Examination of Witnesses (Questions 120-139)
16 NOVEMBER 2004
MR DENIS
MACSHANE
MP AND MR
DOMINICK CHILCOTT
Q120 Mr Maples: Minister, I was one of
the five of us who spent most of last week in Cyprus and I think
we came to some pretty clear views about what had happened before
the referendum and what I would really like to focus on is some
of the ways forward and I think some of my colleagues will pick
some of those up. I think we are, speaking for myself, particularly
supportive of the stances that the Government and the European
Union took after the referendum of trying to open up the economy
of the North particularly through trade, not just with the south
which they say is not so important but trade with the rest of
the European Union. Their biggest industry is tourism and what
they are primarily interested in is opening their airport and
their ports, possibly incorporating Famagusta into some sort of
deal with the South and certainly Kyrenia. Those measures were
largely agreed upon by the European Union before 1 May but seemed
to have stalled and I wonder if you could explain to us why they
are stalled and how you think that process is going particularly
in relation to the airport and ports issue of those being opened
up to foreign trade.
Mr MacShane: There were no specific
measures as such agreed by the European Union. What there was
was a statement from the European Council of Ministers on 26 April
which talked about opening trade with the North and making clear
that the Turkish Cypriot community who had voted for the international
plan which was endorsed by the EU should not, as it were, be punished
because, in the South, the vote had been no. Since then, the EU
has put forward two measures: one to spend 259 million euros developing
the north and the second to seek improved trade contacts directly
between the businessmen and the tourist centres of the northern
part of the island with the rest of Europe. Those at the moment
are under discussion in Brussels because there is a difference
of view amongst Council members on how to take those forward.
Q121 Mr Maples: Let us go specifically
into the ports and airport issue which the Turkish Cypriots we
met made clear to us are much more important than cross-border
trade. They are very grateful for the 259 million euros but they
felt that trade was potentially far more valuable than that. Is
it within the European Union's competence to resolve this issue
or does it require the Republic of Cyprus to designate specific
ports? Their argument is that this is a matter for their sovereignty.
Is that a view that the British Government take or do we think
that is something that the European Union could resolve and, if
so, is it a majority voting matter because the Republic of Cyprus
have a veto?
Mr MacShane: We obviously are
not going to go down the road of being in contravention of international
law. We are exploring the possibility of direct flights to the
North with our lawyers but, you are quite right, we hear a lot
of language in this country about the necessity of obtaining vetoes
and not having Brussels tell us what to do, but I am afraid that
what is sauce for the British goose is sauce for the Greek Cypriot
gander. That is to say that, as a sovereign UN recognised state,
Cyprus controls its aerospace and it has the veto on matters of
foreign policy. These are all issues which many people in this
country insisted should be the basis on which the European Union
operates.
Q122 Mr Maples: I follow that but, on
the specific question of the two ports and the airport, are those
matters over which it is our view of the law that the Republic
of Cyprus can effectively veto or are they matters on which either
there could be a majority vote or alternatively that are within
the European Union's competence to say, "We are designating
such-and-such a port because you are depriving a free trade of
a chunk of the European Union whether it is in or not" and
I agree that it is in with the acquis suspended. I am just interested
in the procedure. I am interested to know whether this is something
that the other members of the European Union can insist on and
make happen or whether we believe that the Republic of Cyprus
has a veto because obviously depending on which of those views
is correct dictates one's tactics in trying to resolve it.
Mr MacShane: The EU cannot tell
a Member State, "You must open your airports" to flights
you do not want to receive." Were that to be dictated to
London, I am sure there are colleagues in this room who would
be the first to be jumping up and down about it. That is the price
of veto power. Any question of flights is a matter for another
international treaty known loosely as the Chicago Convention,
it is not an EU competence. That is based on the authority of
sovereign governments which, in the case of Cyprus, resides in
the Republic of Cyprus, the one recognised UN state. That being
said, we are working actively with officials in the Commission
and let me say with colleagues and friends in the Cypriot Government
to see what possibilities there are to allow trade 360 degrees
around the compass in Cyprus to take place. It is self-evident
that the most important part of the Cypriot economy in terms of
the island as a whole is tourism. It is self-evident in my judgment
therefore that the more internationally viable the recognised
airports there are in Cyprus to take tourist passengers the better
but, no, to revert to your original point, it is the Chicago Convention,
it is not an EU competence and, no, the EU has always insisted
in this country very, very rigorously on veto rights which means
that we do not have the competence to impose what I think a number
of Member States would wish to be a different arrangement.
Q123 Mr Maples: I want to make sure that
I understand this. So, it is our view of the European Union law
that this remains within the right of the Republic of Cyprus to
say, "We are not opening Ercan Airport" or "we
are not opening Kyrenia or Famagusta to international trade"
and there is nothing in the treaties or the law that we can invoke
against that. Is that our view?
Mr MacShane: On airports, yes.
On ports, there is not a Chicago Convention. That, to some extent,
is more fluid. Yes, the Chicago Convention, as I understand it,
does give the UN recognised authority over Cyprus, namely the
Republic of Cyprus Government, the power to withhold permission
to designate Ercan in particular as an international flight designated
airport.
Q124 Mr Maples: For my final question,
I would like to come back to this issue of time. Is the reason
that this is held up in the Council because the Republic of Cyprus
is refusing for the time being to agree?
Mr MacShane: I would say that
it would be fair to say that the Republic of Cyprus is not facilitating
the search, certainly by my officials, to find a solution that
would increase trade and direct flights to all parts of the island.
We actually want to depoliticise this and simply make it a commercial
question. If there are good commercial reasons to land at any
airport in Cyprus—and I am not naming any particular one—then
we think it is in the interests of all Cypriot people so to do.
Q125 Mr Maples: I understand that but
my question was, in that package that the European Council agreed
on 25 or 26 April was very specifically opening up these ports
and airports. That has been under discussion for six or seven
months and has not happened. The Greek Cypriots made clear to
us that they have no problem at all with the 259 million euros
of aid but they do have a problem with the ports and airports
issue. So, am I to understand that the reason that the opening
up of, let us just say specifically, Ercan Airport is not happening
is because, as of now and so far, the Republic of Cyprus Government
has held that up using a perfectly legitimate power to do so?
Mr MacShane: 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.
Chairman: I did not quite understand
your reply to Mr Maples in respect of the ports.
Mr Maples: I asked him specifically on
the airport and he said that the officials of the Republic were
not working with us to find a solution.
Q126 Chairman: But, on the ports, you
said that the position was more fluid. Did you say that in effect
there was also a veto power on the part of the Republic of Cyprus
in respect of ports?
Mr MacShane: No. There is not
an international treaty governing port operations but the trades
that logically flows from Cyprus are not container ships from
the UK pitching up in the North of Cyprus, it is actually between
Cyprus and its closest neighbours Turkey and there you have the
problem of the relationship between Turkey and the Government
of the Republic of Cyprus which is a blockage to the trade.
Q127 Mr Olner: I was one of the members
of the Committee who were out in Cyprus last week and, as Mr Maples
has said, there were press reports over there last week speaking
of direct flights between the USA and Northern Cyprus which might
start as early as the New Year. I do not think the Americans will
be happy to do it if we cannot do it.
Mr MacShane: There is talk about
this, endless talk. I read telegrams from Cyprus every day and
try and follow the reports in the papers that are published in
Cyprus. The United States has of course a direct bilateral relationship.
It may involve touching down in Turkey and then coming on into
Ercan. That is one way of doing it but it is not direct flights
in the European sense. We will have to wait and see. That has
always been possible, as I understand it.
Mr Chilcott: What the Americans
are looking at is whether their bilateral air service agreement
with Turkey would allow them to have organised scheduled flights
from airports in Turkey that touch down in Northern Cyprus on
their way to the United States because the only requirement, I
understand, of American law for the last airport used before a
flight lands in the United States is that it should meet the security
standard set by the US authorities. So, provided there is a route
available, they understand that, under their bilateral agreement
with Turkey, they could fly from Turkey via an airport in the
North, presumably Ercan, directly to an airport in the United
States.
Q128 Mr Olner: Can I assume that we have
a bilateral agreement with Turkey as well?
Mr MacShane: As I understand,
it has always been possible to fly to Ercan via Turkey. That is
not what the Turkish Cypriots want; they want direct flights;
they want scheduled flights; they do not want a disguised landing
and I think their demand is perfectly reasonable.
Q129 Mr Olner: I know these are early
days since the referendum but I have read what you have said and
I know that you were in Cyprus the week before ourselves and you
are absolutely right that there is no point in anointing one and
rewarding another. That is extremely wrong language. Talking to
people, I felt that there was a need in their minds from both
sides in Cyprus that something needed to be seen to be being done
and the weapon for the achievements of Cyprus is trade and industry
and cross-border trade and industry. When do you think we will
be able to see mechanisms, either the growth through the EU or
whether they are able to achieve that in order that ordinary people,
ordinary traders, can actually see that there is another dimension
out of Cyprus because of the European Union?
Mr MacShane: I think that is a
very important point and what we do want to see is the material
existence of all the people resident in the island improve and
we need to bridge the prosperity gap between the North and the
South which, as I am sure you saw with your own eyes, is significant.
That is why the aid and trade regulations are being discussed.
I wish I could inform the Committee that they have been agreed
but I cannot and we will keep pushing as the British Government
both for the aid disbursement and for trade regulation that will
allow full trading relationships between them. As I say, I try
to stop using the words "North" and "South",
the "Turkish Cypriot" and the "Greek Cypriot"
communities, it is simply between businessmen and individuals
and students and people who want to get on with their business
as we do in the rest of Europe. We will have, after 17 December,
assuming, as I strongly do, that there is a clear and unambiguous
"yes" to the start of negotiations with Turkey, a new
context. We will have Cyprus as a member of the EU and we will
have Turkey knocking on the door to become a member of the EU.
That has to inject certain new dynamics. We are putting to work
our best lawyers, our trade lawyers, our international aviation
lawyers, and we are discussing this completely transparently with
all concerned to see if solutions can be found.
Q130 Mr Olner: I think it is a very big
turning point for the accession in the roadmap, if you like, for
Turkey to become a member of the European Union family but that
is going to take some time. I hope we are not thinking of putting
everything in Cyprus on the back burner until Turkey actually
joins the European Union.
Mr MacShane: No. On the contrary,
when I was in Cyprus—and I repeated these points in an adjournment
debate with the Member for Tooting (Tom Cox) the other week—we
say as a government, "The sooner the better." We should
not leave this for some final settlement at the end of negotiation
with Turkey. Turkey herself has turned out very positive and powerful
signals in this area. So, too, can the Government of the Republic
of Cyprus. I urged President Papadopoulos and Mr Talat to talk
directly. Mr Talat of course is no longer heading the Government;
we are moving towards new elections we think early next year.
If they cannot directly meet, they have some very brilliant and
able advisers who can meet if not in the island then somewhere
else. That was my personal plea, to talk, talk/jaw, jaw, better
than taking up positions and staying in their respective trenches.
Q131 Mr Mackay: I want to just underline
what Mr Olner has just said, that there is an awful danger of
lethargy, is there not, if we allow the Turkish application to
get too mixed up with the Cypriot settlement because we all know
that everyone in this Parliament welcomes the Turkish application
and shares your view that we hope will be a positive mood on 17
December but we all know that that application is going to take
a very long time inevitably and it would not be fair to allow
that to start a settlement and you can underline that, I hope.
Mr MacShane: I have just done
an interview on Turkish CNN making almost exactly the point I
have been making now, that Ankara should seek to solve or to make
its contribution to solving the Cyprus problem earlier rather
than later and send out the positive signals that would be very
well received in the rest of Europe because, while certainly British
political opinion is united on the question of Turkish application,
the Committee will know full well from other Member States, not
at the level of heads of government but there are powerful political
forces opposing Turkey's bid to become an EU Member State. So,
I think 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. Equally, I have
to say that the same message is true for everybody in Cyprus to
drop entrenched positions and find ways of moving forward. The
only losers remain the people of Cyprus.
Q132 Mr Mackay: You rightly said a few
moments back that a settlement can only happen if there is some
economic convergence and you will be aware, as we are, having
just returned from Cyprus that there is a major gap between the
North and South and presumably you can see that this can only
realistically happen if there is much freer trading law and Mr
Maples has already mentioned the opening up of the ports and hopefully
the airport as well. In answer to Mr Maples—and I think
I am quoting you correctly—you said there were differences
of view within the European Union which are delaying this procedure
and, as you know, it is six, nearly seven months since talks started.
What are those differences of view and who are they with?
Mr MacShane: When you operate
the European Union on the basis of vetoes, that gives one country
tremendous authority to block anything it does not want to see
happen.
Q133 Mr Mackay: So, your real answer
to Mr Maples's earlier questions was that there is the threat
of the Republic of Cyprus veto which is delaying progress which
everybody believes should happen and we found many people in the
South who also felt this was important economic convergence.
Mr MacShane: It is clear from
my conversations with friends in the Government of Cyprus that
they do not attach the same importance to open free trade 360
degrees around the compass from the island that the British Government
do and I imagine that their representatives in Brussels will reflect
that point of view.
Q134 Mr Mackay: Just to press you a little
further on the ports and the airport, I think I have interpreted
you correctly, although you may put me right, when you said there
was a difference between the ports and the airport and you referred
to the Chicago Convention on the airport—and we might want
to come back to that in a minute—and that there is no such
Chicago Convention on ports. So, that means that there is a way
for the European Union, if it so wants, to ensure free trade through
the ports of Kyrenia and Famagusta. Can we have it quite clear
as to whether there is that veto that the Republic—
Mr MacShane: No.
Q135 Mr Mackay: There is no veto, so
it could be done under European Union by what, qualified majority
voting?
Mr MacShane: No.
Q136 Mr Mackay: Or by the Commission
proceeding?
Mr MacShane: To agree a common
trade regulation vis-a"-vis Cyprus requires unanimity. Obviously,
any Member State if it so chooses, any individual ship owner if
he so chooses, can sail into any port in Northern Cyprus. What
we would prefer and what we are arguing for very strongly is a
new trade regulation that allows the normal trading rules of the
EU to be extended to the northern part of the island.
Q137 Mr Mackay: So, if that cannot be
achieved, clearly you want it to be achieved, the United Kingdom
and other individual Member States would go it alone.
Mr MacShane: As I said, we do
not want to make this a question of political confrontation, we
want to make this purely commercial and that is how the European
Union as a whole works, does it not? It creates so-called level
playing fields, to use that cliche«. There is nothing today
to stop any ship owner or any ship docking and unloading in Northern
Cyprus. We would not know about it.
Q138 Mr Mackay: Let us just move to the
problem of delay. I am sure that you, like me, are more worried
about voids and there is now a void developing as the six becomes
seven months and you will run into a year and the situation will
rapidly deteriorate. There does need to be movement, does there
not? If there is no movement, there will be very serious political
consequences. I am not quite clear from what you have said so
far how you are going to achieve that movement.
Mr MacShane: We are arguing for
the moment and officials are arguing for it and I am arguing for
it publicly on the record in Cyprus, European Capitals and obviously
here in the House of Commons but we are one voice.
Q139 Mr Mackay: If, by definition, you
say there is an argument which is legitimate, there must be two
sides to the argument. Somebody must be arguing against it, otherwise
we would not resolve the problem.
Mr MacShane: The Government of
the Republic of Cyprus has not so far seen its way to agree to
a comprehensive trade regulation to be adopted by the European
Council. That is in the hands of intense high-level discussion
amongst officials. I would hope that it could be resolved before
17 December, though I cannot guarantee to the Committee that that
will be the case, and then your point is a very valid one, which
is a point which I stressed in my visit down there and, as I say,
it is nearly 30 years since I have been visiting Cyprus, you could
feel that width of stagnation/stalemate in the air. As I say,
I hope to goodness that there is not a Europe Minister for Britain
in 30 years coming down and still sadly crossing the buffer zone,
talking to the British soldiers on the toll there and talking
to the successors of President Papadopoulos and Mr Talat, but
it has gone on for 30 years.
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