Türkiye Earthquake Could Result in Loss of Up to 1% of Country's GDP in 2023

This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
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Türkiye Earthquake Could Result in Loss of Up to 1% of Country's GDP in 2023

This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)

The potential economic effects of the earthquake in Türkiye could result in a loss of up to 1% of the country's gross domestic product this year, the European Bank for Reconstruction and Development (EBRD) said in a report published on Thursday.

The bank added this is a "reasonable estimate" due to the expected boost from reconstruction efforts later this year, which will offset the negative impact to infrastructure and supply chains, Reuters said.

"The earthquake affected to a large extent agricultural areas and areas where there is light manufacturing, so spillovers to other sectors are limited," EBRD chief economist Beata Javorcik told Reuters.

Türkiye and neighboring Syria have been rocked by a devastating earthquake on Feb. 6 which has killed more than 41,000 people and left millions in need of humanitarian aid, with many survivors having been left homeless in near-freezing winter temperatures.

Growth for Türkiye, the single biggest recipient of EBRD funds, has been revised down to 3% from 3.5% in 2023, without considering the impact of the earthquake in the estimates.

The bank added that growing external financing requirements and political uncertainty associated with elections in 2023 create significant economic vulnerabilities.

Türkiye’s earthquake has thrown into disarray plans for elections to be held by June, sparking frantic debate within President Tayyip Erdogan's government and the opposition over a possible delay.

"As depreciation of the Turkish lira outpaced inflation since 2015, Türkiye’s exports have been growing fast, benefiting from lower costs expressed in US dollars," the report added.

Türkiye’s lira hit a fresh record low on Wednesday.



Ukraine Realizes a Dream as It Launches EU Membership Talks, but Joining Is Likely to Take Years

Ukrainian Deputy Prime Minister for European Affairs Olga Stefanishyna (6-L, front row) poses with European affairs ministers and representatives at the first meeting of the Conference on Accession of Ukraine to the European Union in Luxembourg, 25 June 2024. (EPA)
Ukrainian Deputy Prime Minister for European Affairs Olga Stefanishyna (6-L, front row) poses with European affairs ministers and representatives at the first meeting of the Conference on Accession of Ukraine to the European Union in Luxembourg, 25 June 2024. (EPA)
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Ukraine Realizes a Dream as It Launches EU Membership Talks, but Joining Is Likely to Take Years

Ukrainian Deputy Prime Minister for European Affairs Olga Stefanishyna (6-L, front row) poses with European affairs ministers and representatives at the first meeting of the Conference on Accession of Ukraine to the European Union in Luxembourg, 25 June 2024. (EPA)
Ukrainian Deputy Prime Minister for European Affairs Olga Stefanishyna (6-L, front row) poses with European affairs ministers and representatives at the first meeting of the Conference on Accession of Ukraine to the European Union in Luxembourg, 25 June 2024. (EPA)

The European Union launched membership talks with Ukraine on Tuesday, a decade after Russian troops seized the Crimean Peninsula to deter the country from moving closer to the West, part of a chain of events that set the two neighbors on the path to war.

Ukraine’s accession negotiations were set in motion at an intergovernmental conference in Luxembourg. Moldova is also due to launch its membership talks later Tuesday. While the events are a major milestone on their European paths, the talks could take years to conclude.

In opening remarks presented via video-link, Ukrainian Prime Minister Denys Shmyhal described it as “a historic day” that marks “a new chapter” in his country’s ties with the bloc, particularly as the war with Russia rages on.

“We fully understand that there is still much work ahead of us on the path to accession. We are ready for it. We have demonstrated that we can move swiftly and achieve the impossible,” Shmyhal said.

Belgian Foreign Minister Hadja Lahbib, whose country currently holds the EU’s rotating presidency, described it as “a historic moment for us all, and marks a milestone in our relationship.”

Lahbib said the EU condemns “Russia’s unjustified and unprovoked war of aggression against Ukraine and salutes the resilience of the Ukrainian people,” and added that the bloc will continue to support Ukraine in the war “for as long as it takes and as intensely as needed.”

Ukraine's delegation was led in Luxembourg by deputy prime minister for European and Euro-Atlantic integration Olga Stefanishyna. “This is a truly historical moment for my country. All the nation stands as one behind this decision,” she told reporters as she arrived for the ceremony.

Stefanishyna said the hope embodied in the opening of the talks will give Ukraine's citizens “the moral power to continue withstanding” the Russian invasion.

The intergovernmental conference officially started the process of aligning the country’s laws and standards with those of the 27-nation bloc, which is notably concerned about corruption in Ukraine. However, the actual negotiations are unlikely to begin for a few months.

Both Ukraine and Moldova applied to join the EU in the days and weeks after Russia invaded in February 2022. By June 2022, EU leaders had quickly made it all official. But things have moved more slowly since then for Kyiv and membership, if it comes, might be years away.

Türkiye's accession talks have lasted almost two decades without result.

Still, starting the talks process is sending another strong signal of solidarity with Ukraine beyond the financial support the EU has provided, which officials estimate at around 100 billion euros ($107 billion). It’s also a show of support for Moldova, which has faced its own challenges with Russia.

Candidate countries must bring their laws and standards into line with those of the EU in 35 policy areas, known as chapters, ranging from the free movement of goods through fisheries, taxation, energy and the environment to judicial rights and security.

Unanimous agreement must be given by all 27 member countries to open or close chapters, providing ample opportunity for EU nations to demand more work or to delay proceedings.

Hungary, which takes over the EU’s rotating presidency from Belgium in July, has routinely put the brakes on EU and NATO support for Ukraine.

“We are still at the beginning of the screening process. It’s very difficult to say at what stage Ukraine is in. From what I see here, as we speak, they are very far from meeting the accession criteria,” Hungarian Minister for European Affairs Janos Boka said as he arrived at the venue.

Bordering EU members Poland, Slovakia, Hungary and Romania, Ukraine would overtake France to become the largest member of the bloc if it joined, shifting its center of gravity further eastward. As a top grain producer its entry would have a huge impact on EU agriculture policy.

Together with Moldova, Ukraine stands in a long line of EU hopefuls — Albania, Bosnia and Herzegovina, Georgia, Montenegro, North Macedonia, Serbia and Türkiye — with years-long membership aspirations and which have felt left behind by Kyiv’s rapid progress.

Ukraine wants to join by 2030, but it must carry out dozens of institutional and legal reforms first. That daunting list is led by steps to combat corruption and includes broad reforms to public administration and judiciary.