Select Committee on European Scrutiny Twenty-Ninth Report


12 Assistance for northern Cyprus

(a)

(25797)

11360/04

SEC(04) 910

(b)

(25808)

11279/04

COM(04) 465


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

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

Documents originated7 July 2004
Deposited in Parliament(a) 16 July 2004

(b) 13 July 2004

DepartmentHM Treasury
Basis of considerationEM of 15 July 2004
Previous Committee ReportNone
To be discussed in CouncilNot known
Committee's assessmentPolitically important
Committee's decision(Both) Cleared

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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