ban on Cypriot air and sea traffic, shipping bosses said at a conference in Limassol yesterday.
Cyprus Shipping Council (CSC) outgoing president Andreas Droussiotis told delegates: “Despite efforts by the government this long standing problem was not solved by the end of 2006 and realistically one cannot expect any serious possibilities for the matter to be resolved before 2009.”
On the sidelines of the conference, Transport Minister Harris Thrassou was not prepared to put a date on when developments might be expected but told the Cyprus Mail: “We are not expecting a decision soon,” he said, putting it down to the forthcoming elections in Turkey.
“It doesn’t depend on us. But we hope that with the efforts being made, and with Turkey’s aspirations to join the EU, I believe in the end it will have no choice but to comply with international law,” the Minister said.
The Turkish ban on Greek Cypriot ships was imposed in 1987, but the issue has been raised during its EU accession course. The bloc had asked Ankara to lift the ban by the end of 2006, which it refused to do. The EU froze eight of Turkey’s negotiating chapters, but gave no new deadline for Ankara to normalise relations with Cyprus.
On Thursday the EU opened talks with Turkey on the second of 35 chapter that must be concluded for eventual entry to the bloc. EU and Turkish officials met to open the negotiating chapter covering enterprise and industry.
Asked how the development might bode for the shipping ban, Thrassou said: “I believe Turkey will have to do something to open the rest. I don’t think the EU will allow Turkey to just keep opening chapters one by one without Turkey taking any steps.”
Thrassou said the Turkish ban was seriously affecting the industry since many EU companies might be put off setting up in Cyprus if they were unable to dock their ships at Turkish ports.
Cyprus has the world’s tenth largest fleet and is the third largest in the EU after Greece and Malta.
“It holds back the further growth of the Cyprus Register and beyond Cyprus it also affects EU interests,” he said. “Cyprus has a lot of companies from the EU under the flag. So it doesn’t only affect the economy of Cyprus but also the EU economy.
Droussiotis said that having anticipated the negative effects on the Cyprus flag, the industry had asked the government for more tax incentives to counterbalance the ban by luring in more EU shipping business to the island.
“These new additional tax incentives aim to attract new shipping-related activities and also to offer the much-needed financial justification for long established shipping companies in Cyprus, and ship owners using the Cyprus flag, to remain loyal to Cyprus despite the adverse effects of the Turkish ban,” he said.
Thrassou was reluctant to comment on the new CSC proposals saying they were part of a wide dialogue with the industry, which also involved sorting out the issue of social insurance for seafarers.
The CSC fears that EU regulations on the payment of social insurance will prove “catastrophic” for the shipping industry at a time when the island was trying to attract more business.
“The Ministers of Finance, Commerce and Labour are examining the issues,” Thrassou said. “We haven’t taken a final decision. We are waiting a proposal from the Labour Minister.”
Droussiotos said the Labour Ministry proposal would not only fail to achieve its aim but “on the contrary would create a mega blow to the attractiveness of Cyprus flag and the resident shipping industry”.
“The result will be catastrophic if the Council’s proposals are not followed,” he said.
He made a similar comment about social security for seafarers from third countries saying the Ministry tried again to “sneak into” the new government policy a relevant law for the requirement of social insurance payments.” However this was eventually amended by parliament, he said.
Droussiotis said that solving the tax and social security problems would “safeguard the industry”, which contributes some four per cent of GDP, over £500 million a year to the economy, employs 4,000 people locally and 40,000 seafarers worldwide.
