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10 Nov 2009 : Column 26WH—continued

the Turkish Republic of Northern Cyprus.

An additional complication is the question of the treaty of guarantee. President Christofias has said that it is anachronistic and should go as part of any solution. For the Turkish Cypriots, however, the treaty of guarantee is a red line. There could be other ways of guaranteeing a solution and security for both Greek and Turkish Cypriots, but that is a very difficult one to bridge. One option suggested to us is for the treaty of guarantee to be phased out with Turkish accession to the EU, and for a treaty of implementation for the specific details of any settlement to be considered.

I was pleased to read, in the answer to my parliamentary question on the point, that the UK will not be an obstacle on the issue of security and guarantees. It seems to me that there are three issues requiring guarantee in the event of a solution. I am referring to a political guarantee for the indivisibility of the federation, which the EU can provide, and a guarantee for the implementation of the agreement, which could be a UN Security Council resolution. The most difficult issue is the personal security guarantee, including the removal of Turkish troops and the future role of UNFICYP-the UN Peace-Keeping Force in Cyprus. UNFICYP's role could be a new mandate to support implementation and federal policy. To see what could be done and, equally, where UNFICYP went wrong from the outset in 1964, I recommend Martin Packard's diary of 1964, "Getting It Wrong". He was working on a tripartite basis to try to bridge the gap in the troubles of '63 and '64.

It is something of a paradox that Turkey has a seat on the UN Security Council while continuing the occupation of northern Cyprus. It seems very much as though the current effort is the last throw of the dice for the UN. It sees the natural timetable to which I referred: if progress is not made by next April, the UN may well call it a day. The Turkish Cypriots would like the UN to act as arbitrators, although that is complete anathema for the Greek Cypriots post the Annan plan. Annan changed 60 points to create the final and fifth plan, which led to its ultimate rejection.

Mediation might be a more appropriate way of analysing what the UN should do, but that role has been badly compromised by a professional hacking job into the UN team's computer and the downloading of all the internal UN memorandums and e-mails, which are
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being gleefully published on the drip in the rejectionist Phileleftheros newspaper, with the clear intention of undermining the process. Instead of condemning the hacking, the Cypriot view was that UN Special Representative Alexander Downer should be more careful. That was a most outrageous attempt to derail the talks and interfere with an international body that is there to assist. The perpetrator of the crime-for that is what it was-has not been identified and dealt with firmly, as should have been the case. In the north, people see a degree of irony, as they remember the Turkish "deep state" leaking e-mails from pro-solution Turkish Cypriots.

The UN team has been strengthened by the appointment of Leopold Maurer as Mr. Barroso's special representative to advise the UN team on EU acquis issues. There is a further new appointment for a team member to engage with Cypriot women's organisations, recognising that, proportionately, women voted no to a greater degree than men did in the Annan referendum.

UNFICYP continues to play a key role. It is still needed because the green line is inherently unstable. Minor incidents are stamped on very hard, and UNFICYP believes that without it, there would be a very rapid escalation into hostilities. UNFICYP continues to estimate the strength of Turkish forces on the island at about 25,000-many fewer than the 35,000 or more claimed by both sides.

The next UK troop rotation will bring a Territorial Army unit from Northern Ireland to Cyprus, which should be interesting, considering the experience in Northern Ireland.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): Is my hon. Friend aware that part of any settlement could be that the people who were displaced from their homes have a legal right to go back and claim that property? British people who have bought such property may be unaware of that, so there is a responsibility on those selling property in the northern part of Cyprus to British people to let them know that it is a distinct possibility.

Mr. Dismore: My hon. Friend makes an important point, and I will say a little about property shortly.

We should acknowledge the cost of Operation Tosca-the UK contribution to UNFICYP-to the UK taxpayer. That subsidy from the UK to the island is often overlooked. Last year the cost was £16 million, of which only £2.5 million was reimbursed by the UN. I was pleased to hear that the refurbishment of the Ledra Palace hotel, used to accommodate our troops, is pretty well complete. That was long overdue-I raised the matter a couple of years ago-and it has been done at no cost to the UK taxpayer.

We were very impressed by the new EU Commission representative, Androulla Kaminara. She is very enthusiastic and energetic and is doing a great deal to try to improve the knowledge of the EU, particularly in respect of the north. The lack of knowledge and understanding of the EU in that regard has been a considerable barrier to the talks. As a consequence of that and other factors, including a general lack of progress as perceived by Turkish Cypriots, confidence in the EU has been waning in the north.

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The €259 million has not had the impact hoped for, as it has taken so long to disburse. Years on, by the end of September 2009, €134 million-just 52 per cent. of the programme-had been contracted. Although the expectation is that the rest will be by the end of the year, that is still short of delivery of the projects involved, and those projects are not potentially visible either.

Mr. David Burrowes (Enfield, Southgate) (Con): I thank the hon. Gentleman for securing this annual debate, in which I welcome the opportunity to participate. Does he share my concern that those euros should also be spent on restoring the cultural and religious heritage, which has been ignored or decimated in many places? Would he also like to pick up on, as he did last year, the visit that he and I made in relation to the four Maronite villages in the north? Particularly in terms of the villages of Agia Marina and Asomatos, there is a lack of access for the Maronites to worship, and it is important for confidence building that access is given.

Mr. Dismore: The hon. Gentleman is right. It is important to remember when we talk about a bicommunal island that in fact there are more than two communities in Cyprus. The Maronites, the Armenians, the Latins and even people from the UK form part of the community of Cyprus. The hon. Gentleman is right to remind us of the particular minority to which he referred.

One of Ms Kaminara's initiatives is to take editors of newspapers and broadcast media from both sides of the green line to Brussels and encourage them to be better informed about the EU. One issue that we came across concerned the bicommunal Nicosia master plan and, in particular, the need for work in the buffer zone. EU grants for work for the north have to go through the enlargement directorate, and for the south through the regional development directorate. That means that it is virtually impossible to do anything useful in the buffer zone, because the two sources of funding do not seem able to talk to each other. For example, surveying work is needed to work out what could happen after a solution. That should be resolved within the Commission.

The key question for the EU, though, is its role in supporting the negotiations and, in particular, the attitude that it takes towards the December Turkish accession review. Lord Hannay, writing for the Centre for European Reform, commented that Turkish EU accession is inseparably linked to a Cyprus solution. I would put it the other way round. Although a solution should not depend on Turkish accession, a solution would undoubtedly help Turkey's EU hopes, and Turkey will not accede without a solution.

It seems inevitable that there will be the usual EU fudge, which will seriously anger Greek Cypriots who are expecting leverage on Turkey, which they believe gets away with everything, including non-compliance with international agreements such as the 2005 declaration and the Ankara protocol, on which there has been no progress at all. In that context, it is important to remember that the ports were open from 1974 to 1987, including four years after the TRNC's unilateral declaration of independence. We are therefore talking about an economic sanction, not a recognition issue; it was not a recognition issue during those four years. The offer from the Republic to Turkish Cypriots was that Famagusta port could be reopened under EU management and that they could
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use Larnaca under EU control too, but that was not accepted. There has also been considerable harassment by Turkey of oil exploration vessels not flagged by the Republic but working under its licence.

If the European Council decides to avoid standing up to Turkey, the least worst option would be for the EU to put the review on hold for six months, in the light of the negotiations, to see whether any progress is made by April, because if there is no progress by then, there probably never will be. At that stage, Turkish accession aspirations would in effect be in an indefinite limbo, as there would be inevitable blocks on further progress on acquis chapters.

Property issues are fundamental to the outcome of the negotiations. According to the most recent press statements from President Christofias, the sides are not ready to discuss the issue in depth, although some convergence has been achieved. The issue is inevitably linked to the territorial settlement, because the more territory that goes back to the Greek Cypriots, the fewer people would then have to consider living under Turkish Cypriot administration. The two sides are starting from diametrically opposed positions on property, but I suspect that in practice the net results of either proposal would not be far apart.

The Turkish Cypriots expect a dirigiste system, with maximum numbers laid down as to, for example, the number of Greek Cypriots who would be allowed to return to live under Turkish Cypriot administration and the amount of property that would be owned by Turkish Cypriots as opposed to Greek Cypriots. The Turkish Cypriots would seek derogations from the acquis to institutionalise these, but it seems to me that any such derogations would be bound to fail, either because they were too rigid and would prevent inward investment or because they were too lax and would be easily avoided.

The Greek Cypriot position starts from the recognition of individual property rights and the fact that everybody should be able to make their own decisions. The hierarchy is: first, restitution; secondly, choice of exchange; and thirdly, compensation. It is for the state to provide for the current user. In theory, Mr. Talat accepts individual property rights, too, but he wants superior rights to be given to the Turkish Cypriot occupier, rather than the Greek Cypriot owner of a property. He wants no restitution, although he would accept an Annan-based formula.

George Lordos's research and consequent proposals are interesting and worthy of further consideration. His view is that individuals should be allowed to make their own minds up during a three-year hiatus, but they could be influenced, for example, by tax concessions and speeded-up planning permissions to encourage them to exchange property north and south. That is based on the principle that few Greek Cypriots would in practice want to live under a Turkish Cypriot Administration. Furthermore, most Turkish Cypriots who were previously allocated Greek Cypriot properties in the north own homes and land in the south, although that would not, of course, apply to Turkish settlers. Some people would need to be rehoused, but bearing in mind the respective balance of property and the value of property in the north and south, the cost could be manageable. Compulsory denial of rights would be avoided or at worst minimised. Residential ownership rights could be ranked, for example, by reference to whether the claimant originally lived in the property.

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The court cases proceed in the European Court of Human Rights, where Turkey has received a battering. The Court will consider the question whether the Turkish Cypriot property commission is a valid domestic remedy on 18 November, although the judgment is likely to be many months off. Over the past three years, Greek Cypriots have lodged 422 cases with the commission. Seventy-five cases have been resolved, including five with restitution. Generally, compensation is paid at between only 5 and 10 per cent. of the value of the property, with nothing for loss of use. So far, total compensation is of the order of £35 million. The Orams case has obviously had an impact, but it has been misplayed by the Turkish Cypriots, who could have used it to illustrate that there was a real problem on property, which necessitated a solution, rather than to attack the judges for their findings.

There is also the question of the cost of compensation, should anything other than restitution or property exchange be the norm. The first question is where the billions necessary would come from; the second is what impact the huge sums that would be put into circulation as a result would have on the island's economy. If all the property in the north was subject to expropriation and compensation, the bill would be unaffordable.

One issue that the UK should help to resolve is the Turkish Cypriot claim to 55 per cent. of Varosha, which is based on the fact that the land belonged to EVKAF-the Board of Pious Foundations in Cyprus-before independence. In 1960, however, the UK provided £1.5 million to pay off that claim as part of the independence settlement.

The Turkish Cypriot economy is nothing short of a basket case and is heavily subsidised by Turkey. Over the past six years, according to Prime Minister Erdogan, it has been subsidised at an average of $523 million per year. In 2009, the figure was $815 million-a huge drain on Turkey's economy. There is still little trade across the green line. Most of the money going north is made up of remittances from Turkish Cypriot workers who are taking their wages back.

There is unrecorded trade to evade tax, as well as illegal trade in prohibited items, such as animal products. There is Greek Cypriot consumer resistance to goods that many say are produced through the use of stolen property. Business sources in the north tell us that Turkish army base retail outlets undercut Turkish Cypriot businesses in the sale of consumer goods, including foodstuffs, at prices well below those in legitimate Turkish Cypriot shops. The Turkish Cypriot minimum wage is also undercut by businesses in Turkey's immediate southern coastal area, where there is no minimum wage. The construction boom, which was fuelled by post-Annan development on Greek Cypriot land, has ended, in large part because of the consequences of the Orams case and the world economic downturn.

There remain huge human rights issues in the north. Turkish Cypriot secular culture is clashing with settler culture. The CTP-the Republican Turkish party-did badly in the parliamentary elections last year as a consequence of its decision to try to implement the EU acquis in the north, which brought hardship to Turkish Cypriots, with no real benefits, as they saw it, from the EU.

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There is unrest and industrial action against the UBP-the National Unity party-Government of Mr. Eroglu. That is now worsening and could be compared to the unrest that took place before the opening of the green line, although this time without the participation of the CTP. Hospitals, ports and even Parliament have been closed by strikes. That has partly been caused because Turkey's economic subsidy is under pressure, with the unjustifiably large number of public employees in the north being questioned. It also has a lot to do with the increasing numbers of people migrating from Turkey.

In the absence of a solution, things do not look good for Mr. Talat's re-election prospects. If Mr. Talat loses and Mr. Eroglu wins, it will be hard for President Christofias to negotiate with Mr. Eroglu, although Turkey will still have the final say. Even at a practical level, Mr. Eroglu does not speak English. On the policy level, he is much more hard-line than Mr. Talat on issues that make no difference to Turkey, but which are vital to achieve a workable solution. The general view is that if there is no settlement before the election and Mr. Talat loses, the negotiations will be at an effective end.

The UN Committee on Missing Persons continues its work, although there is a significant backlog in its anthropological laboratory on the piecing together of the various remains. None the less, the committee told us that it was not really practical to expand the operation. Altogether the bicommunal teams have exhumed 570 sets of remains from both sides of the green line and returned the remains of 179 people to their families-135 Greek Cypriots and 44 Turkish Cypriots. They are perennially in the hunt for money, requiring between €2.2 million and €2.4 million a year to function. The EU has just given the teams €2 million for the next two years, but they are still €1 million short for next year. Since the committee started its work many years ago, the UK has given it $159,000, but it is a long time since we last gave it a grant, and it is time that we gave it another one.

Last summer, the remains of several high-profile victims were identified, including the five Cypriot national guardsmen who were depicted kneeling in fear in the infamous picture taken by a Turkish photographer. There was an outcry from some politicians in the south, although the bereaved families maintained a dignified silence. However, the political response led to a reaction from the Turkish army, which has withdrawn from its tentatively developing approach of permitting excavations on military land and reverted to its original non-committal wait-and-see position of proceeding after all civilian sites have been exhausted. Previously, the army said that it would consider a case if it had been documented, but there have been no excavations on military land so far.

Mr. Love: Does my hon. Friend agree that confidence-building measures, such as providing funding for work on missing people and joint ventures between the Greek Cypriot and Turkish Cypriot communities, are hopeful signs that people are coming together on Cyprus? Should not the British Government do more to foster and sponsor such activities?

Mr. Dismore: I am grateful to my hon. Friend for his comments and I entirely agree. I hope that the Minister will be able to find a little cash in the Foreign Office
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budget to provide the initiatives that I mentioned with at least token support, if not more substantive support.

There are strong rumours, which have been reported in Kathimerini and Afrika, that up to 1,000 Greek Cypriots from the Kyrenia area could be buried at a major military site at Lapithos. Journalists are investigating that military zone, which is apparently mined.

The European Court of Human Rights case of Varnava has been decided in the grand chamber. It was ruled that Committee on Missing Persons work is inadequate for an investigation into compliance with article 5, which requires a proper inquiry into deaths at the hands of the state, and Turkey will have to respond to that. However, the Court imposed a limitation block on any new cases, except those brought to it soon after remains are partially identified to families.

Relatives are agitating for more information about the circumstances of deaths. In addition to the missing, there are 1,000 known Greek Cypriot dead, including 500 in the north, and 30 Turkish Cypriot known dead whose bodies have not been recovered. Nowadays, such people would be classed as missing. The committee's total objective is therefore to deal with the cases of about 2,200 missing and known dead.

Any discussion about Cyprus inevitably raises the question whether Turkey is the key to a solution. The Greek Cypriots complain of Turkey's provocative statements, such as Mr. Erdogan's recent comments about two republics, two states and two peoples. Mr. Talat probably has more room to manoeuvre than is generally accepted in the south, although in the end Turkey will undoubtedly have to approve any agreements, particularly on security.

There remains, of course, the issue of the military occupation. Clearly, there have recently been rapid foreign policy developments in Turkey under Prime Minister Erdogan-for example, towards Armenia and Israel and on broadcasting in Kurdish. Given that Turkey is not as yet an entirely democratic country, it can switch its positions fast.

Some trade is taking place. In 2007, exports from Turkey to the Republic were worth $1.4 million, while exports from the Republic to Turkey were worth $8.6 million. However, that is only a tiny fraction of what would be possible if we had a solution that opened Turkish ports and markets to Cypriot trade. Turkey has said that it would like to see a solution by December, and we will have to see whether it makes any concessions by then, although it has now conceded that there will not be a settlement by the year end and it maintains that the negotiations cannot be open-ended.

One thing that I have not mentioned is the peace dividend, which would be substantial in terms of the island's economy and the income of individual families. The International Peace Research Institute in Oslo found that the benefit to the island of a solution would be €1.8 billion per year-equivalent to €5,500 for every family every year. A solution would create 33,000 jobs and 3 per cent. GDP growth over seven years in real terms. The benefits of success would result in not only an economically thriving Cyprus, but wider regional stability.

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