Cyprus to allow EU aid to Turkish Cypriots

The legal action was launched by the administration of hard-line peace-process rejectionist former president Tassos Papadopoulos. But the office of the new pro-unification president, communist Demetris Christofias, elected in February, found a legal solution to allow the tenders to take place.

According to the government's spokesperson, the compromise version of the text of the invitations for EU tenders now formally clarifies that the north is not a third country separate from the Cyprus Republic.

The disputed aid package involves only €10 million out of €259 million earmarked by the EU for Turkish Cypriots, but it could prove essential for the implementation of other projects financed from Europe's coffers.

The EU wanted to improve economic ties and deliver financial support to Turkish Cypriots in the wake of the failed referendum on the island's re-unification just ahead of Cyprus joining the bloc in 2004.

The UN-sponsored peace plan was supported by the north of the island but rejected by Greek Cypriots, although the result had no influence on their winning membership in the EU. Subsequently, Nicosia blocked several attempts by Brussels to continue with its aid pledges to the Turkish Cypriots.

But analysts say the prospects for reconciliation have somewhat improved with the new leader, who also chose a former European commissioner, Markos Kyprianou, as the country's foreign minister in charge of reunification initiatives.

Turkey's link to Cypriot dispute

A favorable gesture by Nicosia towards Turkish Cypriots - if it is applied as a general principle to other EU projects in the north and also when being decided at EU level - could also produce an important shift in Europe's relations with Turkey.

It was primarily due to the union's failure to keep its promise on aid to Turkish Cypriots and on lifting the economic embargo on the northern republic that Ankara chose not to open its ports and air space to Greek Cypriots ships and planes.

As the decision meant that Turkey is not fulfilling one of the conditions under which it was allowed to begin EU entry talks, the 27-member bloc decided in December 2006 to freeze negotiations in eight out of 35 areas covered by EU law.

Turkey is the only country which recognises the Turkish Cypriot territory as an independent state.

Cyprus has been divided since 1974, when Turkish troops moved in its northern area, following a short-term military coup supported by Athens that tried to unite the island with Greece.