Fierce battle ahead over aid to Turkey

Date: 16/03/2000

By Simon Taylor

ENLARGEMENT chief Günter Verheugen faces an uphill battle to convince other Commissioners and member states to support his plans to grant Turkey financial aid worth several billion euro in cheap loans and direct grants.

Verheugen has promised Ankara that he will do his best to persuade colleagues and EU governments to endorse the package, which is designed to help Turkey prepare for Union membership. But he has warned that this will not be easy given the competing demands on the EU's already tight budget.

Turkish Premier Bülent Ecevit has already criticised the Union for delaying a decision on the aid. Speaking after Verheugen's visit to Ankara last week, Ecevit said the Union had "not kept its promises on financial assistance to Turkey" and insisted that the aid "should not be delayed any further".

The promise of financial help was a key part of the decision taken by EU leaders in Helsinki last December to treat Ankara as a full candidate for Union membership and grant it all the benefits offered to the other 12 countries bidding to join the EU.

Turkey's Ambassador to the EU Nihat Akyol said this week that the Commission would assess the situation at a technical committee meeting with officials from Ankara before the two sides decide their next move. "If there is not enough common ground between the Commission and Turkey, we will go to the member states," he added.

Akyol insisted that if the Union was facing problems raising the extra money, there was a case for revising the Agenda 2000 budget package agreed last year in Berlin, pointing out that changes had already been made to help Malta and Cyprus.

The ambassador claims Ankara could be entitled to €1.4 billion in loans from the European Investment Bank (EIB) over the next seven years, access to the EIB's €17-billion loan fund for helping candidate countries prepare for membership and a range of smaller schemes operated by the bank to fund infrastructure projects and provide risk capital for private-sector firms.

This would be on top of the €600 million in credit Turkey is due to receive to fund reconstruction projects in the wake of last August's earthquake.

Ankara is also expecting to receive around €177 million in direct grants from the EU, €127 million of which will come from the EU's MEDA fund for Mediterranean countries and a further 50 million from the Union's European Strategy for Turkey launched in 1998.

But Ankara and the Commission have locked horns over Turkey's insistence that it is entitled to €750 million in loans intended to help deal with the economic impact of its customs union with the EU which have been blocked by Greece. According to Turkish officials, the Commission is insisting that there is no legal basis for reactivating past loans which were not actually made.

Enlargement chief Günter Verheugen faces an uphill battle to convince other Commissioners and Member States to support his plans to grant Turkey financial aid worth several billion euro in cheap loans and direct grants.