The European Investment Bank (EIB), known as the financial arm of the European Union (EU) that funds joint projects, is preparing to resume its activities in Turkey after halting them in 2019. An EIB spokesperson stated, “The EIB has been invited by the EU Council and the European Commission to reassess its relations with Turkey.”
The spokesperson highlighted that a process has been initiated for a possible re-engagement with Turkey, as suggested in EU Council decisions. This approach is described as “gradual, proportional, and reversible.”
In line with EU policies, the spokesperson emphasized that the EIB’s new operations would focus on critical areas benefiting both Turkey and the EU, particularly climate action, green transformation, post-earthquake recovery, and migration-related support.
The spokesperson noted that “EIB Global has provided over 30 billion euros in financing in Turkey since it began operations there in 1965.” The last operation was a 400-million-euro loan agreement to renew water and wastewater infrastructure in provinces affected by the February 6, 2023 earthquakes.
Activities in Turkey Had Been Suspended
The Luxembourg-based EIB, the EU’s financial institution, had suspended its operations in Turkey in 2019.
EU countries made this decision, along with various measures impacting bilateral relations, during a period of tensions related to Turkey’s oil and gas exploration activities in the Eastern Mediterranean.
These measures included halting accession negotiations, suspending work on updating the Customs Union, stopping high-level dialogue mechanisms, reducing pre-accession assistance (IPA) funds, freezing EIB loans, and pausing comprehensive aviation negotiations.
Although recent diplomatic developments have created optimism for the future of EU-Turkey relations, the negative effects of the 2019 decisions remain.
As part of these decisions, the EIB suspended a significant portion of new loans planned for Turkey in 2019. Before this, the bank had provided Turkey with an average of 1-2 billion euros annually for various projects. For instance, in 2016, the EIB allocated over 2.1 billion euros to projects in Turkey.
In 2019, however, the bank approved just 117 million euros in loans for previously authorized projects and subsequently excluded Turkey from its lending policy.
This situation shifted in 2023 due to improving EU-Turkey relations and the devastating earthquakes that struck Turkey on February 6. The EIB signed a 400-million-euro loan agreement to support post-earthquake reconstruction projects. Since starting operations in Turkey in 1965, the EIB has provided funding for 263 projects, amounting to 30.86 billion euros.
EU-Turkey Economic Relations Strengthening
On December 17, European Commission President Ursula von der Leyen met with Turkish President Recep Tayyip Erdogan in Ankara. The main agenda of the meeting was developments in Syria, but during the subsequent press conference, the EU delivered positive messages regarding economic cooperation.
Von der Leyen described EU-Turkey relations as “rich and complex,” noting that steps have been taken to move forward.
“Economic ties are stronger than ever,” von der Leyen said, pointing out that bilateral trade reached a record 206 billion euros last year.
She emphasized that the EU remains Turkey’s largest trade and investment partner and aims to further strengthen these ties.
Recalling the launch of high-level dialogue on trade in June, von der Leyen added, “We will now initiate a high-level dialogue on the economy.”
Von der Leyen also noted that the EIB is “exploring opportunities” to resume its operations in Turkey and expressed eagerness to continue talks on updating the Customs Union.
Source: Bloomberght/ Prepared by: İlayda Gök