(EU Politix)–The European Union (EU) has approved a controversial aid package of 139 million Euro for the internationally unrecognized Turkish Cypriot state in northern Cyprus.
Aid is aimed at improving the infrastructure of the poor area–in a deal that was approved by EU foreign ministers Monday.
"We warmly welcome the adoption of the regulation establishing an instrument of financial support for the Turkish Cypriot community," the Greek Cypriot mission to the EU said in a statement.
But the Turkish government has said it is disappointed with the adoption of aid as it hoped for a wider agreement that would lead to trade between the north and south of the divided island.
Ankara believes the aid package is weak because it concentrates on the improvement of infrastructure and not economic development.
Cyprus–which has been split into Greek and Turkish areas since 1974–is a volatile issue in Turkey’s bid for EU membership.
"This unilateral decision by the EU will bring new problems and difficulties," said Turkey’s foreign minister–Abdullah Gul.
"The genuine step Turkey expects is direct trade together with financial aid."
The EU Austrian presidency welcomed the adoption of an aid package as a concrete step towards improving the economy of the area.
"This financial support regulation will bring clear–tangible benefits for the population in their daily lives," said Austrian foreign minister–Ursula Plassnik.
"We have thereby also honored our commitment as the EU to the Turkish Cypriot community."
"This could also be a positive contribution to getting the ongoing UN-sponsored process moving again."
"It is in all of our interest to find a comprehensive solution to the Cyprus conflict that is acceptable to both sides."
In 2004 the European commission proposed giving 259 million Euros to make it easier for northern Cyprus to send its exports to the EU after Turkish Cypriots approved a UN peace plan.
The money was aimed at agricultural projects and helping small and medium-sized businesses but until now–payment was never agreed to by EU member states.
The commission reiterated that it remains committed to supporting the UN-led talks for the Cyprus issue as soon as possible.