# EU’s EIB to override Turkey lending ban with earthquake aid
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: EU's EIB to Provide €500M for Turkey's
Meta Description: European Investment Bank overrides ban on financing in Turkey after tragic earthquake, allocating 500 million euros for reconstruction. Stay tuned for updates.
URL: https://financedigest.com/eus-eib-to-override-turkey-lending-ban-with-earthquake-aidhtml

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By Marc Jones

LONDON (Reuters) -The European Union’s lending arm, the European Investment Bank, is to temporarily override its near 4-year long ban on financing in Turkey to provide 500 million euros ($540 million) for the country’s post-earthquake rebuilding efforts.

The EIB stopped virtually all lending in Turkey after a row over oil and gas drilling off Cyprus in 2019, but the severity of last month’s earthquake, 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](https://www.financedigest.com/germanys-merck-to-invest-300-million-euros-in-us-gas-plant.html "Germany’s Merck to invest 300 million euros in US gas plant") 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.”](https://www.financedigest.com/board-of-russias-avtovaz-approves-585-million-in-2023-investment-programme-ria-agency.html "Board of Russia’s AvtoVAZ approves 5 million in 2023 investment programme – RIA agency")

Speaking at an international donor conference, Commission President Ursula von der Leyen, said the overall package by the Commision and EIB would add up to 1 [billion euros](https://www.financedigest.com/telecoms-group-orange-signs-sustainability-linked-refinancing-of-6-billion-euros-syndicated-credit-facility.html "Telecoms group Orange signs sustainability-linked refinancing of 6 billion euros syndicated credit facility") ($1.1 billion).

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](https://www.financedigest.com/uk-mortgage-approvals-hit-lowest-since-june-2020.html "UK mortgage approvals hit lowest since June 2020") as the plans still need to be fleshed out and the timing is sensitive.

It goes without [saying that it is our absolute priority](https://www.financedigest.com/malaysias-new-pm-anwar-says-first-priority-is-cost-of-living.html "Malaysia’s new PM Anwar says first priority is cost of living") to make sure the financing goes to those who need it most in the context of the reconstruction efforts,” the EIB’s Pavlova said.

It does not include [budget support](https://www.financedigest.com/energy-bill-support-pushes-uk-budget-deficit-to-february-record.html "Energy bill support pushes UK budget deficit to February record") for the national government to support investments outside the scope of the recovery.

Turkey is set to hold pivotal presidential and parliamentary elections on May 14 and EU members are wary of the 500 [million euros](https://www.financedigest.com/hellofresh-sees-2023-core-profit-of-460-540-million-euros.html "HelloFresh sees 2023 core profit of 460-540 million euros"), while not a long-term resumption of EIB lending, being seen as some kind of 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](https://www.financedigest.com/oil-gas-downhole-cables-market-to-witness-widespread-expansion-during-2019-2027.html "Oil & Gas Downhole Cables Market to Witness Widespread Expansion During 2019-2027") 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](https://www.financedigest.com/finland-will-join-nato-on-tuesday-stoltenberg.html "Finland will join NATO on Tuesday – Stoltenberg") 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](https://www.financedigest.com/mifid-ii-why-you-should-not-scale-back-your-implementation-efforts.html "MIFID II: WHY YOU SHOULD NOT SCALE BACK YOUR IMPLEMENTATION EFFORTS") its lending in the country.

($1 = 0.9328 euros)

(Reporting by Marc Jones; Editing by Andrea Ricci and Alison Williams)


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