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Our View: Price differences across the divide causing new kinds of tensions  

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Taxi drivers at Ayios Dhometios crossing last week. Photo Christos Theodorides

Under pressure from oil companies and petrol stations about Greek Cypriots going to the north to fill up their cars with cheap petrol, deputies of the House commerce committee discussed the issue of unfair trade practices under the Green Line Regulation. The committee did not focus on petrol but looked at the broader issue of goods allegedly being smuggled from the north in what constituted unfair competition to businesses in the Republic and caused the state lose tax revenue.

Disy deputy, Kyriacos Hadjiyiannis, the committee chairman, said the situation was “out of control”, blamed customs officials for not carrying out proper checks at crossing points and said he would summon the customs authorities to provide explanations. Akel deputy Costas Costa said his party had conveyed complaints made by Greek Cypriot businesses about Turkish products, re-labelled as Turkish Cypriot and brought across under the Green Line Regulation. He spoke about trade in pesticides and petrol smuggled through in tankers.

It is a bit a difficult to believe that tankers cross north empty and return full of cheap petrol without being noticed by police or customs officers manning the checkpoints. A tanker is not a vehicle that can cross unnoticed. Perhaps Costa was indirectly highlighting the problem of private cars filling up in the north, but this was indicative of the committee’s attempt to pander to complaining businesses and pressure the government to take action. Hadjiyiannis said the government could have been turning a blind eye to what was going on because this was a sensitive issue.

The Green Line Regulation, which has been in force since 2004 at the behest of the European Commission, allows free trade of locally produced goods between the two sides, as well as a limited amount of alcohol and cigarettes. Turkish Cypriots regularly did their shopping in supermarkets in the south (perhaps less so as the Turkish lira lost its value), while Greek Cypriots did the same in the north. It was a way of establishing some form of interaction between the two sides and the trade worked on a limited scale, even though the Commission acknowledged there was smuggling.

As the Turkish lira collapsed and products in the north became much cheaper, more Greek Cypriots appear to have been taking their custom there, although there are no official figures. Petrol is about 40 per cent cheaper which is a substantial saving and it seems many Greek Cypriots are taking advantage, sparking complaints by the petrol companies. The matter is fast becoming a big issue and the government is in a quandary over what to do. It does not want to be seen to be preventing the Green Line Regulation from operating, but if it does not, it will come under more pressure from petrol companies and garage owners.

It is entirely possible that the regulation, which was put in place to encourage trade between the two sides could now become a reason for more tension.

 

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