The European Commission issued its first Progress Report on every one of the six candidate countries in November 1998, on the progress achieved towards accession to the EU, on the basis of the decisions taken by the European Council in Luxembourg and Cardiff.

In its conclusions on Cyprus the Commission confirmed that Cyprus has made significant progress with respect to the adoption of the «acquis communautaire» and it is not expected that it will face serious problems in implementation of the chapters that had been submitted to the screening procedure at that time.

The Commission underlines, however, that Cyprus shall have to intensify its harmonization efforts in sectors such as the internal market, especially with respect to financial and credit services and international business activities, telecommunications and the environment.

With respect to political issues, the Commission stated that the Turkish Cypriot community has not yet responded to the invitation by the Government of Cyprus to include its representatives in the accession negotiations, with the result that the analytical examination of the acquis communautaire has not covered the whole territory of Cyprus.

The Committee emphasizes, however, that the process of integrating the northern part of Cyprus, especially if this is done in association with Cyprus’s accession to the EU, will not cause serious economic difficulties.