EU throws north Cyprus a lifeline

After 30 years of economic isolation, Turkish-Cypriots came in from the cold yesterday when European Union diplomats forced the Greek-controlled south to allow their goods to be traded across the island's fortified Green Line.

After 30 years of economic isolation, Turkish-Cypriots came in from the cold yesterday when European Union diplomats forced the Greek-controlled south to allow their goods to be traded across the island's fortified Green Line.

The deal accepted yesterday throws a lifeline to the northern Cypriots, whose economy has stagnated during a lengthy de facto economic embargo. Diplomats predicted that the move would lead to the opening up of northern Cypriot ports and its airports, which cannot accept direct international flights.

Until now the Greek-Cypriots have refused to accept goods from northern Cyprus, which is not internationally recognised, and whose authorities are not considered legitimate.

But the Greek side has been under huge pressure to relax restrictions since it voted last weekend against a United Nations plan to reunite the island. The northern Cypriots backed the plan but, because it required agreement on both sides, it will not come into force. That means only the Greek-Cypriot half of the island will be admitted to the EU on Saturday.

Yesterday's deal, reached by EU ambassadors in Brussels, means that trade will begin with products that originate in northern Cyprus, such as agricultural produce. Goods made from foreign raw materials will be included after two months.

Diplomats hope this will begin to alleviate the disastrous economic situation that has provoked large-scale emigration. More Turkish-Cypriots are thought to be living in London than on the island itself.

The EU regulation agreed is designed to map out the relationship between the two halves of Cyprus after the Greek part joins the EU. It commits the Greek-Cypriots to keeping the Green Line open to all those with correct documentation. The deal should also give a fillip to tourism in the north by giving EU citizens the right to cross the line in both directions. Previously those who arrived in Turkish-controlled Cyprus were not allowed into the south.

The EU will also bring forward further measures to develop the economy of northern Cyprus, including redirecting €259m (£173m) which was originally earmarked to help back up a political settlement.

The accord was seen as a reward for the Turkish Cypriots who defied the will of their leader, Rauf Denktash, who opposes reunification.

The Greek-Cypriot Prime Minister, Tassos Papadopoulos, who campaigned against the UN plan, has been strongly criticised by the United States and the EU since the "no" vote.

A British official said: "We are delighted with this practical step to end the economic isolation of northern Cypriots. This will allow Turkish-Cypriot companies to trade on equal terms with the rest of the union. But there is still more to come."

The island was divided in 1974 when Turkish troops invaded following an attempted coup on the Greek side.

In last Saturday's referendum, 65 per cent of Turkish-Cypriots backed the plan, while the deal was rejected in the south. That is in contrast to previous negotiations when Turkish-Cypriots were seen as the obstacle to a solution.

During yesterday's talks in Brussels, there was strong pressure from EU countries, including Britain and Denmark, to extract further concessions from the Greek-Cypriots, including the end of the international flight ban for the north.

However, there is little prospect of the EU pushing for the full recognition of the Turkish Republic of Northern Cyprus because it wants the island united as one country.