At the April 2004 General Affairs and External Relations Council EU foreign Ministers expressed their commitment to ending the isolation of the Turkish Cypriots and facilitating the reunification of Cyprus through economic development. At the council's request, the Commission produced two draft regulations to deliver on this commitment: one enabling preferential direct trade between the north and EU member states on a tariff quota system and the other disbursing €259 million of aid.
The aid regulation was agreed in February 2006, and projects funded from this package have already begun. This package represents one of the highest levels of EU aid per capita. The money will be used to fund practical projects, developed in partnership with the Turkish Cypriot community. These will improve the quality of life of ordinary Turkish Cypriots and bring them closer to the EU.
On trade, successive expansions of the Green Line regulation have allowed the export of an increasing variety and volume of Turkish Cypriot goods across the Green Line. However, despite efforts by a number of EU presidencies, there has to date been no agreement on the direct trade regulation. The German presidency, together with the Commission, continues to take this forward. We will continue to support efforts to liberalise trade between northern Cyprus and the EU.
In practice, however, the isolation of the Turkish Cypriot community can only be fully lifted through a comprehensive settlement of the Cyprus problem. As it did during the negotiations on the Annan plan, the EU continues to support the efforts of the UN to broker such a settlement.