The European Court demands that Syria pay 29.4 million Euros due to late debts 

The European Court of Justice approved two default judgments against the Syrian government, requiring the payment of approximately 29.4 million Euros, due to two lawsuits filed by the European Investment Bank, in order to collect unpaid loans, some of which were obtained decades ago.

The two rulings come after the end of the period granted to the Syrian government to defend the cases filed against it in court.

The first ruling: The issue of strengthening the electricity network.

The text of the first ruling, on Wednesday, October 18, on the official website of the Court of Justice, stated that it obligated the Syrian government to pay an amount equivalent to 28.7 million Euros, representing the remaining installments and the interest resulting from the delay in payment, to the European Union, in its capacity as a representative of the European Investment Bank, in accordance with the loan agreement concluded in 2001 regarding the project to strengthen the electricity distribution network in Syria.

Following the cooperation agreement between the European Economic Community and Syria, on January 18, 1977, the European Investment Bank concluded, on February 5, 2001, the aforementioned loan agreement with the Syrian government.

Under the loan agreement, the European Investment Bank granted the government a loan of 115 million Euros, which can be withdrawn upon request, while the total amount drawn under the loan agreement in the period between March 2005 and August 2009 amounted to 100.6 million Euros.

The Syrian government was required to repay the loan with interest in periods of 30 semi-annual installments, starting in August 2006, according to the agreement.

Since December 2011, the government has failed to pay the installments due under the loan agreement.

The second ruling: The water supply projects.

The same court also ruled for the European Investment Bank, in another case, with a ruling in absentia against the Syrian government, in a case regarding its non-payment of the installments due to finance the water supply project in Suwayda Governorate, Southern Syria.

The court decided to oblige the Syrian government to pay an amount equivalent to 652 thousand Euros, representing the remaining installments and the interest resulting from the delay in payment, to the European Union, in its capacity as a representative of the European Investment Bank, under the loan agreement concluded in 1986 regarding financing the water supply project in Suwayda Governorate.

The European Economic Community granted the government a loan of 3.2 million Euros, which was disbursed in installments between January 1987 and June 1996.

The Syrian government was required to repay the loan with interest in periods of 60 semi-annual installments, starting from September 1996, according to the agreement.

Since March 2012, the government has failed to pay the installments due under the loan agreement.

It’s noteworthy that the European Investment Bank is a non-profit financing institution affiliated with the European Union, with a capital of 150 billion Euros, and it grants loans for investment and infrastructure projects inside and outside the borders of the Union.

Following the European Union’s decision to stop the bank’s cooperation with Syria, after 2011, projects that the bank was about to finance were halted, most notably a loan worth 200 million Euros to build a power generation station operating on natural gas in Deir al Zour Governorate, eastern Syria.

It also stopped funding for a health care and water project worth 185 million Euros.

The project aimed to equip hospitals in various regions of Syria and build seven wastewater treatment plants.

The Syrian government promotes that the country’s record is free of internal or external debts, in light of the lack of transparency in state institutions in terms of the availability of information and statistics related to the Syrian economic situation.

In its report issued at the end of 2022, the World Bank estimated the total value of Syria’s external debt at about five billion dollars until the end of 2021, an increase over the year 2020, when the value of the debt at that time recorded about four billion and 763 million US dollars.