Germany, Austria and Switzerland are expected to withdraw financial support for Turkey's controversial Ilisu Dam. The two billion euro ($2.8 billion) dam threatened to flood Kurdish settlements and ancient archaeological sites, while starving Iraq and its endangered marshes of water.

The 1,200-megawatt dam would be the second-largest in Turkey and the dam site is situated on the upper Tigris river about 40 miles from the border with Iraq and Syria.  Dam plans first fell apart seven years ago when a private consortium of financiers and builders cited humanitarian and environmental concerns.

In 2006 the Austrian firm VA Tech Hydro put together a new consortium.  The governments of Germany, Austria and Switzerland promised export credit guarantees, a type of insurance policy, if Turkey lived up to 153 criteria, including monitoring biological impacts, protecting historic monuments, and ensuring that the 60,000 people affected by the dam were provided with resettlement options.

But human rights activists, archaeologists and even Turkish pop singers have campaigned against Ilisu and say that Turkey has not lived up to its end of the bargain. In late 2008, Europe suspended these export credit contracts for 180 days. Now, Frankfurter Rundschau reports that the contracts will be cancelled on July 6. Such a withdrawal would mark the first time that government export credit contracts have been cancelled for humanitarian and environmental reasons, according to the Environmental News Service.

Although Turkey lacks financial backing and engineering expertise to build the dam, it has said it plans to move forward.  The Forest and Environment minister wants to relocate the 10,000-year-old city of Hasankeyf to a "cultural park" and will begin building a new foundation on July 20, according to Hurriyet DailyNews.  However, just 25,000 euros ($34,945) have been allocated to protect the ancient city and its artifacts.

Image of Hasankeyf courtesy Senol Demir via Flickr