EU to Cut the Flow of Funds to Turkey as Drilling Spat Heats Up

The European Union is poised to freeze most high-level contacts with Turkey and cut the flow of funds to the country, while holding back for now on sanctions that could target Turkish companies involved in offshore drilling in the eastern Mediterranean.

EU diplomats have agreed on the wording of a draft decision due to be formally adopted by the bloc’s foreign ministers on Monday, two officials familiar with the talks said. The draft calls for suspending negotiations on an aviation agreement with Ankara, halting scheduled ministerial meetings, reducing aid and inviting the European Investment Bank to review sovereign-backed lending to Turkey.

The bloc will also reiterate that it’s working on targeted sanctions in light of Turkey’s continuing controversial drilling practices, according to the final draft of the communique seen by Bloomberg. The statement was agreed on Friday afternoon after several rounds of redrafting, and it will be rubber-stamped by EU ambassadors on Monday before ministers sign off later in the day.......

Despite renewed tensions in the Mediterranean, the EU is wary of an escalation that would risk a landmark 2016 migration agreement, under which Turkey stemmed the bulk of refugee flows to Europe in exchange for financial assistance. Even though options for targeted sanctions were mandated by the bloc’s leaders last month, they are not being activated at this stage.

An EU diplomat said the bloc in its Monday decision will seek a balance between sending a clear message to Ankara and agreeing on measures that won’t harm the interests of EU nations or cut all ties with Turkey. The EU wants to keep some lines of communication open in areas such as migration and terrorism, the diplomat said, asking not to be named discussing sensitive issues.

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