Top Stories
Top Stories
Wires

UPDATE 1-EU signals sanctions on Turkey over Cyprus drilling - draft

Gabriela Baczynska

(Adds detail, quotes)

BRUSSELS, July 11 (Reuters) - The European Union will put on hold high-level talks with Ankara and negotiations on an air transport agreement, as well as freezing funding for Turkey next year, over "illegal" drilling for gas and oil off Cyprus, according to a draft statement seen by Reuters.

The joint EU decision, which may still be changed, is to be discussed among national envoys in Brussels on Thursday with the aim of adopting it when the bloc's foreign ministers meet on Monday.

"In light of Turkey's continued and new illegal drilling activities, the (EU) decides to suspend negotiations on the Comprehensive Air Transport Agreement and agrees not to hold further meetings of the high-level dialogues for the time being," the draft said.

"The Council endorses the (European) Commission's proposal to reduce the pre-accession assistance to Turkey for 2020 and invites the European Investment Bank to review its lending activities in Turkey, notably with regard to sovereign-backed lending," it said.

It added that the EU would be ready to introduce more restrictive measures against Turkey should Ankara continue drilling.

An EU diplomat involved in the discussions told Reuters: "It would only be targeting people linked to these specific illegal activities. We're trying to calibrate that carefully because we need Turkish cooperation on migration, NATO, countering terrorism."

"Some member states rely on Turkey for energy transit so we must tread carefully. Don't expect any wide economic sanctions."

Ankara on Wednesday rejected Greek and EU criticism that Turkish drilling off Cyprus was illegitimate. On the divided island, an internationally recognised government is part of the EU but Turkey backs a breakaway area.

While Nicosia was pushing for tougher language on sanctions, some other EU states were wary of shutting down all high-level channels of communication with Ankara, diplomats said.

The EU depends on Turkey to keep a lid on migration from the Middle East to Europe, and for security matters, but the relationship has turned sour over President Tayyip Erdogan's sweeping crackdown on critics following a failed coup in 2016.

The EU has frozen Turkey's long-stalled membership talks as well as negotiations on upgrading their customs union, accusing Erdogan of widespread violations of human rights. (Reporting by Gabriela Baczynska Editing by Edmund Blair and Dale Hudson)