Page 8 - MEOG Week 30
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MEOG FinanCe & investment MEOG
EIB freezes new lending linked to Turkish govt. amid Cyprus drilling row
east med
tHE European Investment Bank (EIB) will not enter into any new lending in turkey linked to the country’s government until at least the end of the year. e move has been triggered by the European Union’s decision to introduce initial sanctions to deter turkey from carrying on with “illegal” drilling for gas o Cyprus in the eastern Mediterranean.
e EIB, which said the time period would be spent conducting a strategy review, is turkey’s biggest single lender.
It has pumped between €0.4bn and €2.2bn into the country in the past three years, although nothing has been invested so far in 2019.
“As the EU Bank, the EIB will follow the [European] Council’s recommendations and, notably, will take a restrictive approach toward the submission of new lending operations to its Board for approval for the rest of the year,” an EIB spokeswoman told Reuters on July 24.
e block placed on lending is not expected to impact private sector projects in turkey, with the bank possibly moving to sign around €350mn worth of deals before the end of the year if EU nance ministers on the EIB board approve the related loans, according to the news agency.
“A [completed] review of the bank’s strategic orientations of its lending activities in turkey is scheduled for later this year,” the spokeswoman reportedly added.
As well as making the EIB move, EU for- eign ministers have suspended negotiations on a Comprehensive Air transport Agreement with turkey. ey have also said they will curb
high-level diplomatic contacts with Ankara for the time being, while they have proposed cutting pre-EU accession assistance to turkey.
An EU diplomat told Reuters in mid-July that under sanctions Ankara could lose some 150mn of 400 mn euros that the bloc had earmarked for 2020 for everything from political reforms to agriculture projects to help turkey prepare for eventual EU membership.
e EU had been due to give turkey €4.45bn between 2014 and 2020, but it cut and suspended some funding last year.
It has frozen membership talks and nego- tiations on upgrading its customs union with turkey, accusing Erdogan of grave violations of human rights among other things.
turkey has said that any EU funding cuts will have no a ect on its drilling o Cyprus and responded to the sanctions announcement by sending a fourth vessel to the drilling zone.
Ankara and Nicosia have overlapping claims to regional waters o Cyprus linked to the split of the island between Greek and turkish Cypri- ots. e Greek Cypriot government and EU says turkey is conducting exploration for oil and gas in territory that falls under EU member state Cyprus’ exclusive economic zone.
e turks dispute the mapping of the zone and say they are determined that the turkish Cypriots, who since 1974 have run a breakaway territory in the north of the island which is only recognised by turkey, should receive their fair share of proceeds from any successful drilling for hydrocarbons in the surrounding waters.
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w w w . N E W S B A S E . c o m Week 30 30•July•2019
