EU ready to support Greece in talks with Turkey over eastern Mediterranean


Jamie Prentis
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The European Union is ready to support Greece in its talks later this month with Turkey that will look to resolve long-standing differences over maritime boundaries in the hydrocarbon-rich eastern Mediterranean.

The bloc's foreign affairs spokesman welcomed the planned resumption of negotiations later this month in Istanbul, but said it was important that Turkey behaved "constructively" towards EU members, at a time when relations between Ankara and Brussels have often been frayed.
"If Greece decides that it needs support from the EU in these bilateral talks with Turkey, I think our Greek partners know what they need to do to get such support," said Peter Stano.

“I can only recall how strong and how clear the EU was in expressing solidarity with Greece in this particular case, and the need to solve all the issues that are between Greece and Turkey behind the negotiating table.

“So it is good – if the announcements and intentions will be finally translated into concrete actions and negotiations,” Mr Stano said.

The planned talks will mark the first time since 2016 that Greek and Turkish officials have sat down to try to deal with the disputed offshore energy resources.

While the Greek foreign ministry confirmed that the 61st round of exploratory talks would reconvene on January 25, local media denied reports that both sides’ foreign ministers had agreed to talks specifically between themselves.

Turkish President Recep Tayyip Erdogan said the negotiations would signal “a new era” in relations as he underlined Turkey’s readiness to “put our relations back on track” with the EU.

He also said Turkey wanted to repair its relationship with France. Mr Erdogan and French President Emmanuel Macron have engaged in a war of words in recent months.

But the Turkish leader also told ambassadors to Turkey from EU member states that Greece must “avoid fuelling tensions” in the eastern Mediterranean.

"We must stop the Mediterranean from being an area for competition and turn it into waters that will serve our long-term interests," he added.

Mr Erdogan urged the EU to honour its promises to Turkey, which include updating their customs union and waiving visa requirements for Turkish citizens. He also called on Brussels to update a 2016 deal in which Turkey stemmed the flow of migrants towards Europe in exchange for financial assistance.

Turkey’s foreign minister Mevlut Cavusoglu told the ambassadors that his country was pressing ahead with reforms that would allow it to join the EU.

“The EU should not hinder but give support to us,” he said.

Brussels has, however, suggested it could expand sanctions on Turkish officials over drilling in waters claimed by Cyprus, which is also at odds with Turkey over disputed waters.

Greek foreign minister Nikos Dendias addressed his parliament’s defence and foreign affairs committee on Tuesday over a bill to extend the western limit of its territorial waters in the Ionian Sea to 12 nautical miles, after negotiations with Italy and Albania.

While the bill does not directly affect Turkey, the draft legislation is being watched closely by Ankara. The bill states that Greece retains the right to exercise its rights in other parts of its territory under the 1982 United Nations Convention on the Law of the Sea.

Turkey has warned a similar move in the Aegean Sea – which Greek officials have hinted at – would be a cause for war.

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Will the pound fall to parity with the dollar?

The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.

Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.

New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.

“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.

The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.

The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.

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