Cyprus has praised the German Chancellor’s decision to tell Turkey to respect all agreements, in particular the Ankara Protocol that calls on Turkish authorities to allow all Cyprus vessels to enter its ports and airports.
Transport Minister Erato Kozakou-Markoulli, a former Foreign Minister and long-time diplomat, said that Angela Merkel was obviously looking after the interest of all Europe when she made the bold statement of “all agreements must be respected” during a two-day official visit to Turkey.
“Our EU partners have realised that it is in everyone’s interest for Turkey to open up its ports to Cyprus-flag ships,” Kozakou Markouli said on the sidelines of a press briefing on a new shipping tax scheme that has been approved by the European Commission.
Chancellor Merkel said on Monday that in order to achieve progress in its EU accession talks, Turkey should open its ports to ships and planes from Cyprus and help press Iran to stop its controversial nuclear programme.
Merkel said that Turkey's EU accession talks are "open-ended," but didn't repeat her long-standing suggestion to give Turkey a "privileged partnership" that falls short of full EU membership.
Germany is committed to reached agreements and "we are continuing the membership talks," she remarked before reporters at a joint press conference with Prime Minister Recep Tayyip Erdogan.
The two leaders also disagreed about Cyprus, with the German chancellor calling for the issue of Turkey's refusal to recognise the government on the divided island to be resolved quickly.
Merkel however stressed the immediate task for Ankara was to open its ports to vessels from Cyprus, under a customs union accord with the Union.
"The most important issue is the implementation of the protocol… We have to deal with the Cyprus issue. That would be to the benefit of us all," she said.
Turkey's refusal to grant trade privileges to Cyprus has led Brussels to freeze talks in eight of the 35 chapters that candidates must successfully negotiate prior to membership.
Priot to her official trip to Turkey, Merkel had told Turkish reporters in Germany that she wanted to see Turkey acting on the Cyprus issue by opening its ports to Greek Cypriot ships, as required by the Ankara Protocol. A source close to the Chancellor said later that there was disappointment in Berlin that the Talat-Christofias talks had not provided any results yet.
TAX CHANGES
Kozakou-Markouli said Cyprus will broaden the scope of its shipping taxation system this year to boost an industry that accounts for 5% of its economy.
Cyprus has the third largest shipping fleet in the European Union, with more than 1,000 ocean faring vessels representing more than 20 mln gross tonnes.
Cyprus already has a simplified tonnage tax system for some shipping which charges tax on the net tonnage of vessels. But it is proposing to broaden access to that system to include all areas of the shipping industry, placing it at the middle of the range of taxation charged by other EU members.
"With the exception of the owners of Cyprus ships… eligible owners of foreign ships, charterers and ship managers shall have an option to decide whether they should be subject to tonnage tax or not," the Communications and Works Minister said.
Other activities eligible for tonnage tax will include towage and dredging activities and cable laying, she said.
The scheme was approved by the European Commission on March 24, and will be valid until December 2019 with the option for a further 10 year renewal.
A new bill is expected to be put to the House of Parliament for a vote over the next few weeks.
Representatives from the Cyprus Shipping Chamber, as well as the Cyprus Union of Shipowners said that although the taxation system is being ‘fine tuned’ it will bear no loss to direct state revenues from shipping, that amount to EUR 10 mln in fees and charges for the Department of Merchant Shipping and a further 10 mln for Company House, in addition to any corporate taxation.
