Select Committee on Foreign Affairs Second Report

The European Union dimension

Cyprus and the EU

96. Cyprus's path to membership of the European Union began in 1973 with the signing of an association agreement with the European Community. The events of the following year meant that her journey to the EU was to take longer than had been anticipated. A customs union was eventually signed in 1987 and in 1990 Cyprus's formal application for EU membership was accepted. In 1995, approval was given for the accession process to get under way, with or without a solution to the Cyprus problem, as part of a deal to bring in ten new members and advance Turkey's EU aspirations, Greece giving up her long-running veto against the establishment of a customs union with Turkey.

97. Christopher Brewin explained: "To end a period of really bad relations with Turkey, the EU paid the asking price for lifting the Greek veto on moving to the final stage of lifting the customs union with Turkey. As that price was allowing Cypriot accession talks without a prior settlement, this required the EU to ignore the first Copenhagen requirement."[147] Professor Clement Dodd summarised the compromise as, "Eastern enlargement was more important than settling the Cyprus issue."[148] When formal negotiations commenced in 1998, Turkish Cypriot representatives were invited to join discussions as part of the Republic of Cyprus team, but declined to do so.[149]

98. Accordingly, in December 1999 in Helsinki, the Council confirmed that Cyprus's accession would "be made without [a solution] being a pre-condition"[150] The Copenhagen Council of December 2002 concluded that Cyprus would be admitted to the European Union and that in the absence of a settlement, the application of the acquis to the northern part of the island would be suspended.[151] Thus, when the divided island formally became a member of the European Union on 1 May 2004, the Union's laws were duly suspended in the North.

99. Since May 2004, the Republic of Cyprus has held an important advantage as a voting member of the European Council. This can only have strengthened the hand of President Papadopoulos in calling for a 'No' vote on the Annan Plan: "Shall we do away with our internationally recognised state exactly at the very moment it strengthens its political weight with its accession to the European Union?"[152] On the other side of the Green Line, Rauf Denktash has claimed that "Repeated statements to the effect that Cyprus would be accepted as an EU member, whether there was an agreement or not, fed the intransigence of the Greek Cypriot side."[153]

100. In an apparent bid to obtain concessions from Ankara ahead of the December 2004 EU summit, when a decision on Turkey's entry was to be made, President Papadopoulos described his country's newly-acquired veto as "a weapon we have in our hands."[154] He also claims to have plenty of ammunition, with no fewer than 64 opportunities to block Turkey's accession: one at the beginning and one at the end; and two for each of the 31 technical chapters.[155]

101. Talk of using the veto so soon after joining the club may be unpopular, but there is also some evidence to suggest that, since entering the European Union, the government of Cyprus's actions have been less than wholeheartedly communautaire. The spirit of cooperation, the big picture which was the impetus behind European enlargement, seems to be lacking. For example, the Republic of Cyprus, which has successfully claimed to represent all the people of the island, has appointed only one Turkish Cypriot to its representation in Brussels.[156] Cyprus has also blocked the EU's direct trade proposal, which we discuss in detail below. Commenting on Cyprus's obstruction of the financial aid and trade proposals, Dr MacShane, said: "We have not found a solution and it would be perfectly fair to say that, in my judgment, the officials of the Republic of Cyprus are not working with us to find a solution."[157] Christopher Brewin was of the opinion that "the European Union has to get a grip on it."[158]

102. Former senior Cyprus diplomat Michael Attalides, whom we met while in Cyprus, has written that

Being a member of the European Union is extremely important and pregnant with potential. But this potential is not realizable as an automatic outcome of the legal fact of membership. The legal fact of membership needs to be complemented with the full practice of membership in all fields of EU activity. The fruition of the legal fact of membership will only come through building up political capital for Cyprus within the EU, forming internal alliances or, simply put, making friends and influencing people.[159]

Mr Attalides continues

In [the EU's] political culture nationality and cultural diversity are sacred, but nationalism is rejected. Basic citizens' rights are paramount and continually widened, but compromise is also valued. Democratic values are a sine qua non, but democracy is not always interpreted as strict numerical proportionality. The effort to reach unity in diversity leads to a situation where exclusion, xenophobia and prejudice are combated and the normal conduct of business involves accommodation of opposing views, painstaking efforts towards consensus, pragmatic implementation of principles, and tolerance of cumbersome decision making processes.[160]

This is wise advice for any new member of the EU, and particularly for Cyprus. It would be a great mistake for Cyprus to see membership of the EU in terms of gaining leverage over Turkey or over Turkish Cypriots.

103. We conclude that there is as yet little evidence that the Republic of Cyprus has fully taken on board that its membership of the EU involves obligations, as well as opportunities. We recommend that the Government work on a bilateral level, and with its European partners, to encourage Cyprus to adapt to European Union values and methods of working.

Ending the isolation of the North

104. There is no doubt that northern Cyprus is isolated. As we discuss in greater detail below, direct travel from the United Kingdom and almost every other country to ports and airports in the North is impossible. Opportunities for trade are similarly constrained. Residents of northern Cyprus who are not also citizens of the Republic of Cyprus or of another EU country cannot even visit the South of the island. The consequences of this isolation are obvious to any visitor to the island who travels to both sides of the Green Line. Turkish Cypriots are poorer than Greek Cypriots; they drive older cars, on less well-maintained roads; their economy and infrastructure are less developed.

105. Turkish Cypriots blame their relative lack of prosperity on the 'embargo' operated against them by other countries, at the insistence of the internationally-recognised government of Cyprus. Greek Cypriots point to mismanagement of the economy of the North, including use of the Turkish Lira, and place responsibility on those Turkish Cypriot leaders who, with the encouragement of Turkey, chose 'independence'.

106. It is certainly worth recalling that even after 1974 northern Cyprus was quite free to trade directly with countries of the European Community, until it chose unilaterally to declare independence. As Lord Hannay reminded us,

… the north had every right to trade with the European Union; unfortunately they destroyed it, on a technicality (their ability to do so) by declaring their independence and thus invalidating all the stamps and seals which they used to show that the goods had been properly inspected and so on, so it was a self-inflicted wound by the Turkish Cypriots, by Mr Denktash's policy of pursuing status rather than pursuing a settlement. But I do not think we should forget that the European Union's original purpose in signing the customs union with Cyprus was that all Cypriots, Greek and Turkish, should benefit from free trade and the customs union.[161]

However, we see nothing to be gained now from an apportionment of blame for past mistakes. Our purpose in the sections below is to consider the difficulties which have arisen in respect of current proposals for ending the isolation of Turkish Cypriots, and ways of resolving them.

The Green Line Regulation

107. Just days after the referendums, on 29 April 2004, the European Council approved a Regulation which established rules for the crossing of goods and services across the Green Line.[162] Under the Regulation, Turkish Cypriots are able to export their goods through the port of Larnaca in the South, and to trade directly with Greek Cypriots.

108. The Regulation applies both to products which originate wholly in northern Cyprus, such as agricultural produce, and to finished products, such as furniture. It is not intended to apply to products which have been imported illegally (as the Republic of Cyprus would argue) through ports in the North. The EU Council of Ministers has been given legal advice that the Regulation's application to finished products is intended to relate only to products which have already crossed the Green Line from South to North in an unfinished state, and which are then finished in the North for return to the South.[163]

109. Volumes of trade across the Green Line, initially very small, have started to pick up. In the first week of December 2004, the value of goods traded across the line—mainly agricultural produce—exceeded the value for the entire month of October. The European Commission told us that "Between 23 August 2004 (when the Green Line Regulation became fully operational as regards trade) and 31 December 2004, goods worth approximately €475,000 crossed the line. Meanwhile the main products are vegetables (38% in total; 50% of the December crossings) followed by paper (16%) and furniture (10%)."[164] Although volumes remain low, it seems there is every prospect that they will increase further, especially if operation of the Regulation is improved and if confidence among business people increases.

110. It was the Turkish Cypriot side which took the initiative, in April 2003, to open the Green Line. It is disappointing, therefore, that they have not yet reached agreement on proposals made in July 2004 by the Greek Cypriot side to open further crossing points.[165] During our visit to Cyprus we heard that there are currently only four crossings along the entire length of the Line, which has meant that at busy periods queues of people form.[166]

111. It is also disappointing that the Turkish Cypriot authorities continue to impose an almost complete ban on the movement of goods from South to North. This lack of symmetry in the operation of the Regulation lends credence to claims that Turkish Cypriots are being protectionist, and that they fear successful intra-island trade will undermine their case for direct trade with other countries.[167]

112. Although some restrictions imposed by the Greek Cypriot authorities have been lifted, others remain. For example, Mr Mirel told us that "One of the issues we are trying to convince the Republic about is to allow truck drivers, taxi drivers, from the north to move goods into the south, otherwise the Green Line regulation does not mean anything."[168] In October 2004, in an interview with the Turkish press, Mr Talat complained that the Greek Cypriot authorities were "searching in detail every car, the cars of tourists, taxis and lorries. They are imposing very high insurance fees and assuming a deterrent attitude".[169] The Ministry of Foreign Affairs in Nicosia told us that

On 30 July 2004, the Government announced further supplementary measures in order to facilitate the movement and transport of Turkish Cypriots and their goods. As such, the Government decided on the amendment of the relevant legislation, so that public service vehicles owned by Turkish Cypriots are allowed to cross the line, loaded with persons or products, as appropriate. Such vehicles include:

-  trucks to transport goods for own account;

-  trucks to transport goods for hire or payment;

-  tourist buses and coaches; and

-  taxis owned by Turkish Cypriots.[170]

However, the MFA neglected to tell us that they continue not to recognise driving licences issued in the North. In practice, therefore, few Turkish Cypriots are able to drive their trucks, buses or taxis across the Green Line.

113. The EU has been seeking to remove some of the other restrictions and in November 2004 made a series of specific proposals. These would allow trade in animals and animal products, easier movement of agricultural goods and relaxation of restrictions on goods for personal use.[171] The proposals were discussed in working groups of officials with a view to their adoption at a meeting of the Council of Ministers in December. However, on 7 December Cyprus requested a delay, and then remittance of the proposals to the Council of Permanent Representatives (COREPER). This manoeuvre has effectively stalled the measure.

114. We consider that intra-island trade can only be a good thing: it has the potential to increase the prosperity of Greek and Turkish Cypriots alike; and it will break down barriers of mistrust and dislike. We agree with Lord Hannay that "if you freed up trade both on the island and between the island and the European Union, you would get a lot of prosperity for the Greek Cypriots too because the Turkish Cypriots are going to buy a lot of Greek Cypriot services if there is a freedom of trade on the island, so I think, as I keep saying, it is not a zero-sum game; it is a game in which the cake can get larger."[172] It is therefore deeply unfortunate that, in the circumspect words of the European Commission's spokesman, "Neither side has taken concrete measures to improve the operation of the Green Line Regulation."[173]

115. We are greatly disappointed that it has so far proved impossible to gain agreement on the modest but important proposals to improve the operation and usefulness of the Green Line Regulation on intra-island trade. We recommend that the United Kingdom work closely with the Luxembourg presidency to secure early implementation of these changes and to streamline procedures for making further amendments. We further recommend that the EU should take steps to bring in genuinely free trade, with traders in the South of the island being free to move goods and products across the line to the North.

Aid to the North

116. Two days after the referendums, the EU General Affairs and External Relations Council agreed that failure to achieve a settlement should not detract from the need to assist the North, though by no means was this to be construed as recognition of the 'TRNC'.[174] In 2002, the European Council had set aside €259 million to help northern Cyprus and the Council now invited the Commission to develop comprehensive proposals for disbursement of this sum, with particular emphasis on the economic integration of the island and on improving contact between the two communities and with the EU. On 7 July, the Commission brought forward "A regulation establishing financial support for the economic development of the Turkish Cypriot community and for improving contacts between the two communities." The Regulation was to place "particular emphasis on alignment with EU legislation and policies, reconciliation and confidence building measures, social and economic development, development of infrastructure and people to people contacts."[175]

117. Christopher Brewin gave us an example of the sort of project which could be funded under the aid package and which would prepare the way for implementation of a settlement.

So the money for Turkish Cyprus is for building houses north of Morphou for Turkish Cypriots to leave Greek houses now in preparation for a settlement. At the moment the aid is entirely around pre-accession kinds of things with feasibility studies. If the Turkish Cypriots actually had to build houses in anticipation of a settlement, which they will have to do when the Greeks go back into their properties, this would be a really positive signal that we expect a settlement and the EU could do that.[176]

We agree that a shift in focus from feasibility studies to tangible preparations for a new state of affairs in Cyprus would be entirely appropriate. Others, however, have pointed out that the funds could be spent in ways which would make matters worse.

118. Lobby for Cyprus was concerned that aid might be used to improve properties which rightfully belong to Greek Cypriots (and thus, under the terms of the Annan Plan, make it more difficult for these owners to reclaim them). To guard against this, the Lobby urged that all funding should be channelled through the Republic of Cyprus authorities.[177] In discussing this point before us, Dr MacShane said that "the Government of the Republic of Cyprus, is arguing that it should have a particular interest in how [aid] is disbursed just as other Member States like to ensure that money from Brussels does not flow to areas and projects over which it has no say. We believe that it should be disbursed directly in the North. This is an area of continuing discussion."[178] Speaking two weeks later, the European Commission's Mr Mirel told us that

… after very lengthy discussions on the proposal, we have now full agreement, including the Republic of Cyprus, whereby this aid package could be used for the north—that would be implemented directly by the European Commission—but actually we would use the European Agency for Reconstruction which we have set up for the Western Balkans, which is a very experienced body to implement this type of programme, and they would open an operational centre in Cyprus. There is full agreement on this idea.[179]

119. We welcome this agreement on the mechanics of delivering the aid. However, the €259 million has been a long time coming, and it has yet to arrive. Although we gained the clear impression when in Cyprus that Turkish Cypriots see the aid regulation as being a good deal less urgent or important than the direct trade regulation, the fact remains that this money could go some considerable way towards preparing northern Cyprus for what we hope will be its early integration into the EU.

120. Delay has occurred because the British Government and the Dutch presidency have treated the aid regulation and the direct trade regulation as a package of measures aimed at ending the isolation of the Turkish Cypriots, while the Government of Cyprus, on the other hand, supports the aid regulation but not the trade regulation. Cyprus's High Commissioner in London told us that

… certain third countries, including the United Kingdom, have refused to cooperate in a constructive manner, in reaching an agreement on the text of this [the financial aid] regulation holding it, in a manner of speech, 'hostage' to agreement being achieved on the so-called draft regulation on 'direct trade'. This conditionality in fact is what held up the implementation of the draft regulation on 'financial support' and not any prevarication on the part of the Republic of Cyprus.[180]

121. The United Kingdom has indeed been at the forefront of the policy of linking the aid and trade regulations, and that linkage has undoubtedly been one factor in the delay in approving them. On the other hand, Dr MacShane said in evidence "I will not hide from the Committee my view that the British Government feels there has not been enough operational support from the Government of Cyprus to give effect to the clear wish of the European Union as a whole."[181]

122. We regret that valuable aid for the people of northern Cyprus is being held up by political and procedural disputes within the EU. We recommend that the Government use its good offices to persuade all parties to remove the remaining obstacles to disbursement of this aid.

Direct trade with the North

123. On 7 July 2004, the European Commission proposed to the Council of Ministers "A regulation to facilitate direct trade from the northern part of Cyprus. The proposal offers a preferential regime for products originating in the North, entering the Customs Territory of the European Union. It is proposed that the preferential regime should take the form of a tariff quota system which would be established to encourage economic development while avoiding the creation of artificial trade patterns or facilitating fraud."[182]

124. The legal basis of the draft regulation proposed by the Commission is Article 133 of the Treaty of Rome, which allows for decision by qualified majority voting. We were told by the former constitutional adviser to the President of Cyprus that the United Kingdom was instrumental in seeking a legal basis which would avoid the need for unanimity, and thus rule out any possibility of a Cypriot veto.[183] Article 133 deals with trade with third countries, whereas northern Cyprus is of course part of the EU, although the acquis is suspended in the North. The government of Cyprus therefore regards the proposed use of Article 133 as "legally wrong and politically questionable."[184]

125. The Cyprus High Commissioner in London invited us to take note of a legal opinion given by the legal service of the Council of Ministers.[185] This opinion points out that Article 133 has previously been used to regulate aspects of trade with territories which are outside the Community customs territory and cites Gibraltar as an example. The legal service suggests, however, that by passing the draft regulation the Council would effectively be partially ending the suspension of the acquis in northern Cyprus, a decision which would require unanimity. The service concludes that Article 133 cannot, therefore be used as the legal basis for the draft regulation, unless the Council has first decided unanimously in favour of a partial withdrawal of the acquis.

126. The legal service of the Council also considered the question of whether direct trade would imply recognition of the 'TRNC'. In this case, the service was of the opinion that the matter could be clarified by appropriate wording in the regulation. However, it stopped short of sanctioning the draft regulation's provision for the Commission to designate a competent authority to implement the regulation in the North, asserting that this must be subject to the consent of the government of Cyprus.[186]

127. We asked the European Commission's witness to comment on the legal opinion. Mr Mirel confirmed that the Commission is very firmly committed to legislating under Article 133 and told us, "if we had to go before the court, I am sure we would win."[187] Christopher Brewin, author of The European Union and Cyprus, felt that the legal opinion, although "powerfully" argued, made "little sense." He speculated that "political pressures from Greece and the Republic of Cyprus" were at work.[188] On the other hand, Philippos Savvides thought that "if you take it to the extreme on shaky legal grounds, so that you force the Papadopoulos government to take the Commission or the EU to court, you risk a decision most likely against the Commission."[189] At the time of writing this Report (January 2005) the legal position remains unresolved.[190]

128. There is of course also a significant political aspect to the direct trade issue. The Cyprus Ministry of Foreign Affairs told us that "the so-called 'direct trade' is purely a political reward for the Turkish Cypriots, not justified by economic considerations."[191] The Cyprus MFA believes that direct trade would lead to "the creeping or overt recognition of the secessionist entity in the north."[192]

129. Those of us who visited Cyprus found that although there was a great diversity of views among Greek Cypriots about many aspects of the Annan Plan and related issues, there was almost complete unanimity on the direct trade issue. Across the political spectrum, opinion among Greek Cypriots is very firmly that moves to 'end the isolation' of Turkish Cypriots will backfire, making a settlement less rather than more likely. The Cyprus Ministry of Foreign Affairs stated that direct trade "would help to solidify and deepen the division of the island, and would give a political message to the Turkish Cypriots that they do not need to cooperate with the Greek Cypriots."[193]

130. Similar fears were expressed by Philippos Savvides

I think yes indeed that I am all in favour of helping the Turkish Cypriots improve their social and economic life and I do think that the European Union is in the process of doing that and I have no problem with this process. My only concern is not to take measures and not to make gestures which would solidify the status quo, which would create, as I wrote in an article, another Taiwan in the Mediterranean. We do not want something which is not recognised, which has economic and other relations with countries, which will solidify and cement the partition: we want to help to unify the island.[194]

131. Although sympathetic to the need to assist Turkish Cypriots to improve their standard of living, Michael Attalides believes that the direct trade proposal "may prove to be counterproductive" and "could have further, probably unintended consequences … leading towards the normalization or reinforcement of partition."[195] Similarly, Friends of Cyprus told us that direct trade as proposed by the Commission would be "totally counterproductive."[196]

132. The other point of view was represented by Özdem Sanberk. He called for "the opening of trade and transport and also empowering the equal rights of the Turkish Cypriots. If that happens the process of rapprochement will start and the elements of mistrust will diminish. I think this is crucial; I cannot stress more the importance of starting direct trade and direct transport and furthering the equal rights of the Turkish Cypriots."[197]

133. Mr Sanberk's position was echoed by Lord Hannay, who told us

… there are many arguments being put forward by the Government of Cyprus to the effect that it would be a bad thing to resume trade from the north to the European Union because this would consolidate the separation of the island. My own view is that that is very counter-intuitive. I think that if trade from the north were resumed, this would help what is an absolutely essential feature of the reuniting of the island which is to narrow the gap between the economic prosperity of the north and the economic prosperity of the south.[198]

134. We certainly do not discount the strong misgivings of Greek Cypriots about the direct trade proposals, which were very forcibly expressed to us in Cyprus, and we have considered them at length and with care. We are concerned, however, that whether intended or unintended, the consequences of a failure to agree the proposals would be to consign Turkish Cypriots to continuing poverty and to place pro-solution politicians in northern Cyprus under possibly unbearable strain. Neither do we believe that direct trade will diminish the desire of Turkish Cypriots to experience the other benefits of EU membership—on the contrary, we believe that experience of direct trade and contact with the rest of Europe will provide Turkish Cypriots with an even greater incentive than before to seek an overall solution to the Cyprus problem, so that they can achieve the potentially substantial economic and political benefits which go with it. In our view, direct trade should hasten a solution, not prevent one.

135. Writing to our Chairman in May 2004, Foreign Secretary Jack Straw stated that "steps should be taken quickly to end the isolation of Turkish Cypriots."[199] His statement was one of many at the time, including those by the Prime Minister,[200] by the UN Secretary-General,[201] by Secretary of State Powell[202] and by the European Union.[203] In September, the FCO told us that it wished "to see fully effective regulations on trade and aid implemented as soon as possible."[204] However, as the anniversary of their vote in favour of a comprehensive settlement approaches, Turkish Cypriots are still waiting, and with diminishing confidence, on those who have promised them an end to isolation.[205] We conclude that undertakings given to Turkish Cypriots by the international community must be honoured. We recommend that the Government do more to turn its words into action, by working with the Luxembourg presidency of the EU to remove obstacles to direct trade with and travel to northern Cyprus, and that it encourage the wider international community to do the same.

136. Trade of course takes place through ports and airports. We now consider the legal and political ramifications of how this can be achieved.

Opening up the airports of the North

137. Cyprus has a number of well-appointed airports. The former international airport at Nicosia is in no-man's land and is no longer operational. It has the potential, however, to accept traffic once again, if agreement can be reached. In the South, there are commercial airports at Larnaca and at Paphos. In the North, the main airport is at Ercan (Tymbou), with a well-appointed diversion airfield available at the military airbase at Gecitkale (Lefkoniko). The British forces airfield at Akrotiri in the South is not normally open to civilian traffic.

138. The legality of international flights is governed by the Chicago Convention on International Civil Aviation. Different countries implement the Convention in different ways. The United States, for example, has entered into open skies agreements with a range of countries, and the FCO told us that under these agreements it is possible for flights originating from one of those countries (such as Turkey) to stop off en route at an airport in another country (which could be Cyprus) "without permission from the US authorities provided the intermediate airport meets US security standards."[206] American federal aviation authorities have apparently inspected Ercan (Tymbou) airport in northern Cyprus, but no scheduled flights have yet taken place.[207] According to the FCO, "The US Government has not yet made a policy determination on the issue of direct flights to northern Cyprus."[208]

139. The European Union has an open skies policy but (as we have pointed out in our Reports on Gibraltar) this does not cover airports in territories where the acquis is not fully in force, such as northern Cyprus.[209] According to the FCO, "EU operators wishing to fly to the north therefore need a route licence and to file flight plans with the relevant authorities in accordance with the appropriate national legislation. … The Commission have made clear they consider flights to the north as primarily an issue for national governments and do not plan any initiatives themselves."[210]

140. The United Kingdom's implementation of the Chicago Convention does not allow for intermediate stops in the way that the Americans' does. The Convention is applied in the United Kingdom by Air Navigation Orders issued under Section 60 of the Civil Aviation Act 1982. At present (February 2005) an operator wishing to fly between the United Kingdom and northern Cyprus is obliged to file a flight plan to Turkey. The aircraft must land in Turkey under the terms of the permit. Such aircraft remain on the ground in Turkey for about 45 minutes before they take off again and fly to Cyprus, operating under a different permit, issued by the Turkish authorities. About 50 flights per week perform this two-part movement.

141. We received many letters from exasperated Turkish Cypriots and expatriate Britons, calling for direct flights. Clearly, anyone travelling between the United Kingdom and northern Cyprus must find it inconvenient and tiresome to have to stop off in Turkey, although since the Green Line restrictions were eased most travellers have had the alternative option of flying direct to southern Cyprus and then crossing to the North.

142. The FCO told us that "HMG policy to date has been to refuse to issue permits for direct flights to north Cyprus. We have not yet reached a decision on whether to change this policy in response to the new situation created by the referendums of 24 April."[211] We are interested that the FCO has stated in such clear terms that the question of whether to permit direct flights between the United Kingdom and northern Cyprus is one of policy, not just legality, and that they are evidently actively considering the matter.

143. When we asked the Minister for Europe why direct flights have not started, he suggested that the Republic of Cyprus had been less than cooperative on the issue: "We have not found a solution and it would be perfectly fair to say that, in my judgment, the officials of the Republic of Cyprus are not working with us to find a solution."[212]

144. We later received a memorandum from the Ministry of Foreign Affairs of the Republic of Cyprus, in which it is pointed out that under Article 1 of the Chicago Convention, each country has "complete and exclusive sovereignty over the airspace above its territory."[213] The Republic of Cyprus, which is recognised as sovereign by the United Kingdom, thus claims sovereignty over the airspace which is in practice administered by the Turkish Cypriot authorities. It appears, therefore, that a decision to permit direct flights without the approval of the government of Cyprus could contravene the Convention and that such a decision could be challenged in the courts. A court might be invited to consider whether what the FCO has called the "new situation created by the referendums" in Cyprus has a bearing on interpretation of the Convention.

145. The question of direct flights is caught up in, but is actually separate from, the direct trade issue. The direct trade regulation makes no mention of flights or airports,[214] although clearly they would be one method of delivery. However, most aircraft would be carrying passengers rather than goods, so protracted delays in approving the direct trade regulation are not, of themselves, a reason for failing to implement direct flights. And for Turkish Cypriots, the potential benefits of tourism considerably outweigh the likely gains from trade in goods.

146. We recommend that in its response to this Report, if not sooner, the Government clarify whether it has the power to authorise direct passenger flights between the United Kingdom and northern Cyprus. We further recommend that, if it does possess the power to authorise flights, the Government announce a date from which such services will be permitted, subject to satisfactory safety inspections of the facilities at Ercan and other assurances.

Opening up the sea ports of the North

147. In its legal opinion of August 2004, the legal service of the Council of Ministers suggested that under international law a sovereign state has the right to declare any of its ports open or closed to international trade and that it is the duty of the European Community to engage in "loyal cooperation" with a member state in these circumstances.[215] The legal service accordingly concluded that the consent of the government of Cyprus is required before ports in northern Cyprus can be regarded as open for trade, a point which the Cyprus Ministry of Foreign Affairs reinforced in its evidence to us.[216] The United Kingdom's Minister for Europe, however, told us in very clear terms that "any member state if it so chooses, any individual ship owner if he so chooses, can sail into any port in northern Cyprus. … There is nothing today to stop any ship owner or any ship docking and unloading in northern Cyprus."[217]

148. Unlike air transport, international maritime transport is not subject to prior approval by the Government. The FCO told us that trade is already taking place between EU states and ports in the North, but that because of the legal constraints which have applied since 1994, and the domestic law of the Republic of Cyprus, volumes remain low.[218] Although traders opting to use ports in northern Cyprus risk prosecution only in the Republic of Cyprus, penalties imposed by a court in Cyprus may be enforceable elsewhere in the EU.

149. Mr Mirel of the European Commission said that the question of whether a member state of the EU allows trade through a particular port is a matter for that state, and not for the Commission.[219] The Commission cannot compel a member state to designate this or that port; neither can it act against a state whose nationals use a port which lies in the territory of a member state and which that state has not designated. However, by removing the legal impediment to trade with the North which now exists, the direct trade regulation would effectively encourage the use of ports situated in the North.

150. A further complication which affects the ports issue (but not the airports issue) is the dilapidated state of the facilities at northern Cyprus's main port, Famagusta (Maðusa). Those of us who visited the island saw for ourselves the ramshackle and very limited freight handling capacity of the port. We discussed with the Turkish Cypriot authorities the proposal by the government of Cyprus to regenerate the port of Famagusta and operate it jointly with the Turkish Cypriots, under EU supervision, in return for restoration to Greek Cypriot control of the adjacent town of Varosha.[220] We have no reason to suppose that this offer is anything other than sincere and we do not see why Turkish Cypriots (and the Turkish armed forces, who control Varosha) should not consider it seriously and seek to reach an accommodation.

151. Meanwhile, the Republic of Cyprus has encouraged Turkish Cypriot exporters to make use of the Green Line Regulation to send their goods through the port at Larnaca, in the South. Turkish Cypriots see this as a tactic to diminish support for the direct trade regulation. It appears that few have taken advantage of it.

152. In the absence of an early overall settlement, we recommend that the Government support practical measures which will enable Turkish Cypriots to trade with the United Kingdom and other countries, such as refurbishment and then joint operation to EU standards of the port at Famagusta, as proposed by the government of Cyprus.

Recognition of Cyprus by Turkey

153. Ever since Turkish forces landed on Cyprus in their thousands in July 1974, Cyprus has not recognised Turkey, and Turkey has not recognised the government in Nicosia as being the rightful government of the Republic of Cyprus under the 1960 constitution. Turkey does recognise—and is the only country to recognise—the 'Turkish Republic of Northern Cyprus'.

154. The mutual non-recognition of Turkey and Cyprus has been played out in various international settings. The Minister for Europe told us that "Turkey is vetoing the government of Cyprus joining international organisations where Turkey has veto rights, so the government of Cyprus feels it is not getting fair treatment from Turkey in terms of international treaty organisations it would like to join."[221] Similarly, Turkey does not allow Cypriot-flagged vessels to use its ports or its territorial waters—it also bars them from what it regards as the territorial waters of the 'TRNC'. Turkey must be advised that its refusal to permit Cypriot-flagged vessels to use its ports or its territorial waters is a constraint upon the European Union as a whole and that a continuation of this practice would be a severe impediment to advancing its EU candidacy.

155. The question of recognition has long bedevilled efforts to achieve a settlement in Cyprus. For many years, Mr Denktash tried to insist on recognition of the 'TRNC' as part of his campaign for political equality between the two communities. Rather than change its policy towards the present government of Cyprus, Turkey would prefer to recognise a new United Republic of Cyprus, in what Mr Papadopoulos has characterised as a "virgin birth".[222] Reflecting the Turkish position, Özdem Sanberk told us that "the call for recognition of the Republic of Cyprus is irrelevant under present conditions because Turkey has expressed its readiness to recognise the new partnership state which was going to emerge as a result of the negotiations between the two sides under the comprehensive settlement plan of the United Nations, but this plan is rejected."[223]

156. The recognition issue is important in its own right, but has assumed a greater importance as Turkey's aspiration to join the European Union has come closer to being realised.

Implications for Turkey's accession

157. We set out the history of Turkey's longstanding efforts to join the EU in our 2002 Report on Turkey

In a speech in 1924, Atatürk said "The decline of the Ottomans began when, proud of their triumphs over the West, they cut their ties with the European nations. This was a mistake which we will not repeat." It was this context that drove Turkey to be among the first countries to apply for membership of the European Economic Community, signing an Association Agreement as long ago as 1963. However, Turkey's progress towards membership has been slow. The Customs Union envisaged in the Association Agreement was put in place only in 1995. Turkey's rejection as a formal candidate for membership of the European Union at the Luxembourg European Council in December 1997, when many countries were accepted as candidates which until only a few years before had been communist dictatorships, engendered much anti-European feeling in Turkey. Turkish leaders claimed that Turkey's candidacy was being blocked on religious grounds, following comments by the Chairman of the European People's Party that "the European project is a civilisational project. Turkey's candidature for full membership is unacceptable", and reports that the then German Chancellor, Helmut Kohl, had described the EU as "a Christian club". This negative atmosphere altered at the Helsinki European Council in December 1999, when Turkey was accepted as a candidate to join the EU.[224]

158. On 17 December 2004, the EU Council of Ministers agreed that Turkey should be invited to commence accession negotiations from 3 October 2005, provided certain conditions are met. Turkey must reform some of its laws, improve its human rights record and end torture. Most controversially, Turkey must also extend its customs union agreement with the EU to include the ten new member states, among them Cyprus. Turkey has not been explicitly required to recognise Cyprus, but by entering into a customs union agreement which includes Cyprus, Turkey will have to deal with Cyprus in the way it deals with other member states. Most observers accept that this will amount to implicit or informal recognition of Cyprus by Turkey.

159. Nowhere in the conclusions of the December 2004 Council of Ministers is it stated that the Cyprus problem must be solved before Turkey may join the EU, nor is it specifically required that she must withdraw her forces from Cyprus. On the other hand, for Turkey to join the EU without formally recognising one of its member states, or with forces still present on part of the territory of a member state without that state's agreement, is impossible. We have shown elsewhere in this Report that the continued presence of Turkish troops in Cyprus is obstructing moves towards a final settlement; a withdrawal of some of those forces could only be of assistance both to a settlement in Cyprus and to Turkey's relations with the EU.

160. Minister for Europe Denis MacShane summed up the position for us in a series of statements: "it will be an anomaly of increasing magnitude that Turkey is seeking to negotiate with a union of 25 Member States, one of which it does not recognise";[225] "it behoves Turkey, though it is not for me to give advice, to show that in the Eastern Mediterranean it can find ways to solve the Cyprus problem as soon as possible";[226] and "I do not see how Turkey can join the EU on the basis of a partitioned island."[227]

161. We invited distinguished former Turkish diplomat Özdem Sanberk to give us his personal perspective. He told us that "I do not believe that it is possible for Turkey to join the European Union without a solution to the Cyprus problem and I do not believe it is desirable because it relates to the stability of the whole Eastern Mediterranean and also our relations with our Greek friends in Athens."[228] He went on to say

… one of the reasons why we are facing now this deadlock in Cyprus is the fact that the balance which was struck by the Lausanne Treaty and which was reconfirmed by the 1960 London and Zurich Treaties, was upset by the unilateral admission of the Greek Cypriots, and even when Turkey will be under the same umbrella like Greece, then of course there will be Turkish Cypriots and Greek Cypriots and this balance will be re-established in the Eastern Mediterranean and, definitely, it will help a lot to the solution of the problem. This is something which is so very important that I do not [know] how to re-stress it.[229]

162. We agree with the premise which underlies Mr Sanberk's position, which is that Turkish Cypriots who are part of a bi-zonal, federated United Republic of Cyprus which is inside the EU, will enjoy greater political equality than they could ever have in an unrecognised, self-declared statelet outside the Union. And with Turkish Cypriots inside the European Union as part of an overall solution of the Cyprus problem, Turkey's path to accession would be greatly eased.

163. We reiterate our previous strong support for Turkish membership of the European Union. We conclude, however, that in practice Turkish accession will be impossible for as long as there is no settlement of the Cyprus problem. We also conclude that Turkey has the power greatly to assist both a settlement in Cyprus and its EU aspirations, for example by withdrawing some of its many thousands of troops from the island, and we call upon it to do so.

147   Ev 5  Back

148   Ev 220 Back

149   Ev 62 [Mirel] Back

150   Ibid; Q228 [Mirel] Back

151   Available at Back

152   President Papadopoulos, television address to Greek Cypriot voters on 7 April 2004 Back

153   Ev 138 Back

154   Financial Times, "Cyprus refuses to rule out Turkey EU membership veto", 12 October 2004. Back

155   Comment by Quentin Peel, Financial Times, 23 December 2004 Back

156   Ev 5 [Brewin] Back

157   Q 125 Back

158   Q 30 Back

159   Cyprus Review, vol 16 No 1, Spring 2004 Back

160   Ibid Back

161   Q 54  Back

162   Council Regulation 866/2004 Back

163   Doc 11874/04, 25 August 2004 Back

164   Ev 71 [Mirel] Back

165   Ibid Back

166   See also Ev 245 [Andrew Dismore MP] Back

167   Ibid Back

168   Q 269 [Mirel] Back

169   Turkish, 'Turkish Republic of Cyprus: There are serious problems with EU,' 7 October 2004 Back

170   Ev 121 Back

171   Ev 71 [Mirel] Back

172   Q 54 Back

173   Ev 71 Back

174   European Council decision of Foreign Ministers Conclusions' statement of 26 April 2004 Back

175   Proposal for a Council Regulation establishing an instrument of financial support for encouraging the economic development of the Turkish Cypriot community (COM(2004)465, later amended as COM(2004)696) Back

176   Q 31 Back

177   Ev 275 Back

178   Q 141 Back

179   Q 242 Back

180   Ev 88 Back

181   Q 153 Back

182   Proposal for a Council Regulation on special conditions for trade with those areas of the Republic of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control (COM(2004)466) Back

183   Ev 130-1 Back

184   Ev 88 Back

185   Doc 11874/04, 25 August 2004 Back

186   Ibid Back

187   Q 247 Back

188   Ev 4 Back

189   Q 37 [Savvides] Back

190   Ev 71 [Mirel] Back

191   Ev 120 Back

192   Ev 122 Back

193   Ev 120 Back

194   Q 28 Back

195   Cyprus Review, vol 16 No 1, Spring 2004 Back

196   Ev 198 Back

197   Q 76 Back

198   Q 49 Back

199   Ev 34 Back

200   In Ankara on 17 May 2004. Back

201   In his Report to the UN Security Council of 28 April 2004. Back

202   During a press conference on 25 May 2004. Back

203   EU Foreign Ministers' statement, 26 April 2004. Back

204   Ev 37 Back

205   See, eg, Ev 215 [Embargoed!] Back

206   Ev 59 Back

207   US State Department spokesman Richard Boucher, 21 October 2004, available at Back

208   Ev 59. See also comments by State Department spokesman Richard Boucher on 25 January 2005, ibidBack

209   Ev 58 [FCO] Back

210   Ibid Back

211   Ibid Back

212   Q 125 Back

213   Ev 90 Back

214   Q 249 [Mirel] Back

215   Doc 11874/04, 25 August 2004 Back

216   Ev 90 Back

217   Qq 136, 137 Back

218   Ev 60 Back

219   Q 282 Back

220   See also para 218 below Back

221   Q 196. The organisations which Cyprus claims Turkey prevents it from joining are listed at Ev 59. Back

222   According to the Cyprus Mail. See Back

223   Q 80 [Sanberk] Back

224   Sixth Report from the Foreign Affairs Committee, Session 2001-02, Turkey, HC 606, paras 7-8 Back

225   Q 166 Back

226   Q 131 Back

227   Q 181 Back

228   Q 91  Back

229   Ibid  Back

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