EU-Turk talks in balance as crunch week begins

BRUSSELS, Dec 11 (Reuters) EU foreign ministers will seek to agree today how to penalise Turkey for failing to normalise trade with Cyprus at the start of a week that could set the fate of Ankara's troubled entry talks with the bloc.

EU capitals are split between those who would shed no tears if talks with the large, mainly Muslim nation collapsed for good, and others who argue Europe has no choice but to draw in a strategic partner able to bridge the Western and Islamic worlds.

If the bloc's top diplomats cannot hammer out a compromise widely seen involving a slow-down -- but not a total freeze -- of entry talks, it will be down to European Union leaders at a summit in Brussels scheduled for Thursday and Friday.

''Our central aim is a ... common European position which will include a clear and unwavering message on the future of Turkey's negotiations with the EU,'' Greek Foreign Minister Dora Bakoyanni said ahead of yesterday's talks.

Cyprus has been split since Turkish troops invaded in 1974 after a brief Greek Cypriot coup backed by Greece. The EU admitted the divided island as a member in 2004, represented only by the Greek Cypriot government.

The European Commission has recommended a partial suspension of accession talks because Turkey has not met a treaty obligation to open its ports and airports to traffic from Cyprus, one of the 10 new members which joined the EU in 2004.

It has proposed suspending 8 of 35 negotiating areas, or chapters, a sanction which would slow down 14-month-old talks due in any case to last over a decade while not killing them.

BALKANS ON THE MENU Cyprus, Greece and Austria said last week that was not enough and called for a new deadline for Ankara to end the ports stand-off, while Britain, Italy, Sweden and other supporters of Turkey said the EU executive's proposal was too harsh.

''We must not make a mistake here because if we push Turkey away, in the end it will lead to a much poorer, weaker and less secure EU,'' British Foreign Secretary Margaret Beckett wrote in the Turkish daily Sabah.

Turkey has said it would open its ports only if the EU made good on pledges to ease the economic isolation of Turkish Cypriot northern Cyprus, which Nicosia has so far prevented. Ankara made an oral offer last week to open a major port to traffic from Cyprus in a step towards meeting its obligation and said it would do more if the EU allowed direct trade with the Turkish Cypriots. But EU President Finland said that was not enough and Cyprus rejected the offer.

Finland circulated new draft proposals at the weekend that left open how many chapters would be frozen and said the EU would scrutinise Ankara's compliance without setting a deadline.

The Balkans will also feature at the talks in Brussels on Monday with accession hopeful Croatia seen making progress in its talks with the bloc, and EU ministers expected to debate relations with Serbia.

NATO's policy U-turn last month to offer Belgrade partner status despite its failure to catch 1992-95 war crime indictee Ratko Mladic has cast the spotlight on the EU's insistence that Serbia cannot expect closer ties with it unless it cooperates fully with the U.N.

war crimes tribunal in the Hague.

REUTERS PDS PM0549