The European Union’s European Union lender, the European Investment Bank, will provide 500 million euros ($540 million) to support post-earthquake reconstruction efforts in Turkey, ending its near-total ban on providing financial aid to Turkey.
The European Investment Bank halted almost all lending to Turkey after a row over oil and gas exploration off Cyprus nearly four years ago.
But the severity of last month’s earthquake, which killed nearly 56,000 people in Turkey and neighboring Syria, prompted the bank to make an exception.
“We are working with the European Commission on a comprehensive joint package under which the EIB will provide up to 500 million euros. We will soon submit it to our Board of Directors for approval,” EIB Vice-President Liliana Pavlova said in a statement.
European Commission President Ursula von der Leyen told an international donors’ conference that the total package could reach around 1 billion euros ($1.1 billion).
The formal approval of the funding is due in June, given the need for all EU countries, including Cyprus, to agree to it, as well as the need to clarify funding plans and the sensitivity of its timing.
Turkey will hold crucial presidential and parliamentary elections on May 14, and members of the European Union fear that the European Investment Bank’s resumption of its loans to Turkey will be seen as indirect support for incumbent President Recep Tayyip Erdogan’s re-election campaign.
Erdogan has always been accused by the European Union of human rights abuses, and the EU’s relations with Turkey have been strained by Ankara’s crackdown on dissent in the aftermath of the 2016 coup attempt as well as the dispute over oil and gas in the eastern Mediterranean.
The European Investment Bank lent Turkey about two billion euros a year between 2009 and 2016, before concerns about the crackdown in Ankara curtailed lending in the country.