Examination of Witnesses (Questions 140-159)
16 NOVEMBER 2004
MR DENIS
MACSHANE
MP AND MR
DOMINICK CHILCOTT
Q140 Mr Mackay: Finally, if I could just
press you on the question of the international direct flights
into Ercan which would obviously immensely help the tourist industry,
as has already been mentioned, and the economy in general. The
Minister is an expert on the Chicago Agreement, I am not, and
certainly Mr Chilcott will be an expert and perhaps one of you
could help me here. You suggested to us earlier that it was in
the remit of the Republic of Cyprus who flew into airports on
the island and we all know that there are Turkish flights into
Ercan and we all know that, if British tourists wish at the moment
to fly to the North, they either fly to Larnaca or they fly to
a Turkish airport and then through. Does this mean that Turkey
is acting illegally by flying into Ercan or are they getting the
permission of the Republic?
Mr MacShane: I will pass that
question to Mr Chilcott. I have an idea but he is perhaps more
technically qualified.
Mr Chilcott: The position of course
is that the Government in Ankara do not recognise the Republic
of Cyprus Government. Under the terms of the Chicago Convention,
the key provision in the convention is that an airport should
be designated as an airport suitable for receiving international
flights by the government of the territory in which the airport
is found. For the Turks in Ankara, the government that administers
the area in the north is the Government for the North of Cyprus,
so for them there is no contradiction in allowing flights airtime,
but then that would be their interpretation of the Chicago Convention.
That is not our position, as you know.
Q141 Mr Pope: I have just a brief question
about the EU aid to Northern Cyprus which I think is supposed
to be in the region of 259 million euros. What we know is that
per capita GDP in the North is about one third of that of the
Republic. We have just heard in this lengthy exchange about the
difficulties of trade, the very least that the EU should be doing
is over an aid programme but the aid programme also appears to
be stalled. Could you explain to us if it is stalled and what
we are doing to take it forward.
Mr MacShane We have agreed the amount
of money. There is some discussion on exactly how it is dispersed.
The government of the EU Member State concerned, namely the Government
of the Republic of Cyprus, is arguing that it should have a particular
interest in how it is dispersed 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
dispersed directly in the North. This is an area of continuing
discussion.
Q142 Mr Pope: I am not sure that I was
greatly enlightened by that.
Mr MacShane: This is, "Welcome
to the EU." We have insisted throughout that Brussels actually
has far fewer, far more limiting and far more hemmed-in competences
and, above all, sovereign states and their elected governments
can exercise vetoes limiting control, as done by Brussels, and
therefore the Government of the Republic of Cyprus has the same
footing as a British Government or any other EU Member State government
in telling or in seeking to tell Brussels how its money should
be dispersed. I regret that.
Q143 Mr Pope: So, it is being vetoed,
essentially?
Mr MacShane: No, it has not been
vetoed because it has not yet happened.
Mr Pope: It has not yet been agreed.
Q144 Andrew Mackinlay You seem to be
like a rabbit trapped in the headlights! Listening to my colleagues'
questions, you do not seem to know the way forward, do you? I
have been listening with bated breath.
Mr MacShane: I am delighted by
the metaphor but I do not feel like a rabbit at all. I have been
in Cyprus and worrying about Cyprus for some time and, if there
were a way forward on direct flights, on aid and on finding a
solution, believe me, nothing would give me greater pleasure than
to bring these instant solutions which are acceptable to everybody
in Cyprus to the Committee. If any colleague has a way forward
to show to me, nobody would be more pleased than I and my officials
who receive the wisdom of any colleague in telling us how we can
solve the problems we have been discussing so far.
Q145 Mr Hamilton: You will know that
this Committee visited Cyprus two-and-a-half years ago and, on
this visit just last week, we saw a very, very different picture.
Things have changed quite dramatically. By the way, we did see
some of the money that has been spent by the EU in Famagusta old
port and there were blue flags being flown thanks to EU money
having been spent there but clearly it is not enough. You mentioned
earlier in the discussion we were having about the disparity between
the incomes in Northern Cyprus and in the South and the rest of
the Republic. I understand the disparity is about four-to-one,
if I am not mistaken. In other words, the North has about one
quarter income per capita of the South on average and that is
clearly something that is a bar to integration and to economic
convergence. It is obvious that we have to see the standard of
living of the North increase fairly substantially before there
can be any economic convergence. We mentioned also the ports and
you kindly enlightened us on the Chicago Treaty and you said that
any ship could dock in any port. One of the biggest problems we
were told was that, yes, a container ship could come into Kyrenia
or into Famagusta, but it is several times more expensive to unload
containers in those ports and therefore it is a lot cheaper to
go to the ports in the South and to Larnaca and ship the goods
into the North which is something that does not please many Turkish
Cypriots. I wondered what we were doing or what the European Union
could do to make sure that those ports were brought up to scratch,
or is that something again that the Republic of Cyprus Government,
as a member of the European Union, has a veto over?
Mr MacShane: I am not an expert
in shipping trade and ports and, if the prices charged in a port
is to high, then I understand why ships may want to go and unload
elsewhere. That is partly a commercial decision. Our view, to
get away from the port question specifically is, that any form
of trade directly from any part of the island with the rest of
European Union has to benefit all of the island. Flights are a
rather more obvious example. The 259 million euros is an important
contribution but, spread over the entire population of Northern
Cyprus, it is not that much per capita. The question of developing
all the different ports in the northern part of the island to
the full international ports is a commercial consideration rather
than one of the EU to solve.
Q146 Mr Hamilton: You must agree it is
ironic that, in the poorest part of the island, it is the most
expensive place to unload goods in the ports. I am accepting that
this is a commercial issue but the fact is that the goods become
much more expensive and trade becomes more expensive in the northern
part of the island in those ports that desperately need upgrading,
but I accept the answer you have given.
Mr MacShane: It is often the case.
It is the poor who often pay the price for the success of the
rich.
Q147 Mr Hamilton: Can I move on to one
of the reasons that I think was made clear to us that most Greek
Cypriots rejected the Annan plan which was their sense that the
security question was not being answered by the Annan plan in
that it is was going to take so many years for the 40,000/45,000
Turkish troops to be removed from the island. Would you accept
that we have a very important opportunity with the discussions
on Turkey's possible accession/the discussions on Turkey joining
the European Union which I think will take place on 17 December
and I am glad to hear that our Government support Turkey's proposed
accession in the future, but is it not inconceivable that Turkish
troops should be allowed to remain in Cyprus should Turkey eventually
join the European Union? That must be a condition of Turkey joining
to see those troops removed from Cyprus sooner rather than later,
I would have thought. Do you agree?
Mr MacShane: I know that the Committee
will be aware of Article 8, paragraph (b) of the Annan Plan which
sets out very clearly the demilitarisation of the island saying
that each contingent, that is to say Turkish side and the Greek
side, will be down to 6,000 troops in the years up to 2011 and
then down to 3,000 troops all ranks up to the year 2018 or the
accession of Turkey to the EU and thereafter we will be back with
the Treaty of Guarantee, the 1960 Treaty, of 950 troops for the
Greek contingent and 650 for the Turkish contingent. I do not
really think that 650 troops is an enormous presence and that
was one of the victims, if you like, of the rejection of the Annan
Plan, a very clear timetable I agree. From now until 2011 is six
years, a little longer than the life of an English Parliament,
and 2018 is 13 years but, compared to the 30 years where there
has been no movement, that seems to me to be a gnat's eye blink
and, for me, a good reason to vote "yes".
Q148 Mr Hamilton: But that seems to be
one of the reasons that a lot of the Greeks had reservations.
Mr MacShane: I do understand that
because it changed slightly from Annans one and two. What is clear
is that, under any settlement, we should need to move back to
the original UN calls for a de facto demilitarised island.
Do not forget, the Greek Cypriots themselves, the military service
going up to 26 months and Mr Iacovou, the Foreign Minister, told
me that the cost to the Greek Cypriot budget was about 100 million
of their pounds. So, again, in Greek Cypriot terms, they are having
to maintain an excessive military burden which would have been
literally overnight solved for them had they accepted the Annan
Plan. We can come back to this question later on.
The Committee suspended from 3.46 pm to 3.59
pm for a division in the House
Q149 Mr Hamilton: Minister, we went,
as you have heard, to Famagusta and, while we were there, we managed
to have a look at the deserted and ghost town of Varosha which
obviously is something of deep concern to Greek Cypriots and deep
anger and, as you know, Varosha is completely sealed off and looks
like something out of a Hollywood movie after a nuclear explosion.
It is absolutely horrifying; we were told that there were rats
the size of cats there and of course we were not allowed in. It
is not very nice for the troops that are garrisoned there; it
is used as a Turkish Army garrison. My question really relates
to the differences between Annan three and Annan five and, as
I understand it, Annan three proposed that all Turkish troops
be removed from the Island of Cyprus after Turkey's accession
to the European Union or within a certain limited period of years.
Yet, that plan changed between Annan three and Annan five and
I wondered whether you could explain the reasons for that change.
What was it that prompted that change? Surely Annan three would
have been quite saleable to the Greek Cypriots and yet Annan five
clearly was not.
Mr MacShane: I think that is a
question you would have to put to the leaders of the two communities
at the time that Annan three was discussed. As I said, Annan five
was rejected in the referendum in April but the previous Annan
four plan had not been agreed or supported by the Turkish Cypriot
political leadership or arrived at the moment where they might
have put to the test of a joint referendum. So, we are now back
in Annan five at the status quo of the Treaty of Guarantee, the
Treaty of London technically of 1960. I personally—and it
is a personal point of view—cannot get hugely worked up
about 650 troops. I just do not see that as a sticking point.
I understand why two divisions of more than 30,000 troops are
there today from the Turkish Army, it is obviously a problem,
but, if I can express a personal point of view, the difference
between 650 under the Treaty of Guarantee which was not contested
as such by previous political leadership generations.
Q150 Mr Hamilton: I can understand your
personal view but, with respect, you did not have to live with
the invasion in 1974 and that is what informed so many Greek Cypriots
today.
Mr MacShane: Yes but it is said
in Cyprus that no Greek Cypriot can remember what happened before
1974 and no Turkish Cypriot can forget what happened before 1974.
So, the pre-1974 stories, as I am sure you found out in discussions
with friends in Northern Cyprus, are vividly different from some
of the perceptions that are offered from the Southern part of
the island.
Q151 Mr Mackay: Minister, I would like
to take you back to the answers which you gave to Mr Pope a minute
ago about this very welcome EU aid package which amounts to the
sum total of 259 million euros. As you will be painfully aware,
this money is not coming through at the moment and I think you
said to Mr Pope that you were using your best endeavours to ensure
that it did come through and then, under further examination by
Mr Pope, you explained that it was the Republic of Cyprus that
would wish to ensure—I think I quote you correctly—that
the aid only came if it was going to projects over which it had
control. You and I know that it has no control over any projects
in the North for reasons that are self-evident. So, if they stick
to that point, they have a veto and the aid will not come; is
that correct?
Mr MacShane: Yes.
Q152 Mr Mackay: The EU cannot be relaxed
about that state of affairs.
Mr MacShane: No, of course not.
Q153 Mr Mackay: Because you have already
agreed with me that the economic well being of the North and the
bringing of it more into line with the South is essential to any
settlement and here is an EU aid project to the North which is
being blocked and no doubt the Commission could ensure that the
money was put to correct use. There is not the suggestion that
it would be fraudulently used, it is just merely that the Republic
of Cyprus does not have control over the project.
Mr MacShane: We are at the moment
in discussions between the 25 Member States of the European Union.
At the Committee of all the chief government representatives in
Brussels that was held on 6 October, the presidency of the European
Union currently held by the Netherlands said that there should
be an effort to get a set of conclusions for the General Affairs
External Relations Council of November which would include the
aid regulations and it is intended by the Council to adopt the
trade regulation by a specific date. Discussions to find the exact
language that will give effect to that wish of the presidency
at the beginning of October are still continuing. I do not want
to characterise one particular government as being responsible
because I think it is unhelpful in what are continuing negotiations
but 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.
Q154 Mr Mackay: Mr Pope suggested to
you that the Republic of Cyprus was vetoing. I am inclined to
agree with that suggestion and you said, "No, merely delaying."
When does delay become a veto?
Mr MacShane: The processes of
the European Union are long and tortuous. At what point putting
up objections that one government considers legitimate constitutes
a veto is not always clear. We have not reached that stage yet.
Q155 Mr Mackay: But we are going to avoid
what you and I earlier agreed would be highly dangerous?
Mr MacShane: We are not yet able
to discharge the obligations set out in the Council decision of
26 April which was before the ten new Member States joined which
was to open up particularly trade relationships with the North
of Cyprus and to disperse the 259 million Euros of aid, but I
stress again that that is the nature of the European Union because
it is not a super state and it is not a federal structure. Brussels
has very limited power. It is 25 governments having to agree and,
if one of them will not agree, that blocks what 24 others may
wish to do and, as soon as everybody in Britain understands that
point and stops propagating myths, the better.
Q156 Mr Mackay: You would agree that
it is important for this Committee, in reaching its conclusions,
to know just where that block is coming from?
Mr MacShane: I think I can only
report to the Committee that at the moment in the discussion between
the permanent representatives and the 25 Member States in Brussels,
no agreement has been reached and, in my conversation with the
Greek Government representations on and off since April, it has
been put forcibly to me that they are not content with the proposals
for direct trade to the north and not yet content with language
on how the trade should be dispersed.
Q157 Mr Mackay: Direct aid as well, it
is not just trade. You are saying they are not content with direct
aid.
Mr MacShane: They are not content
yet with the language on aspects of the disbursement of the use
of the 259 million Euros of aid. I should point out that it may
be of interest to the Committee that, as important as they say
it is, it has not been raised as a major issue with me by friends
in Northern Cyprus. The Turkish Government itself gives about
300 million euros worth of aid to Northern Cyprus every year.
So, the European Union packet of money would certainly be welcomed
but, by far—
Q158 Mr Mackay: It would double it.
Mr MacShane: It would double it
for one year. We, as a government, believe we should focus much,
much more on trade and, as I said, trade 360 degrees around the
compass, north and south from the island, east and west from the
island, and from all parts of the island.
Q159 Chairman: Since that agreement on
28 April, have any tangible benefits accrued to the Turkish Cypriot
community?
Mr MacShane: There has been a
Green Line Regulation which allows passage between the North and
South.
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