12 Assistance for northern Cyprus
| (a)
(25797)
11360/04
SEC(04) 910
(b)
(25808)
11279/04
COM(04) 465
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Preliminary Draft Amending Budget No. 9 to the General Budget for 2004: General statement of revenue — Statement of revenue and expenditure by section — Section III — Commission
Draft Council Regulation establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community
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| Legal base | (a) Article 272 EC; the special role of the European Parliament in relation to the Budget is set out in Article 272; QMV
(b) Article 308 EC; consultation; unanimity
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| Documents originated | 7 July 2004
|
| Deposited in Parliament | (a) 16 July 2004
(b) 13 July 2004
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| Department | HM Treasury |
| Basis of consideration | EM of 15 July 2004
|
| Previous Committee Report | None
|
| To be discussed in Council | Not known
|
| Committee's assessment | Politically important
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| Committee's decision | (Both) Cleared
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Background
12.1 In the wake of the referendum on reunification in Cyprus
in April 2004, the Council asked the Commission to prepare an
assistance package for northern Cyprus in order to end the isolation
of the Turkish Cypriot community and to facilitate reunification
of Cyprus by encouraging economic development in the Turkish Cypriot
community.
The documents
12.2 The Commission proposes in document (b) a draft Regulation
to authorise provision of assistance to the Turkish Cypriot community
with emphasis on economic development, on economic integration
of the island and on improving contacts with the Greek Cypriot
community and the Union. The Commission proposes an assistance
package equivalent to the finance that northern Cyprus would have
received in the event of reunification. Commitment appropriations
of €6 million (£4.024 million) are proposed for 2004
to cover feasibility studies, preparatory actions and short-term
technical assistance to facilitate mature projects in future years.
The forward financial programming foresees commitments of €114
million (£76.464 million) in 2005 and €139 million (£93.232
million) in 2006.
12.3 This draft Regulation is based, in the absence
of any other suitable treaty provision, on Article 308 EC.
12.4 Document (a) is a draft amendment to the 2004
General Budget to provide for the commitment appropriations of
€6 million proposed for 2004 under Heading 7 — Pre-accession
aid.
The Government's view
12.5 The Financial Secretary to the Treasury (Ruth
Kelly) says:
"The Government fully supports the proposed
economic assistance package to northern Cyprus, as an important
measure to facilitate a possible future settlement on the unification
of Cyprus and adoption of the acquis communautaire in the
northern part of the island. While northern Cyprus is not strictly
speaking a candidate country, the Government is satisfied that
funding from Heading 7 would be appropriate, given that the character
of the proposed assistance closely resembles existing pre-accession
programmes. However, the Government will work with other Member
States to ensure that this remains a unique situation and does
not set a precedent for any future calls on the margin in Heading
7 for non-candidate countries."
12.6 In relation to the legal basis for the draft
Regulation the Minister says:
"The Government agrees that the use of Article
308 is justified as northern Cyprus is in a unique situation not
covered by other Treaty articles. Use of Article 181a would not
be appropriate as northern Cyprus is not a third country."
Conclusion
12.7 The underlying objective of these documents
— to facilitate reunification in Cyprus — is laudable.
And we accept, despite our frequent reservations about the use
of Article 308, that there is no other suitable treaty provision
available for this case and that reunification would attain one
of the Community's objectives in the course of the operation of
the common market. So we are content to clear the documents.
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