Turkey is reiterating warnings and objections — which were already explicitly issued by Ankara last week — against Cypriot moves to leverage the country’s offshore energy reserves as part of Nicosia’s efforts to stave off an economic collapse. Cyprus used its offshore natural gas reserves as a last-ditch guarantee to secure bailout funds and seeks to speed up exploitation of the reserves. Turkish Deputy Prime Minister Ali Babacan acknowledged this week that leveraging the reserves “may be necessary” for Cyprus, but nonetheless reemphasized Turkish objections:

Turkey does not approve of the European Union’s bailout solution for Greek Cyprus, Turkish Deputy Prime Minister Ali Babacan has said, also finding unacceptable a loan method that provides natural resources in the Eastern Mediterranean as a guarantee. “The method applied in Greek Cyprus may be necessary for the country. But I say it is not right on principle,” Babacan was quoted as saying by Anatolia news agency yesterday…

The Turkish Foreign Ministry warned that the Greek Cypriot plan would risk a fresh crisis in the region, saying such a move would ignore Turkish Cypriots’ equal rights to the hydrocarbon resources of the island, in a statement on March 23. “Possible plans to put the island’s joint resources up as collateral for a ‘solidarity fund’ or any other loan agreement is just another reflection of the Greek Cypriot illusion that it is the sole owner of the entire island and it risks a fresh crisis in the region,” the statement said.

Turkish troops invaded Cyprus in 1974, seizing the northern third of the island and garrisoning 40,000 there. Ankara’s ongoing presence on the island has been blasted by U.S. lawmakers for, among other things, limiting Cypriot political independence, economic stability, and energy development. Turkish Prime Minister Recep Tayyip Erdogan recently threatened to deploy warships to back up Turkish opposition to Cypriot drilling.

Linking Cyprus’s energy reserves to an E.U. bailout will complicated Turkey’s efforts to slow Cypriot drilling. The loans are seen as critical to preventing a total collapse of the Cypriot economy, which would risk “an utter breakdown… of the country’s social fabric” and threaten the cohesion of the Eurozone.

[Photo: World Economic Forum / Wiki Commons]