THE Luxembourg presidency of the EU is trying to secure the consent of all interested parties for the decoupling of the two EU regulations on financial assistance to Turkish Cypriots; the aim is to push through at least one of the regulations, that of direct financial aid amounting to 259 million euros. According to sources, if the presidency feels it has the necessary assurances, it will propose the regulation before COREPER next week at that body’s last meeting before Britain takes over the presidency.
Although very little information has trickled through from Brussels, it appears that the Turkish Cypriots are now more disposed to agree to the financial assistance package, which is to be used for infrastructure projects, even though the regulation for direct trade is more important to them politically. On the other hand, the Cypriot government’s longstanding position is that it will not accept direct trade, because that would entail a de facto recognition of the breakaway regime. Assuming attempts are made to secure some commitment from the Greek Cypriots with regard to direct trade, then sources estimate that Nicosia’s response will be negative.
Sources noted that the Turkish Cypriots seem to have realised that part of the money could be lost unless an agreement is reached soon, and that the sum involved is too large to pass over. According to the same sources, if the Turkish Cypriots agree to the decoupling of the two regulations, then none of the EU member states, or the European Commission, would object to this. In past debates inside COREPER, Britain and a few other countries had blocked implementation, as they wanted both regulations to be adopted and had sought a commitment from Nicosia about the direct trade regulation. So far, it has not been known (at least in public) whether the EU partners have modified their stance on this or whether they will ask Nicosia for a statement committing itself to future discussion on direct trade. If that happens, it is again likely that this approach will fail as well.
The prospect of losing some of the money from the financial aid package was also discussed at the meetings between Greek and Turkish Cypriots at the Commission’s headquarters. Sources in Brussels said these meetings were significant, irrespective of the fact that no agreement was reached. They argue that at least the two sides agreed to sit at the same negotiating table. Another important parameter is that the Cypriot government has introduced into the debate the status of Famagusta port. This issue, along with direct trade, was also part of the discussions during the contacts of the Turkish Cypriot Chamber of Commerce in Brussels this week.
