By Andrew Bounds in Brussels

The European Union has dropped diplomatic sanctions against Cuba, defying the US and ending the “cocktail wars” with the communist island.

The move is a victory for Spain, which overrode reservations from the Czech Republic and other former communist states in the EU where ex-dissidents are often in power. Madrid wants to encourage Raúl Castro, who has begun tentative reforms since taking over from his ailing brother Fidel.

The US, which maintains economic sanctions against the Caribbean island, condemned the action. “We certainly don’t see any kind of fundamental break with the Castro dictatorship that would give us reason to believe that now would be the time to lift sanctions,” said Tom Casey, State Department spokesman.

Louis Michel, EU commissioner for development, said it was a “positive step forward. The EU-Cuba relationship has been in a state of limbo for several years. This decision clears the way for a more open and frank dialogue on a range of issues including human rights, the environment, science and technology.”

Mr Michel said Cuba could become eligible for EU aid. “We can now look forward to improving and deepening co-operation on issues of common interest, such as climate change or external development assistance. It is essential that the EU be in a position to accompany Cuba in any future developments. This can only be to the benefit of all sides and most especially the people of Cuba,” he said.

The commissioner, who visited Cuba in March, welcomed recent social reforms including changes to property ownership rights, salaries, agriculture and access to mobile phones.

The downgrade of visits to Cuba by members of EU governments began in 2003 in response to a Cuban crackdown on dissidents.

Matters escalated after EU ambassadors invited the dissidents to cocktail receptions.

The measures were suspended, but not dropped, two years later after matters improved. Yet Havana continued to block visits by EU leaders, even as trade and other ties continued.