Is Cyprus Sacrificing Its Low-Tax Status In Vain?

by Lorys Charalambous, Tax-news.com, Cyprus

17 September 2001

The UN Secretary-General's Special Adviser in Cyprus Alvaro de Soto met US State Department Special Co-ordinator Thomas Weston in Paris last week after Turkish Cypriot leader Rauf Denktash refused the UN's invitation to a new round of talks on a possible settlement for the divided island.

Following the meeting Weston reiterated Washington's " unwavering support" for UN efforts to find a negotiated settlement in Cyprus, telling the Cyprus News Agency that the country's European Union accession process offered "an incentive towards achieving this objective". He also said that through its engagement with the EU, Turkey could and should contribute towards a Cyprus settlement.

Asked whether De Soto had suggested any specific moves on the part of the US in support of UN efforts, Weston said: "Future moves are not to be put in the public domain."

President Glafcos Clerides had accepted the UN invitation, but Rauf Denktash said the ground had not been prepared for the resumption of talks. Turkey said it agreed with Denktash, saying it was baffled by the UN's 'inexplicable haste' in issuing the invitation for a specific date knowing it would be turned down.

A senior civil servant at the Turkish Foreign Ministry said Denktash's refusal 'should not be taken as a rejection but as a well-thought effort out to get the parties to think a bit harder to ensure a chance of success'.

Weston said: " We believe that Turkey, through its political dialogue with the EU and the national programme it has put forward, can and should contribute towards a comprehensive settlement of the Cyprus question."

In recent weeks the EU's assumption that the imminent admission of Cyprus to the EU would push the Turks to the negotiating table and to a settlement has started to look a lot less safe. Greece has promised to veto the whole enlargement programme if the EU excludes Cyprus from accession, while Turkey is threatening unofficially to annex the northern part of the island if admission goes ahead, and might even blockade the island altogether. Against its NATO partners?

At first, it seemed that individual EU nations would go along with the admission of Greek Cyprus even if the overall problem could not be resolved. Now, some countries are wavering. The Dutch parliament has resolved not to admit a divided Cyprus, while the French seem to quite like the idea that enlargement could be blocked by the Greek veto, since they can't imagine any deal on the CAP and regional policy which will be acceptable to them.

One way or another, it's not looking good for Cyprus, which is dutifully sacrificing its offshore sector to the Gods of Brussels in the expectation of admission into the club, but may now find itself excluded for a generation.

.

Recommended

Write a comment