European Union sanctions against Turkey for drilling off Cyprus are muddying the waters for any chance of reunifying the island divided after an unlawful 1974 invasion, Turkey’s Ambassador to Greece said.

Speaking to the Turkish Anadolu Agency in an exclusive interview, Ambassador Burak Ozugergin criticized the penalties that include breaking off some mild-level talks and now with the  European Investment Bank (EIB) holding back lending to the government until year’s end.

Ozugergin called the decision a mistake. “The EU, by losing its chance to play a positive role in solving the Cyprus problem, in a sense has disqualified itself,” he said, without adding if he thinks there’s no no chance for a resolution.

The last round of talks broke off in July, 2017 at the Swiss resort of Crans-Montana when Turkish President Recep Tayyip Erdogan and Turkish-Cypriot leader Mustafa Akinci said they would never remove a 35,000-strong standing army on the occupied territory and wanted the right to militarily intervene again when they wanted.

The situation worsened when Turkey sent two ships into Cyprus’ Exclusive Economic Zone (EEZ) to drill for gas in waters near where the legitimate government of the island licensed foreign companies to hunt for energy, including the US’ ExxonMobil, which reported a major gas find.

The EU and United States have backed Cyprus’ right to drill in its EEZ, parts of which Turkey doesn’t recognize. Turkey also doesn’t recognize the legitimate government, a member of the EU that Turkey has been trying to join since 2005.

Ozugergin said no one can sit at the negotiating table before the demands of the Greek-Cypriots become clear, although they have been. “So far there has been no positive signal,” he added.

Greece and Turkey, along with the United Kingdom, the former Colonial ruler that still has a military base there, are guarantors of security for the island.

“As the EU Bank, the EIB will follow the Council’s recommendations and, notably, will take a restrictive approach toward the submission of new lending operations to its Board for approval for the rest of the year,” an EIB spokeswoman told Reuters.

The EIB, which is Turkey’s biggest single lender, has spent between 0.4 billion euros ($446 million) and 2.2 billion euros ($2.45 billion) a year in the country over the last three years, while nothing has been invested so far in 2019.

The European Council said because of Turkey’s “continued and new illegal drilling activities,” it would suspend civil aviation negotiations and “agree not to hold the Association Council and further meetings of the EU-Turkey high-level dialogues for the time being.”

The freeze is not currently expected to affect private sector projects and the bank could still sign around 350 million euros ($390,86 worth of deals before the end of the year if it gets the green light from EU finance ministers on the EIB board, pulling the rug out from under the sanctions.

“A review of the Bank’s strategic orientations of its lending activities in Turkey is scheduled for later this year,” the spokeswoman added. Turkey has said that any EU funding cuts will not affect its drilling off Cyprus.