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STATEMENT OF FOREIGN MINISTER KASOULIDES
2002-06-13 22:28:16

STATEMENT BY THE MINISTER OF FOREIGN AFFAIRS MR. IOANNIS KASOULIDES AT THE 9TH MEETING OF THE INTERGOVERNMENTAL CONFERENCE FOR THE ACCESSION OF CYPRUS TO THE EUROPEAN UNION LUXEMBOURG-10/6/2002 I would like to thank you for the warm welcome to my delegation and express our appreciation and satisfaction for the progress achieved under the Spanish Presidency, with the assistance of the member states and the European Commission, in our accession negotiations during the first six months of 2002.

We have reached an advanced stage in the process towards accession to the European Union and we do expect the forthcoming European Council in Seville to give a decisive impetus towards that aim.

The remaining period for the conclusion of the accession negotiations, hopefully by next December, is indeed a crucial one. Being fully aware of that, we have enhanced our efforts for the timely completion of the legislative harmonization process whereas at the same time particular emphasis and attention is placed on further improving our administrative capacity, by setting up new institutions and mechanisms, strengthening existing ones and training our personnel, so as to be able to effectively enforce and monitor the implementation of the acquis.

I would also like to assure you that President Clerides and the Cyprus Government will continue, in good faith, their genuine efforts for a comprehensive settlement of the Cyprus problem. A solution before accession that will enable a reunited Cyprus, as a member state, to speak with one voice and implement the acquis communautaire, does remain the priority of the Cyprus Government.

We cannot but be satisfied with the outcome of today?s meeting. Four more chapters of the acquis have been provisionally closed and progress is registered as far as the remaining two open chapters are concerned, bringing us much nearer to the conclusion of the accession negotiations.

Allow me the following brief remarks on the chapters on our agenda:

Chapter 7: Agriculture (Veterinary and Phytosanitary Legislation)
In the Veterinary and Phytosanitary fields, transposition of the acquis is proceeding according to schedule and progress has been made in the establishment of the necessary institutional set-up and implementation capacity. Cyprus has submitted all requested additional information to the Conference and remains hopeful that it will soon be possible to achieve the closure of this part of the chapter.

Chapter 6: Competition Policy
We, particularly, welcome the provisional closure, today, of this chapter that is one of the cornerstones of the internal market and express appreciation to the Union for having accepted our request for a transitional period, until 31/12/2005, for international business enterprises active on 31/12/2001. This transitional period will, indeed, limit any negative impact on the alignment with the competition acquis and will facilitate the smooth integration of Cyprus into the Union.

I would like to inform you that Cyprus accepts the considerations contained in the EU Common Position and confirms its commitments to take the corresponding necessary measures. At the same time I would like to confirm that the taxation reform will be adopted according to the timetable, already submitted to the European Commission.

Chapter 10: Taxation
I am pleased that we can confirm today the closure of this chapter and we are satisfied that the Union has accepted certain of our requests for transitional periods, including maintaining the VAT zero rate for pharmaceuticals and foodstuffs for human consumption and a reduced VAT rate on restaurant services until 31/12/2007, given the importance of tourism for the Cyprus economy.

As I have mentioned, within June the House of Representatives will enact a new tax code for Cyprus, eliminating all measures considered harmful under the Code of Conduct for Business Taxation, aligning the direct tax legislation with all relevant EU Directives and, in line with our commitments, increase the standard VAT rate from 10% to 13% as from 1st July 2002.

Chapter 21: Regional Policy and Coordination of Structural Instruments
I am also pleased to confirm today the closure of this chapter, which is extremely important for the economic and social cohesion of the Union. Cyprus has submitted to the Conference all requested information regarding the design of the implementation system for the structural funds in Cyprus and is taking all necessary steps regarding the required administrative structures.

Furthermore, on the basis of the Union?s position regarding Cyprus? s eligibility for Objectives 2 and 3 and the Cohesion Fund we have started preparing the programming documents required for the implementation of the structural funds.

Chapter 29: Financial and Budgetary Provisions
Detailed discussions on the flow of funds and possible derogations will have to be carried out in the months to come. We believe that it is justified to request corrective measures similar to those granted at previous enlargements or to member states.

In the meantime we are taking all necessary measures for the implementation of the Community legislation on budgetary and financial issues and for setting up the necessary coordination system. Information was provided to the Commission regarding the steps being taken to enhance the existing system and the set up of the mechanisms for the calculation, collection, payment and control of own resources.

Chapter 30: Institutions
We thank the Spanish Presidency for putting on the table the chapter on Institutions and for provisionally closing it with Cyprus. We consider the institutional solution achieved at Nice and reflected in the Common Position of the Union as a balanced package and agree with the number of seats and votes allocated to Cyprus in the various EU institutions, fully understanding, at the same time, that the definition of certain transitional periods will only be possible at the end of the accession negotiations.
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