Cypriot ports deal looks more and more elusive

Behind the scenes, the Finnish presidency of the EU is still working with determination, if not great optimism, to see if a deal can be done on the Cyprus issue.

The Greek Cypriots have blocked a draft EU direct trade regulation to allow northern Cyprus to trade directly with other EU member states, since mid-2004, (shortly after the whole island joined the EU but with the acquis suspended in the north) saying it is tantamount to recognition of the north. But first the Luxembourg presidency in 2005 and now the Finns have tried to find a way to allow direct trade out of the northern Cypriot port of Famagusta.

Famagusta port does in fact already operate but, since an European Court of Justice ruling in 1994, without preferential EU tariff treatment and mostly via Turkey. Flights from the northern Cypriot airport of Ercan also have to go via Turkey.

The Finns have imposed a media blackout on the talks about ports but different sources within the EU and on the island suggest that the aim is to get a smaller package than Luxembourg tried.

It is believed that the Finns have proposed that Famagusta port could be run under EU authority (and without an intermediate joint Greek Cypriot-Turkish Cypriot management committee as suggested in earlier packages). In response to Turkish Cypriot complaints that an EU management committee would include Greek Cypriots and Greeks running a Turkish Cypriot port, a counter-proposal that the UN could run the port is now believed to be being floated.

More difficult still is the inclusion in the deal of the derelict fenced-off former tourist town of Varosha that lies just behind Famagusta port, from where 45,000 Greek Cypriots were expelled when the Turkish army invaded in 1974. Today the Turkish Cypriot side see Varosha as an important part of their bargaining power in negotiations for a final comprehensive settlement, though it is suggested that Turkish Cypriot leader Mehmet Ali Talat had proposed giving Varosha back in 2005 in return for Ercan airport as well as Famagusta port being opened - an offer apparently rejected by the Greek Cypriot side.

Turkish press sources suggest the Finns are proposing an intermediate solution on Varosha whereby it is put under UN control and Greek Cypriot owners are allowed to have their decayed property repaired. This raises many questions about access to the property and about the details of such a UN role.

As the final part of their efforts, the Finns are also believed to be suggesting to Turkey that in return for a deal on Famagusta (but without opening of Ercan airport) they would open only a small number of Turkish ports to Greek Cypriot shipping, with a commitment at a future point to open the rest.

Behind the scenes, the Finnish presidency of the EU is still working with determination, if not great optimism, to see if a deal can be done on the Cyprus issue.