YEREVAN (Yerkir)–In its upcoming progress report on Turkey, the European Union has urged Turkey to open its border with Armenia, stressing that this would be an important step forward toward establishing of neighborly relations between the two countries and would boost trade relations. According to the draft progress report obtained by The New Anatolian before the text is released by the EU Wednesday, while urging Turkey to open its border with Armenia, the EU cited the lack of significant developmen’s in relations between Turkey and Armenia’since the official exchange of letters between Turkish Prime Minister Recep Tayyip Erdogan and Armenian President Robert Kocharian in April 2005. However the EU noted a closer alignment of Turkey’s official position with EU positions in relation with the Southern Caucasus and Central Asia. "Turkey has reiterated its support for the European Neighborhood Policy. Turkey participates in the regional initiative GUAM (Georgia, Ukraine, Azerbaijan and Moldova) with observer status. Turkey also closely followed elections in Azerbaijan. It aligned itself with the EU Presidency statement on the elections in Azerbaijan on November 10, 2005." The European Union sought on Monday to defuse a looming crisis with Turkey over Cyprus and lagging reforms, welcoming a pledge to amend a key law on freedom of expression in line with EU standards. Prime Minister Tayyip Erdogan announced the policy shift on Sunday, three days before a European Commission report expected to sharply criticize Turkey, saying he was ready to change a law used to prosecute writers for "insulting Turkishness". "The stated intention by Prime Minister (Tayyip) Erdogan to bring Turkish legislation on freedom of expression into line with European standards is a welcome initiative," EU Enlargement Commissioner Olli Rehn said in a statement. "It shows that the Turkish prime minister is personally committed to free speech and EU accession," Rehn said. The EU executive is to issue a progress report on Wednesday criticizing a slowdown in reforms in the year since Turkey began EU membership talks and noting Ankara’s failure to meet a requirement to open its ports to shipping from Cyprus. Diplomats say the negative findings could prompt EU leaders to suspend, at least partially, accession negotiations with Turkey when they hold a summit on enlargement in mid-December. But German Foreign Minister Frank-Walter Steinmeier, whose country takes over the EU’s rotating presidency in January, warned against any premature move to break off the talks. "I would strongly urge that in our interests and in the interests of Turkey, we not be overly hasty in our conclusions. We ought to leave scope … for a political compromise between Turkish interests and the interests of the Cypriots," he told a conference of the Party of European Socialists in Berlin. That appeared to contradict Chancellor Angela Merkel, who said in an interview with Monday’s Sueddeutsche Zeitung daily that Turkey’s EU accession talks would be in serious trouble unless Ankara lifted trade restrictions against Cyprus. The Commission has repeatedly urged Turkey to amend article 301 of the penal code used to prosecute journalists and intellectuals such as Nobel literature prizewinner Orhan Pamuk over Armenian Genocide. Only last week, Erdogan appeared to rule out any change, with an eye on nationalist voters ahead of elections next year. But in a timely move to show goodwill, he said on Sunday: "We are ready for proposals to make the article 301 more concrete if there are problems stemming from it being vague."We are studying several options for how we can handle article 301 in harmony with the spirit of the (EU-oriented) reforms," he said, without elaborating. Rehn sounded a note of caution, saying Brussels wanted to see practical action. "We expect this stated intention to be followed by concrete deeds and we are thus waiting for concrete decisions," he said. Rehn said pressure for a change in the penal code also reflected the growing strength of Turkish civil society, which was a welcome development. The Commission is also expected to criticize shortcomings in the rights of religious and ethnic minorities, civilian control over the military and persistent instances of torture. It will praise economic reforms, the training of more judges and the creation of an ombudsman to probe citizens’ complaints. Mustafa Alper, general secretary of Turkey’s International Investors’ Association, said financial markets were quite relaxed about the possibility of a crisis with the EU. "I do not think the (Commission) report will greatly spoil Turkish morale … Cyprus will come to the agenda again, but I do not think the report will create a lot of problems or tensions," he told Reuters in an interview in Istanbul. "I see the likelihood of Turkey’s negotiations being suspended as rather remote," Alper said.