Following the setback in plans for accession of a united Cyprus, the EU has acted rapidly to give new impetus to integration moves. And, in recognition of the "yes" vote by the Turkish Cypriot community in its referendum on the UN Peace plan, much of the EU focus has been on improving conditions for north of the island, even though the acquis will be suspended there until a settlement is reached.

A new regulation adopted by the EU Council of Ministers on April 29 will ease crossing of the line between the two parts of the divided island – the green line "between areas in which the Government of the Republic of Cyprus exercises effective control and the areas in which it does not. Because the EU acquis does not apply, pending a settlement, across the whole of the island, and this line does not constitute an external border of the EU, special rules concerning the crossing of goods, services and persons are needed. EU citizens must be able to exercise their rights of free movement within the EU, ministers agreed. And goods produced or finished north of the green line may be introduced into the south of the island free of customs duties.

The provisions are in part intended to "send a signal of encouragement to the Turkish Cypriot community that its future rests in a united Cyprus within the European Union." EU foreign affairs ministers had already on 26 April expressed "strong regret that the accession to the EU of a united Cyprus will not now be possible on 1 May", and also stated their "determination to ensure that the people of Cyprus will soon achieve their shared destiny as citizens of a united Cyprus in the European Union." They also recommended that the €259 million already earmarked for the northern part of Cyprus in the event of a settlement should be used anyway.

"We at the European Parliament greatly regret the decision taken through this referendum", said Elmar Brok (EPP-ED, D) when the European Parliament foreign affairs committee discussed the Cyprus referendum outcome in Brussels last week.

And European Enlargement Commissioner Günter Verheugen said that "if the Greek Cypriot government had publicly supported it, the 'Yes' vote would have won." He regretted that it had not been possible for him to take part in the information campaign for the population of Cyprus. "The main reason for the failure is the lack of trust and fear among the Greek Cypriots", he said. Now, it was the Union's duty to "continue doing everything for reunification of the island, to maintain cohesion between the two communities and not to punish the Turkish Cypriots".

Mehmet Ali Talat, leader of the Turkish Republican Party, voiced "deep sorrow" at the results of the referendum, while underlining the high percentage of "Yes" votes on the Turkish side. "The Turkish Cypriots are ready for political, judicial and economic harmonisation in line with the acquis communautaire", he said. "I appeal for the economic, social and political embargo to be lifted by 1 May. But lifting the embargo must not be seen as a substitute for a solution" he added.

But Greek Cypriot MP Nicos Cleanthous, the co-chairman of the EU-Cyprus joint parliamentary committee, saw the Greek Cypriots as "the first victims", and questioned Turkey's right of military intervention. George Vassiliou, Cyprus' chief negotiator during the accession talks, added that "the biggest problem for the Greek Cypriots is still security".

Commissioner Verheugen also pointed out that in 1997, when the accession negotiations started, the Commission had invited the Turkish Cypriots to take part in the negotiations. "They rejected our proposal", he explained. But then, as now, "cooperation with the Turkish community does not entail diplomatic recognition".