Turkish Funding of TRNC is Not Unconditional

Prime Minister Ersin Tatar, Foreign Minister Kudret Ozersay and Finance Minister Olgun Amcaoglu have agreed with Turkish officials to sign an interim protocol to cover the point left off in 2019. It has also been reported that this interim protocol contains a number of conditions and tasks which fall on the UBP-HP coalition government.

According to some evaluations, it was stated that it is a serious mistake to assume to that Turkey will transfer financial resources unquestioningly and in order for the 1.2 billion TL resource to be released, as is expected in the six month protocol, the TRNC government has a big share of responsibility in this.

According to Turkish Cypriot daily Kibris Postasi:

The first and most important article of the interim protocol is a commitment to sign a three-year financial protocol covering 2020, 2021 and 2022. In order for the content of the three-year protocol to be detailed, it is expected that the technical committees will work in October 2019 when the 2020 fiscal yearly budget law will be sent to the parliament and then they will address the vital changes, which are expected to be in the three-year protocol, in an interim protocol.

One of the conditions of the interim protocol, which is expected to be valid until the end of 2019, is that the ‘public finance management and control law’ will come into force by the end of this year. Another condition of the interim protocol is that the tourism incentive legislation, which came into force in 2017, will be amended. The officials, who said that beneficial results have been achieved with the tourism incentive legislation, stated that the TRNC and Turkish authorities have agreed that this legislation should be updated according to the changing conditions.

Another condition of the interim protocol is for concrete steps to be taken in relation to local government reform. Among the information obtained by Kibris Postasi is that an important expectation is that concrete steps will be taken and will enter into a legal process of enacting the municipal reforms in the event that a six-month period will not be sufficient in terms of being a comprehensive law.

While it was expected that the interim protocol will be extremely short and consist of two to three pages, it was stated that after this protocol, it was possible to start transferring two types of resources categorised as loans and grants. Finally, it was stated that approximately 695 million TL are expected in the category of grants for defence expenditures and infrastructure investments, as well as a resource of 575 million TL may be possibly be released with the interim protocol in the loans category, to fund compensations granted by the Immovable Property Commission, the support for the real sector and interest repayments.”

Kibris Postasi

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