ECONOMICS > Turkey’s political woes worry European lender

ISTANBUL- Hürriyet Daily News

The European Investment Bank, which supports private and public projects in the country, is satisfied with recent performance of the Turkish economy, However, it raises questions over problems with Syria and Iraq

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The European Investment Bank’s Turkey chief Teirraillon says small business from the country’s southeast has shown a large interest in a 500 million euro loan package.

The European Investment Bank’s Turkey chief Teirraillon says small business from the country’s southeast has shown a large interest in a 500 million euro loan package.

Although the Turkish economy is in good shape, sustainability is doubtful in the following six months mainly because of political problems such as those with Syria and Iraq, according to the Turkey chief of the European Investment Bank.

“The unemployment figures are positive,” Alain Terraillon told Anatolia news agency in an interview published yesterday. “The economy keeps on attracting investment. The figures are very good when compared with Europe, but I am not sure if they are sustainable for the following six months because there are political issues such as Syria and Iraq,” he said.

Ties between the once allied Turkey and Syria have been strained since Turkey openly rebuked the regime of President Bashar al-Assad. Relations between Turkey and Iraq are also tense following the end of last year when Iraq attempted to arrest Tariq al-Hashimi, one of its Sunni vice presidents who was given refuge by Ankara. Ties were tested again when Turkey went against Baghdad’s wishes with directly buying fuel from the Kurdistan Regional Government in northern Iraq.

Boshporus tunnel
Turkey’ foreign direct investment (FDI) in the first half of the year reached $8.2 billion according to the Economy Ministry.

The Eurasia Tunnel, a project that combines the hihgways on the two sides of Istanbul with an underwater tunnel beneath the Bosphorus, is among the projects in Turkey funded by the European Investment Bank.

After this project, the bank will focus on the health sector, Terraillon said. “By 2013, the European Investment Bank will provide funding in research and development and innovation investments by Turkish companies.”

The Bank, active in Turkey for around 40 years, increased its loan budget for the country from a mere 300,000 million euros in 2005 to 2 billion euros, he also said.

It launched a program titled “Credit Eases for Growing Anatolia,” which foresees to grant 500 million euros in loans to small and medium sized businesses in Anatolia.

Some 250 million euros of the sum have been delivered via Vakıfbank, Halk Bank, Denizbank, Akbank and Yapı Kredi Bank, Terraillon said.

Requirements for loans
The demand in these loans was high mainly from industrialized cities such as Gaziantep, Urfa, Mardin, Samsun and Malatya” he said, adding that sectors varied.

Some 75 percent of the 500 million euros have already been withdrawn and the bank aimed at finalizing the project as of October. Then it will head into new projects, the office chief said.

The nominees for the bank’s SME loan should have less than 25 employees and a budget less than 5 million euros.


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Turk Uzan

8/24/2012 1:32:03 AM

@ Mark, you obviously have ZERO Idea on how the economy works. Foreign investors invest here because it's lucrative not because you work hard, they make money with the money they spend. And it's not money you worked hard for it's the money of the investor. Foreign investment is vital for "every country" not just for Turkey. Without a stable/growing economy you can forget about investors in the first place Also most investors are NOT from Europe, your ignorance just shows ..

Aydin Amsterdam

8/23/2012 10:34:48 PM

@mark, i am sure you are one of those "hard working" europeans... which country? greece?? cyprus??

Mark Mark

8/23/2012 11:23:58 AM

@Red Tail - it has been said time and time again on this website that the Turkish economy is only booming off the back of EU funds and investment. News airports, roads, rail, tunnels, metro lines etc are all courtesy of us hard working Europeans, to which all Turks should be grateful but alas you take the money, run with it and insult us. Can we have our money back please? We should be rip up the customs union just to teach you all a lesson.

Red Tail

8/23/2012 10:09:26 AM

Why is the European Investment Bank financing all these projects? Why do not Turkish firms want to put the money in? About the foreign situation, it just confirms my view that Mr Davatoglu and Mr Bagis have created a lot of damage for Turkey. Mr Gul and Mr Babacan did a terrific job and then Turkey was taken seriously. But after a couple of years with Mr D and Bagis, and their hostile and strange behaviour our repuation has gone down and EU hardly wants to speak to us. There is only silence.,,
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