Speech by Mr Olli Rehn
Member of the European Commission, responsible for Enlargement

"Cyprus: one year after accession"

Cyprus International Conference Center
Nicosia, 13 May 2005

Ladies and Gentlemen,

I am glad to be here in Cyprus today, just one year after you joined the European Union. The accession of Cyprus has been a success story. You have new economic opportunities and you enjoy the security benefit of EU membership.

Let me begin with what the EU is all about, which stems from 55 years ago and is still relevant today - not least here in the Eastern Mediterranean.

On 9 May 1950, Robert Schuman, then Foreign Affairs Minister of France, stunned Europe and the world in a speech where, in the name of his government, he reached his hand out to Germany. Inspired by his main advisor, Jean Monnet, he proposed to place the Franco-German production of coal and steel under a common organisation open to the participation of other countries of Europe. "The coming together of the nations of Europe", he said, "requires the elimination of the age-old opposition of France and Germany".

Remember that 1950 was only five year s after the end of the Second World War. The people of Europe were still deeply feeling the pain of occupation, bombardments, death, terror, fear and anger. To say the least, such an initiative required vision and courage in the face of widespread prejudices. It also required wisdom and realism: "Europe will not be made all at once, or according to a single plan" Schuman said; "it will be built through concrete achievements which first create a de facto solidarity".

The choice of coal and steel was thus not the result of chance, of course, as they were at the time the basis of industrial development as well as the indispensable materials for war efforts. Schuman added: "The solidarity in production [of steel and coal] will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible".

The Schuman declaration was thus much more than just another proposal for improving international cooperation. It was the lesson drawn from centuries of conflicts, divisions and hatred. It was the acknowledgement of the fact that, in such a confined and populated area as this European continent, with so many different ancient nations and cultures, and against such a historical background, there was only one option left : peace - but not just any peace : peace through unification.

Robert Schuman's invitation was enthusiastically taken up by the German Chancellor Konrad Adenauer and by the leaders of four other countries, Belgium, Italy, Luxembourg and the Netherlands. It is worth noting that "founding fathers" of Europe like Robert Schuman of France, Konrad Adenauer of Germany or Alcide de Gasperi of Italy were all men who were born and had grown up in border regions, where they experienced the painful consequences of fanaticism and nationalism on the frontline of two world wars.

Less than a year after Robert Schuman had made his famous speech, the Treaty establishing the European Coal and Steel Community was signed, laying the ground for the European integration process, which keeps Europe united today.

Ladies and gentlemen,

55 years after this turning point in European history, there is no doubt that our common project has been an overwhelming success. I certainly don't want to paint only a rosy picture and ignore the current difficulties of Europe, some of them quite serious. But once we put the facts into the right perspective, nobody can deny that never before has Europe experienced such a long period of peace, democracy and prosperity.

It is not by chance that this enterprise has attracted more and more countries. It soon became a reference point, a symbol for modernity and openness, liberty and solidarity. Joining Europe became a goal for all those countries which were victims of dictatorship, for those which were kept out of the European Union against their will by the Cold War and the division of Europe. As soon as they cast off their chains, their prime pursuit was to join our family of democratic nations. The EU was also a strong catalyst for change and reforms, often demanding and even painful. But the end result is certainly worth the effort.

You have just successfully completed your first year of EU membership. Your sound economic record was justly rewarded by the decision of the EU to let Cyprus join the 2 ^nd phase of the Exchange Rate Mechanism, which paves the way for a successful entry to the Euro-zone in a few years. I look forward to the national plan to implement the Lisbon strategy of growth and jobs. I equally expect an early ratification of the new constitution for Europe.

However, it is regrettable that Cyprus entered the EU as a divided country. Of course, there is no doubt that trade across the Green Line, the routine crossing of thousands of Cypriots every day and the possible opening of new crossing points are positive signals. The Cypriots have also proven that the two communities can live peacefully together.

But these developments can not replace a comprehensive settlement of the Cyprus problem. I am aware of the pain that the present situation causes. There are still minefields, barbed wire and blue helmets across your island. The northern part of the island suffers from a brain drain and economic isolation.

Ladies and Gentlemen, in today's European Union, such a status quo jars. After three decades of separation and one year of EU membership, it is now high time for reconciliation and vision, for courage and far-sightedness on both sides, to help Cyprus become a Member State like all the others - that is: united and in peace.

The current situation offers real opportunities to launch a fresh momentum. First, Cyprus has become an EU member state - an achievement that ensures that neither inter-communal violence nor military intervention should occur again. Second, the European Council decided to open accession negotiations with Turkey. And third , the Turkish Cypriot community, as shown by the latest elections, seeks the reunification of the island and its integration into the EU.

Peace process

One year ago, the plan presented by Kofi Annan, the Secretary General of the UN did not win the approval of the citizens of the Greek Cypriot community. Such an outcome was a disappointment for those who thought that a comprehensive solution was within reach. But in a democracy, the vote of the people must be accepted and their concerns taken into account. We must now turn to the future and draw the lessons from this setback.

However, it would be a mistake to throw away years of patient work. The Annan plan may be amended and improved, but still it constitutes the framework for a settlement as it addresses all the core issues such as property, territory, security, and the institutions of a united island.

Ladies and Gentlemen,

The peace process needs to be resumed - and the sooner the better. Therefore, the positions of the parties and their wishes for changes to the Anan plan should be made clear. I fear that time is cementing the status quo - and is thus working against the Cypriots - all Cypriots.

Every day without a solution deepens the division - de facto and in people's minds. The recent tensions and worries about properties underline the urgency to resume talks. I believe a new process would at least contain such tensions, pending a final settlement.

The Commission has repeatedly expressed its will to support all serious and well-intended efforts for such a comprehensive settlement. We are willing to play a proactive role in future talks. I have recently appointed Ambassador Jaakko Blomberg as my special adviser on Cyprus. However, any negotiations will take place under UN auspices, given its competence and expertise in key issues such as security, property, governance and territory. And it must be clear that the main responsibility for any success of negotiations lies with the two communities on the island.

I renew my call to both communities to find a way to engage in a dialogue with each other. A solution is first and foremost in your interest, and you are the best placed to address the remaining issues. Without a dialogue on the island, it makes little sense to complain about each other to representatives of the European Union !

Package for the Turkish Cypriots

In April 2004, the Council, where the EU Member States meet and decide, invited the Commission to " bring forward comprehensive proposals to put an end to the isolation of the Turkish Cypriot community". The Commission proposed a comprehensive package of aid and trade measures on 7 July 2004. The aid regulation establishes an instrument of financial support for the economic development of the Turkish Cypriot community with a view to the reunification of the island; €259 m has been earmarked for this purpose. The trade regulation aims at offering special conditions for trade between the northern part of Cyprus and the EU.

Discussions in the Council have not led to an agreement on the two proposals. I'd like to emphasise that the only motivation of our proposal is to improve the economy in the north, to offer opportunities to the Turkish Cypriot Community - and thus to bring it closer to its Greek Cypriot compatriots and to the EU.

Ladies and Gentlemen,

Here again, time is working against the interest of all Cypriots. Every day without a solution reinforces the doubts of those in the north who believe that the EU is not really interested in helping the Turkish Cypriot Community. Suspicion and frustration are the best allies of division.

Therefore, to end the stalemate, we are ready to consider a compromise allowing the adoption of the two proposals. I hope all parties concerned will show the same spirit of compromise.

Green Line Regulation

The Green Line Regulation has been a great success in the crossing of persons. As I mentioned earlier, thousands of Cypriots cross the line daily. There is free movement of EU citizens.

However, the value of goods traded across the line under the Regulation remains limited (around € 100,000 per month). There are still obstacles to intra-island trade, e.g. trucks and buses cannot circulate freely across the island. There is no telecom interconnection. And trust needs to be built among the businessmen on both sides. Equally cooperation on Justice and Home affairs is needed

Finally, I hope progress will be made soon to open two further crossing points at Zodia and at Ledra Street. The EU has done its part. We have financed the de-mining of minefields inside the buffer zone.

Turkey

Finally, a few words about Turkey. There is no doubt that Turkey will play a key role in finding a solution to the Cyprus problem. I am certain that Turkey's European prospects will help pave the way for a comprehensive settlement. In fact, if you compare today's Turkey with the Turkey of, say, five years ago, the situation has changed : while the then Turkish government was mainly interested in maintaining the status quo in Cyprus, Turkey today accepts the prospect of a negotiated settlement leading to the reunification of the island. This alone is not sufficient to solve the problem, but this development is positive.

Moreover, Turkey has agreed on the additional protocol adapting the Ankara agreement, and I expect it will be signed soon after we complete our internal procedures. I am looking forward to Turkey progressing in the normalisation of its relations with the Republic of Cyprus. In this context, we expect Turkey to lift its restrictions on Cypriot vessels , in line with the requirements of the EU-Turkey Customs Union.

Closing remarks

Cyprus's accession to the European Union has been part of a unique historical process. Our wish has been to enable a united Cyprus to be part of the enlargement process from the very beginning. Therefore, no efforts should be spared to reach a comprehensive settlement of the Cyprus problem.

The current status quo does not correspond to European norms. One year after accession I encourage you all to show willingness to compromise. Take the example of Robert Schuman and do the impossible - reach for the other's hand. Only then we shall be able to create a new united Cyprus

Thank you for your attention.