EU slashes Turkey’s pre-accession funds by $124m

German Chancellor Angela Merkel has led calls for a cut in funds to Turkey. (AP)
Updated 19 November 2017
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EU slashes Turkey’s pre-accession funds by $124m

ANKARA: After several calls from German Chancellor Angela Merkel for a cut to the EU’s pre-accession assistance to Turkey, the bloc announced on Saturday a significant decrease in its funds for Turkey under the EU’s 2018 budget deal.

The reason cited is the bloc’s doubts over Turkey’s deteriorating situation in terms of democracy, rule of law and human rights, core criteria for EU membership.
Although it still needs to be formally approved by the EU Council and the European Parliament, the decision is considered a new blow to Turkey’s accession process, which has been frozen for years.
The reduction is about €105 million ($124 million), along with an agreement to freeze an extra €70 million of previously announced spending.
Romanian MEP Siegfried Muresan, the lead rapporteur for the EU’s 2018 budget, said the decision intends to send a clear message that the money the bloc provides “can’t come without strings attached.”
Out of €4.45 billion committed by the EU for Turkey during the period 2014-2020, only €360 million have been distributed so far.
“Talking about cutting pre-accession assistance decreases the EU’s credibility,” Turkey’s EU Affairs Minister Omer Celik said last month.
He added that pausing or cutting negotiations with Turkey would be “suicide” for the bloc.
Turkey applied for membership in 1987 and became eligible in 1997, thereby getting the green light for starting accession talks in 2005.
The refugee deal between Turkey and the EU in March 2016, aimed at managing irregular migration to Europe via the Aegean Sea, created a temporary honeymoon in relations, but accession talks are currently deadlocked.
Some measures Ankara took under the state of emergency following last year’s failed coup attempt are considered undemocratic by the EU.
“This decision (to cut funds) is hardly surprising,” Ozgur Unluhisarcikli, Ankara office director of the German Marshall Fund of the US, told Arab News.
“Taking action against Turkey’s democratic setback was being discussed in EU circles for a long time, and targeted cutting of Instrument for Precession Funds was the likely first move,” he said.
“Germany had also been pushing for such a decision since announcing it would take measures against Turkey,” Unluhisarcikli added.
“The symbolic significance of this decision is very important, as this is the first step backward in Turkey’s integration process to the EU since accession negotiations were launched in 2005.”
Unluhisarcikli said Turkey is entering a slippery slope in its relations with the EU and the US.
“Turkey’s accession is a long-term project already heavily invested in by both Turkey and the EU,” he added.
“Both parties should refrain from taking steps that would endanger the project... Turkey shouldn’t be pushed into a path that leads away from the West.”
Gul Gunver Turan, president of the Turkey-EU Association in Istanbul, said something has to be done without totally severing relations with Turkey.
“And the only tool left was cutting down allocated funds, which anyway were only used by a small amount,” Turan told Arab News.


IMF’s Lagarde sees case for central bank digital currency

Updated 24 min ago
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IMF’s Lagarde sees case for central bank digital currency

  • ‘The key is to harness the benefits while managing the risks’
  • There ‘may be a role for the state to supply money to the digital economy’

SINGAPORE: With growing innovation in the financial sector and a move toward a cash-less society, there is a role for central banks to enter the world of digital currencies, IMF chief Christine Lagarde said Wednesday.
Unlike private currencies like bitcoin and ethereum, money created by central banks would be regulated and trustworthy, and could reach all sectors of society, Lagarde said in a speech prepared for the Singapore Fintech Festival.
“The key is to harness the benefits while managing the risks,” Lagarde said. “Proper regulation of these entities will remain a pillar of trust.”
However, while central banks in several countries are considering e-money, questions remain about whether it makes sense for every country.
There “may be a role for the state to supply money to the digital economy,” and she noted that Canada, China, Sweden and Uruguay were “seriously considering” issuing digital currency.
An official e-money would have the advantage of fulfilling policy goals including financial inclusion, security and consumer protection.
“My message is that while the case for digital currency is not universal, we should investigate it further, seriously, carefully and creatively,” she said.
The IMF issued a report on Wednesday examining the issues central banks would face if they decided to issue electronic money.