off-the-wire

EU's EIB to break 4-year Turkey lending ban with earthquake aid

Kitco Media
By Reuters
Published:
Updated:
Reuters
By Marc Jones LONDON, March 20 (Reuters) - The European Union's lending arm, the European Investment Bank, is to provide 500 million euros ($540 mln) for Turkey's post-earthquake rebuilding efforts, suspending an almost-total ban on financing for Turkey. The EIB stopped virtually all lending in Turkey after a row over oil and gas drilling off Cyprus nearly four years ago. But the severity of last month's quake, which killed nearly 56,000 people in Turkey and neighbouring Syria, has prompted it to make an exception. "We are working together with the European Commission on a joint comprehensive package, of which up to 500 million euros is to be delivered by the EIB," the bank's vice president, Lilyana Pavlova, said in a statement. "We will shortly present it to our Board of Directors for approval." Speaking at an international donor conference, Commission President Ursula von der Leyen, said the overall package would add up to 1 billion euros ($1.1 bln).


While it is understood that all EU countries, including Cyprus, will give the green light for the EIB funding, formal approval might not come until June as the plans still need to be fleshed out and the timing is sensitive. Turkey is set to hold pivotal presidential and parliamentary elections on May 14 and EU members are wary of a resumption of EIB lending being seen as an indirect backing of incumbent president Tayyip Erdogan's re-election campaign. The EU has long accused Erdogan of human rights violations and the bloc's ties with Turkey are tense over Ankara's crackdown on dissent following a 2016 coup attempt as well as the oil and gas row in the Eastern Mediterranean.


More recently, Turkey has blocked a bid by Sweden - an EU member - to join NATO in the wake of Russia's war against Ukraine although it has just given Finland's membership its blessing. The EIB lent around 2 billion euros a year in Turkey between 2009 and 2016 before the concerns about Ankara's domestic crackdown first saw the bank scale back its lending in the country. ($1 = 0.9328 euros) (Reporting by Marc Jones; Editing by Andrea Ricci)

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