Greek and Cypriot objections led to diplomatic talks in Brussels over the lifting of trade restrictions between the European Union and the breakaway state in northern Cyprus and EU aid to Turkish Cypriots reaching a deadlock yesterday. During the first discussion since the summer, Greek and Cypriot representatives were upset that both issues were being discussed together. The Dutch presidency of the EU had promised to discuss the issue of financial aid yesterday, with the trade matter being slated for a later date but presented both issues yesterday. The financial aid matter had been led by Cyprus in the past and Nicosia generally agrees with it, provided some alterations are made. However, Cyprus completely rejects the regulation on freeing up trade with the Turkish-occupied northern part of the island, which is a cause that has great support from EU Enlargement Commissioner Guenter Verheugen and London. The fundamental problem with the trade regulation is that it does not allow for even the slightest Cypriot involvement in trade exchanges between the EU and the Turkish-Cypriot side. It regards the occupied territories as a self-contained entity, although not an independent state, and its legal base is founded on Article 133 of the EU Treaty, which governs the EU’s relations with outside countries. Beyond the political message in using Article 133 as the legal basis for the regulation, Verheugen’s move satisfies a more immediate aim. Namely, avoiding a veto, as decisions concerning trade and economic relations with states outside the EU are taken based on majority voting. Apart from angering the Greeks and Cypriots, Verheugen’s move has provoked objections about its legality within the legal service of the Council of Ministers. As a result, the Cypriot government has made it clear it will take the case to the European Court and veto aid regulations, if need be. The matters will be discussed again next Thursday, with the Dutch presidency determined to bring the regulations to a vote at the meeting of foreign ministers on September 13.