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Cyprus - European Union: A Brief History


1. Introduction

The relations of Cyprus with the European Economic Community, and subsequently with the European Union, have evolved gradually from an Association Agreement in 1972 to a Customs Union Protocol in 1987, followed by the application for full membership in 1990, the positive Opinion of the EU Commission on Cyprus’ application in 1993, and the initiation of accession negotiations in March 1998. The evolution towards ever closer relations with the EU has proceeded steadily on the basis of the successful implementation of each stage, and it is remarkable that there have been few technical or commercial problems with the implementation of the agreements. One feature of all the agreements with the EU has been the mutual desire that they should be for the benefit of all the people of Cyprus, and despite the constraints there have been benefits in trade as well as in bicommunal projects such as the Nicosia sewerage scheme, Nicosia Master Plan, electricity and water projects which have been in the past funded from the financial protocols concluded within the EC-Cyprus association framework.

The very close relations with the EU, developed on the basis of the Association Agreement, and more particularly the completion of the first phase of the EC - Cyprus Customs Union on 1 January 1998.

A brief history of Cyprus relations with the EU is provided below.


2. The Association Agreement

Cyprus has been linked to the European Union since 1973 by an Association Agreement which provides for the establishment of a customs union in two stages. This agreement contains arrangements on trade and financial and technical cooperation which are to be applied for the benefit of the entire population of the island. The first stage provided for the phased reduction of tariffs on industrial goods and agricultural products. This stage was due to expire in June 1977 but was extended until the end of 1987, by which dead-line all the aims were achieved.

The Protocol governing the transition to the second stage of the Agreement, the completion of a customs union, also in two phases, entered into force on 1 January 1988. The first phase, from 1988 to 1997, provided for:

  • the reduction by Cyprus of customs duties and quantitative restrictions on industrial products (except for petroleum products and 15 categories of sensitive products) and on 43 agricultural products covered by the Agreement;
  • the adoption by Cyprus of the Union’s Common Customs Tariff and
  • the harmonization of accompanying policies on competition, State aids and the approximation of laws.

The second phase, ending in 2002 or 2003 (to be decided by the EC-Cyprus Association Council), should lead to the free and unrestricted movement of industrial and agricultural products and the adoption of the accompanying policies required for completion of the customs union. In view, however, of the beginning of accession negotiations in March 1998, for practical reasons the negotiations for the second phase of the customs union have been postponed.


3. Community Assistance

In an effort to strengthen the country’s infrastructure the European Union has provided financial assistance through the signing of four financial protocols with Cyprus of a technical and economic nature covering the period 1979-1998. Under the first three financial protocols Cyprus received a total of ECU 136 million comprising ECU 92m in loans from the European Investment Bank (EIB) carrying an interest rate subsidy and ECU 44m from the Union’s budget in the form of grants, loans and risk capital. The Fourth Financial Protocol totalling ECU 74m was signed in 1995 to cover the period 1995-98 and includes ECU 24m of grants from the Union’s budget and ECU 50m of loans from the European Investment Bank.

All grants and EIB loans under the first two protocols were used to finance infrastructure projects benefitting where possible the entire population of Cyprus, such as the sewage system in Nicosia and the pedestrianisation of Ledra and Onassagoras Streets and Kyrenia Avenue on both sides of the old part of the divided city of Nicosia, as well as the Southern Conveyor water supply and waste water treatment project and the construction of two power units at the Dhekelia power plant.

The Third Financial Protocol was used to promote the transition of Cyprus’ economy towards integration with the Union with emphasis on the development of small and medium-sized enterprises in industry, tourism and manufacturing, and towards the establishment of a European Institute on the island.

The aim of the Fourth Financial Protocol is to promote the development of the Cypriot economy and the objectives of the EC-Cyprus Association Agreement, to facilitate Cyprus’ economic transition with a view to its accession to the EU, to support participation of Cyprus in certain EU programmes and to support efforts to promote a general settlement of the Cyprus problem. Out of the total ECU 24m of grants, ECU 5m have been earmarked for projects destined to promote the development of the whole island (bicommunal projects or projects for the benefit of the Turkish Cypriot community which contribute to the unity of the island) and ECU 12m for initiatives aiming to promote a comprehensive settlement of the Cyprus question.

The Fourth Financial Protocol is in the process of being extended until 31 December 1999.

Furthermore, and outside the framework of the financial protocols, the European Investment Bank has decided to lend the Municipalities of Limassol-Amathus ECU 10m towards the extension of the sewage and drainage network of the city in a project to be completed by 1999.


4. Application and Opinion

On 4 July 1990 the application of the Republic of Cyprus for accession to the European Communities was presented to the Foreign Minister of Italy, the then President of the Council. The Council accepted the application and sent it for consideration by the Commission on 17 September 1990.

The Commission, in its Opinion on the application issued on 30 June 1993 and endorsed by the Council on 17 October of the same year, considered Cyprus eligible for membership and in expectation of progress on the political problem confirmed that the Community was ready to start the process with Cyprus that should lead to its eventual accession.

The concluding section of the Commission’s Opinion on Cyprus’ application to join the European Community stated the following:

«Cyprus’ geographical position, the deep-lying bonds which, for two thousand years, have located the island at the very fount of European culture and civilisation, the intensity of the European influence apparent in the values shared by the people of Cyprus and in the conduct of the cultural, political, economic and social life of its citizens, the wealth of its contacts of every kind with the Community, all these confer on Cyprus, beyond all doubt, its European identity and character and confirm its vocation to belong to the Community».

The European Councils at Corfu in June 1994 and Essen in December 1994 confirmed that the next round of the Union’s enlargement would involve Cyprus and Malta.


5. Council Agrees on Membership

The EU Council of Ministers, after examining the report of the European Union Observer for Cyprus on 6 March 1995, concluded that the negotiations would start on the basis of Commission proposals six months after the conclusion of the 1996 Inter- Governmental Conference (IGC), taking into account the results of the Conference. It considered also that Cyprus’ accession to the EU should bring increased security and prosperity to both communities on the island. In particular it should allow the northern part of the island to catch up economically and should improve the outlook for growth and employment particularly for the Turkish Cypriot community. The Council considered that the Turkish Cypriot community must perceive the advantages of EU accession more clearly and its concern at the prospect must be allayed. The Council called upon the Commission to organize, in consultation with the Government of Cyprus, the requisite contacts to this end with the Turkish Cypriot community.

The EC-Cyprus Association Council adopted on 12 June 1995 a common resolution on the establishment of a structured dialogue between the European Union and Cyprus and on certain elements of the strategy to prepare it for accession. The resolution included some specific points to be covered by the pre-accession strategy such as efforts to familiarize the Cypriot with the acquis communautaire and enable Cyprus to participate in various Community programmes such as the training programmes Leonardo and Socrates, the cultural programmes Ariane, Kaleidoscope and and Raphael, the audio visual industry programme Media II, the 4th Framework Programme for Research and Technological Development, the customs programme Matthaeus and the youth programme Youth for Europe III.

The Association Council agreed that Cyprus’ membership of the Union was intended to bring benefits to both communities on the island and contribute to peace and reconciliation.


6. Structured Dialogue

On 17 July 1995 the Union adopted the precise arrangements for the structured dialogue involving EU meetings of heads of state and government, ministers, political directors and experts as well as possible alignment with the Union’s declarations, and association with the Union’s demarches and the implementation of joint actions.

Since then many dozens of structured dialogue meetings have taken place both in Cyprus and in member states on Internal and Justice Affairs, the Internal Market, the Environment, Transport, Education and Culture, Research and Development, Economic and Fiscal Matters, Health and Social Affairs, and Political Affairs while the President of Cyprus has attended several European Council debriefings at the margins of the summits.

The structured dialogue meetings have served as a vital forum for close exchanges of views and an in depth examination of progress made by Cyprus with regard to the harmonization of its legislation, policies and practices for eventual accession. In the meantime the Union reaffirmed on several occasions (Cannes, Madrid and Florence summits) that accession negotiations should start six months after the conclusion of the IGC and the Council’s Presidency appointed an envoy to monitor developments on Cyprus and to follow the UN efforts for a political settlement.


7. Inter-Governmental Conference Ends

On 27 June 1997 the heads of government of the ten Eastern and Central European countries, Cyprus and Turkey were debriefed by Dutch Prime Minister Kok, Foreign Minister van Mierlo, Commission President Santer and Commissioner van den Broek on the results of the Amsterdam European Summit which had officially brought the IGC to a close. The Council and the Commission provided extensive details of the resulting Treaty outlining areas where significant improvements have been made and explaining the institutional agreements relating to enlargement.


8. Countdown Begins

Three weeks later, on 16 July, the Commission, in Agenda 2000, its communication to the European Parliament on the future development of the Union, re-assessed the situation since the publication of its Opinion on Cyprus in 1993 and confirmed that accession negotiations would indeed begin as planned.

Agenda 2000 reiterated the Union’s determination to play a positive role in bringing about a just and lasting settlement in accordance with the relevant UN resolutions. To this end the Council continued to renew the appointment of a Presidency envoy for Cyprus to monitor and report on developments in the efforts for a political settlement.

The Union could not, the Agenda went on, interfere in the institutional arrangements to be agreed between the parties. But it was available to advise on the compatibility of such arrangements with the acquis communautaire. It also felt that the prospect of accession could in itself provide such an incentive.

The timetable agreed for accession negotiations to start with Cyprus meant that they could start before a political settlement was reached. The Union shared the view expressed by the UN Secretary-General that the decision to open negotiations should be seen as a positive development which could promote the search for a political settlement. The Commission felt that the negotiations on accession would be facilitated if sufficient progress was made between the parties in 1997 to allow representatives of the Turkish Cypriot community to be involved in the accession process, and that agreement on a political settlement would permit a faster conclusion to the accession negotiations.

Agenda 2000 had in fact made it clear that if progress towards a settlement was not reached before the negotiations were due to begin, they should be opened with the Government of the Republic of Cyprus, as the only authority recognised by international law. The Commissioner urged the parties to exploit the window of opportunity that existed for a negotiated settlement before the start of accession negotiations and pledged continuation of the Commission’s bicommunal activities and projects aimed at informing the Turkish Cypriot community about the advantages of accession.


9. Commencement of Accession Negotiations

On the basis of the Commission proposals included in Agenda 2000, and taking into account the successful conclusion of the Inter-Governmental Conference, the European Council at Luxembourg (Dec. 1997) decided to initiate a comprehensive enlargement process with the ten applicant countries of Central and Eastern Europe (CEE) and Cyprus on 30 March 1998. The process provides for an enhanced pre-accession strategy and special pre-accession aid for the CEE applicants, and a special pre-accession strategy for Cyprus comprising :

  • Participation in certain targeted projects, in particular to boost judicial and administrative capacity,
  • Participation in certain Community programmes and agencies,
  • Use of technical assistance provided by TAIEX (Technical Assistance Information Exchange Office).

Moreover, the Luxembourg European Council adopted the proposal of the Commission to convene bilateral intergovernmental conferences in the spring of 1998 to begin accession negotiations with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia.

On 12 March 1998 President Clerides presented to the European Council Presidency a formal proposal inviting the Turkish Cypriots to appoint representatives as full members of the team negotiating the accession of Cyprus to the European Union. This proposal has not yet been taken up but remains on the table as an invitation for the Turkish Cypriot side to participate.

The Cyprus-EU accession negotiations were launched on 31March 1998.

In his opening remarks, the President of the Council of Ministers, British Foreign Minister Robin Cook welcomed the commencement of accession negotiations with Cyprus, and expressed the hope that these will make swift progress. The President of the Council of Ministers emphasized that

«The Union believes that Cyprus’ accession to the EU should benefit all communities, including the Turkish Cypriot community, and help to bring about civil peace and reconciliation on the island.»

He added that the European Union welcomes the offer

«made to include Turkish Cypriot representatives in the team for negotiating the terms of Cyprus’ accession to the EU. The European Union regrets that the Turkish Cypriot community has so far responded negatively to this offer. It reiterates the importance that it attaches to associating the Turkish Cypriots with the accession process, in accordance with the conclusions of the Luxembourg European Council. The Presidency and the Commission will pursue the necessry contacts.»

The first stage of the accession negotiations which was initiated on 3 April 1998 involves the analytical examination of the acquis communautaire, which has been separated into 31 chapters for easy reference. During this stage («acquis screening»), the European Commission presents and explains the acquis in a certain area; the applicant country presents its own policy in the area, and the two are compared, so that the necessary legislative or other changes needed to achieve harmonization are identified. The acquis screening is expected to be completed by the autumn of 1999. In the meantime, substantive negotiations on certain chapters of the acquis are expected to begin.

During its meeting in Cardiff (15-16 June 1998), the European Council noted that following the opening of accession negotiations on 31 March 1998 with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia, the screening exercises for seven chapters of the acquis had been completed. The Cardiff European Council also noted that «the Union’s priority is to maintain the enlargement process for the countries covered in the Luxembourg European Council conclusions, within which they can actively pursue their candidatures and make progress towards taking on the obligations of membership, including the Copenhagen criteria.»

The European Council, which met in Vienna (December 1998), reviewed the accession process and noted with satisfaction that «the six Accession Conferences with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia have entered into substantive negotiations and reached the first concrete results.»

Details on the Cyprus-EU accession process are available in the texts that follow.


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