By Institut Montaigne
On August 10th, United States President Donald Trump doubled tariffs on American imports of Turkish steel and aluminum in an attempt to force Turkey to release Andrew Brunson, an evangelical Protestant pastor considered by Turkey to be a spy who cooperated with the insidious organization the Turkish government named FETÖ (the Fetullahist Terrorist Organization) that sought to overthrow the government with a coup attempt in July 2016. This measure contributed to the rapid escalation of tensions between the two countries, and as a result the lira that has already lost a quarter of its value since the beginning of the year sank further. President Erdoğan accused President Trump of launching an economic war against Turkey. What are the implications of this crisis? Soli Özel, professor of International Relations at Kadir Has University in Istanbul and Visiting Fellow at Institut Montaigne, shares his analysis.
How is the crisis opposing Turkey and the United States impacting Europe? How should the continent react?
Turkey’s economic and political stability are obviously very important for Europe. So is its ability to uphold the refugee agreement. The row between the United States and Turkey occurred precisely when the Turkish economy’s much anticipated crisis began to manifest itself more clearly. Congressional steps taken to penalize Turkey by denying it access to funds in multilateral institutions, President Trump’s hostile tweets and the imposition of economic sanctions as well as sanctions against the interior and justice ministers (unprecedented in the Atlantic alliance) obviously exacerbated the brewing crisis of confidence in the Turkish economy. The country’s currency, particularly in the absence of an interest rate hike by a Central Bank, the independence of which is at best suspect, lost much of its value. The Turkish people interpreted the American moves as inimical and the attempt to present the economic problems as foreign-induced gained traction in public opinion.
Europe is concerned about this crisis on at least two grounds:
- The first is the exposure in Turkey of major banks from countries such as Spain, Italy, France and, to a lesser extent, Germany. This is probably the reason that prompted Chancellor Merkel to say that Europe had to support Turkey, on condition that measures related to the rule of law be taken by the government in Ankara. Although it has not been officially confirmed, various publications reported that the German government was indeed preparing a package to help Turkey, where German and other European companies have considerable investments and an interest in keeping the Turkish market robust. Such a package will however most likely come with conditions on a return to orthodox economic policies, as well as demands concerning the rule of law. The fact that the German Foreign Minister went to Ankara for talks with his counterpart and President Erdoğan on September 5, is an indication of the seriousness with which the German government approaches the matter.
- The second reason why Europe could be preoccupied with economic instability in Turkey pertains to the refugee deal signed between the EU (negotiated primarily by Germany) and the government in Ankara. Another refugee flow towards Europe similar to the 2015 one, which changed the course of politics in Germany and elsewhere and helped arouse the anti-refugee sentiment that played into the hands of far-right parties, would be most unwelcome. The impending regime attack on the province of Idlib in Syria is likely to produce hundreds of thousands more refugees, which adds a degree of urgency to this concern.
In some sense, Trump’s abusive behavior is no surprise to European countries and leaders. This crisis could lead European powers to manage the Turkey issue with more care. Both sides need to think through the difficulties that bind them together rather than wishing they would disappear. The temptation to confine relations to economic issues or transactional cooperation on specific problems should also be resisted.The Turkish government already rediscovered the EU’s importance, both economically and politically, and revitalized the ministerial reform commission, which has not met in a long time. Whether such steps will restore the long-lost confidence in the dialogue between parties or cure the wounds of the bitter recriminations of the last two years between Ankara and some European capitals is however far from certain.
President Macron formulated his approach to the issue as clearly as possible. On the one hand, he rejected the eligibility of Turkey for membership in the EU, and negatively compared the Turkey of Erdoğan with that of Kemal Atatürk. On the other hand, he underscored the necessity of building a strategic partnership with Turkey, just like with Russia. Given Europe’s past record of gross mismanagement of the Turkish issue, whether or not an exclusively security-oriented vision would work out and can actually be constructive remains to be seen.
Is Turkey becoming increasingly reliant on Russia and China for its economic development, and less so on the West?
Turkey thinks of relying more on Moscow and Beijing along a number of dimensions. However, these relations remain incomparable to those with Europe, given the latter’s resources and the extensive and intimate economic ties that exist between the EU and Turkey.
- Russia cannot be a substitute for Europe economically and cannot make up for the consequences of an economic divorce between Turkey and the West.
- China is interested in Turkey and its market, but this interest is in large part a function of the close economic ties that exist between Turkey and the EU, and which could enable China to have further access to European markets.
Thus, for the relevant future, Russia and China, two countries with which Turkey has massive trade deficits, cannot replace the West as economic partners.
Could the tense relationship between the US and Turkey jeopardize the latter’s NATO membership?
There has been a lot of self-righteous and indignant talk and commentary in the United States about Turkey’s NATO membership, and whether the country still deserves to remain a member. Notwithstanding the fact that there is no mechanism to kick a member out of NATO and that the Trump Presidency’s loyalty to the organization remains suspect, the Turkish case is becoming ever more complicated.
On the one hand, as the latest NATO summit declaration indicates, Turkey is more active than ever in new NATO programs: it relies more on the organization in the Black Sea, participates in exercises and contributes to new projects.
On the other hand, Ankara is adamant in buying S-400 missiles from Russia, which cannot be harmonized with NATO’s systems for obvious reasons and could be used by Russians to decipher the secrets of F-35s. If the sale proceeds, a serious crisis cannot easily be avoided. The US Congress has already asked the Pentagon to submit a report on Turkey’s contribution to the production of F-35s and to determine the extent to which the program would be harmed if Turkey was excluded from the process. Congress is ready to scrap the sale of F-35s to Turkey if S-400s are purchased and deployed.
With such steps and the possible outrage if the sale goes through, Turkish-American relations could possibly be beyond repair, even if Turkey remains a member of NATO. As far as Europeans are concerned, given that an alternative security architecture imposes itself on Europe in the era of non-Atlanticist Trump, it would be wise to find ways of cooperating with Turkey both on hard and soft security matters. In the long run, the Turkey-Russia rapprochement ought to have its limits. Where those limits are set will be determined by how the current crisis is handled - and hopefully resolved.