Istanbul’s secular mayor knocking on European doors for funding

Istanbul Mayor Ekrem Imamoglu speaks after being awarded with the German-Turkish Friendship Award 'Kybele 2019' in Berlin, on Nov. 8. (Reuters)
Updated 26 November 2019

Istanbul’s secular mayor knocking on European doors for funding

  • Imamoglu announced on Sunday that Turkey’s state-run banks are reluctant to lend routine loans to the municipality

ANKARA: The secret behind the latest wave of European visits made by Istanbul’s Mayor Ekrem Imamoglu has finally been revealed: To ask for international funding for the urban projects of the metropolitan municipality.

Imamoglu announced on Sunday that Turkey’s state-run banks are reluctant to lend routine loans to the municipality — even for paying salaries — and that this has led him to ask European countries for funding.

He added that the municipality is now working on a plan to sell Eurobonds to finance its projects in Istanbul, home to one-fifth of Turkey’s 82 million citizens.

“The state banks seem to have shut the doors on us,” he said. “I condemn the officials’ attitude.”

However, even if it is endorsed by the city council, he would likely need the approval from the Treasury and Finance Ministry — controlled by Turkish President Recep Tayyip Erdogan’s son-in-law Berat Albayrak — to issue Eurobonds worth $500 million.

During local elections in June, Imamoglu, of the secular main opposition Republican People’s Party, took the reins from Erdogan’s AKP which, along with its Islamist predecessors, has run the city for the last 25 years.

He also inherited a significant amount of debt and wasteful spending from the previous administration of the city, with a budget of 20 billion lira ($3.4 billion) and a debt of 26 billion lira, which obliged him to search for resources to pay it.

The municipality rounded up and parked hundreds of cars hired for official use by the previous administration to display the squandering of public money.

Karol Wasilewski, an analyst at the Warsaw-based Polish Institute of International Affairs, said that this is a politically risky strategy since Imamoglu may easily get hit by Erdogan who would criticize him using nationalist discourse.

Erdogan has always taken pride in ending Turkey’s dependence on the International Monetary Fund in 2013 after paying its last loan installment.

According to Wasilewski, the Turkish president could capitalize on the nationalistic feelings of the people by saying that Imamoglu would do exactly the opposite after the latter met with various global creditors and bankers in London.

“However, Imamoglu not only proved that he is a politician willing to accept the risk, but also made his bones as a person fighting the oppression of the government. If he succeeds in bringing further investments to Istanbul and in improving standards of living, his stance in Turkish politics will be even stronger,” he told Arab News.

Although Imamoglu, 49, has dismissed claims that he is interested in a presidential bid, his victories on the local front, his popular appeal and inclusive profile as a practicing Muslim elected from a secularist party have led many to think that he could challenge the president, who also once served as Istanbul mayor.

Imamoglu has paid working visits to Paris, Berlin and London in recent months.

Following these visits, Istanbul has secured €110 million ($121 million) of financing from Deutsche Bank for an underground transport project on the Asian side of the city. The construction will begin on Nov. 26.

Nezih Onur Kuru, a political analyst and a doctoral researcher on political psychology from Istanbul’s Koc University, thinks the debates on Imamoglu’s meetings with European investors is an indicator of the recent tension between the central and local governments.

“The government has targeted Imamoglu as a potential presidential candidate after his 9-point lead victory in the June 23 elections,” he told Arab News.

Kuru added that seeking investments strengthens Imamoglu’s image as a governor who defies the central government for public interest and consolidates his support base.

During Imamoglu’s European tour, the French Development Agency also signed an €86 million loan agreement with Istanbul for an underground metro line.

So far, the city has secured financing from Societe Generale, Black Sea Trade and Development Bank and the European Bank for Reconstruction and Development.


Iran nuclear deal parties meet as accord nears collapse

Updated 13 min 24 sec ago

Iran nuclear deal parties meet as accord nears collapse

  • Envoys from Britain, France, Germany, China, Russia and Iran will take part in the meeting
  • Iran insists that under the agreement it has the right to take measures in retaliation for the US’s withdrawal from the deal

VIENNA: The remaining signatories to the faltering 2015 Iran nuclear deal will meet in Vienna on Friday with the survival of the landmark agreement at stake after Tehran vowed to continue to breach the deal’s limits on its nuclear program.
Envoys from Britain, France, Germany, China, Russia and Iran will take part in the meeting, which is the first time the six parties will have gathered in this format since July.
Since May, Iran has taken a series of measures, including stepping up uranium enrichment, in breach of the 2015 deal, with another such move likely in early January.
Iran insists that under the agreement it has the right to take these measures in retaliation for the US’s withdrawal from the deal in 2018 and reimposition of crippling sanctions.
Since last month, European members have in turn begun raising the possibility of triggering the so-called “dispute resolution mechanism” foreseen in the accord, which could lead to the resumption of UN sanctions on Iran.
On the eve of what was already likely to be a strained meeting, Britain, France and Germany accused Iran of developing nuclear-capable ballistic missiles, in a letter to the UN on Thursday.
Iranian Foreign Minister Javad Zarif dismissed the allegation as “desperate falsehood.”
However, despite the mounting tension observers say Britain, France and Germany are unlikely to trigger the dispute resolution mechanism on Friday when their diplomats attend the joint commission meeting chaired by senior EU official Helga-Maria Schmid.
Analysts say if UN sanctions are re-imposed and the deal falls apart, Iran could also withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).
“It’s not clear whether that’s worth the benefit,” Ali Vaez from the International Crisis Group told AFP.
But he warned the risk of the deal collapsing was increasing as Iran was “running out of measures that are easy to reverse and non-controversial.”
“Both sides are locked into an escalatory cycle that is just very hard to imagine that they would step away from,” he said.
Francois Nicoullaud, former French ambassador to Iran, also says tensions were expected to continue to rise.
“Maybe it won’t be this time, but (the deal falling apart) will certainly be in the background of the discussions,” Nicoullaud told AFP.


Iranian parliament speaker Ali Larijani warned Sunday that if European partners triggered the dispute mechanism, Tehran may “seriously reconsider” its commitments to the UN nuclear watchdog, the International Atomic Energy Agency (IAEA), which monitors the deal’s implementation.
European efforts to shield Iran from the effects of US sanctions by creating a mechanism to carry on legitimate trade with the Islamic republic have borne little fruit, much to Tehran’s frustration.
The EU is growing increasingly concerned by Tehran rowing back from its commitments.
The dispute resolution mechanism in the deal has numerous stages, but it can eventually culminate in the UN Security Council voting on whether Iran should still have relief from sanctions lifted under the deal.
In such a scenario, says Vaez, “we will have a major non-proliferation crisis on our hands in the sense that the Russians and the Chinese have already declared they would not recognize the return of (sanctions).”
Vaez said in the end the path to a diplomatic solution would depend on Washington’s next moves and whether it would at least be willing to relax its attempts to prevent sales of Iranian oil, a vital source of income for the country.
“The remaining parties to the deal have proved incapable of providing Iran with any kind of breathing space,” Vaez said.
Iranian President Hassan Rouhani said Wednesday that Tehran is willing to return to the negotiating table if the United States first drops sanctions.