Oct 22 2019

EU bank stops new deals with Turkey over backslide in Turkish politics

The European Union’s European Investment Bank (EIB) has suspended all new deals with Turkey and declined every project so far this year, noting a breakdown in Turkish politics, Deutsche Welle Turkish reported on Tuesday, citing German newspaper Frankfurter Allgemeine Zeitung.

The EIB committees have not made a positive decision on any projects in 2019, signing off only on a previously approved loan of 67 million euros ($74.6 million) for a sewage project, DW Turkish said.

"Unless Turkish politics has changed, we are heading toward zero (projects)," one EIB official said.

The bank had been providing 1.5 billion euros ($1.7 billion) of loans on average for various projects, a decline from 2.2 billion euros ($2.4 billion) in 2016, but this year it is expected to provide less than 100 million euros ($111 million), according to DW Turkish.

Several EU countries decided to limit arms exports to Turkey over the offensive it launched in northern Syria targeting Kurdish forces this month. Some EU lawmakers have called for EU-wide economic sanctions against Turkey, saying that the Turkish offensive will lead to heavy civilian casualties and further destabilise the region.