Asia Times
By Jonathan Gorvett
Dec. 12, 2020
[EU and US weigh punitive measures that if imposed would send Turkey’s
collapsing economy into free fall]
Battling the European Union (EU) over Eastern Mediterranean maritime
disputes while angering the US over a recent Russian missile deal,
Turkey now faces the threat of sanctions from two power blocks which
combined represent over a third of the global economy.
That prospect knocked points off the already embattled Turkish
currency this week, the lira, with concerns that new harsh measures
might send the already declining economy into a terminal tailspin. The
currency has fallen around 25% this year, worsening the economic
fallout caused by the pandemic.
“Given Turkey’s dire external position, further and stronger action by
the EU and/or the US could push the country back to the brink of a
balance of payments crisis,” warns Jason Tuvey, from Capital Economics
in London.
For now, however, internal divisions in Europe and personal ties
between the Turkish and US leaders look likely to moderate the impact
of any immediate action, though that could quickly change with the
incoming Joe Biden administration in the US.
“There’s concern on both sides of the Atlantic that harsher sanctions
could push Ankara further away,” Aykan Erdemir, senior director of the
Turkey Program at the Washington DC-based Foundation for Defense of
Democracies, told Asia Times.
In the longer term, though, the threat of a harsher response remains,
with both Europe and the US increasingly concerned over Turkey’s
foreign and domestic policy course, including “Neo-Ottoman” foreign
adventures that at least in part seek to restore the country’s Ottoman
Empire glory.
“Geopolitical tensions still pose a risk to Turkey’s outlook,” adds
Tuvey. Yet despite this, Turkey’s leader, President Recep Tayyip
Erdogan, “has shown little sign of toning down his belligerent
rhetoric.”
European blues
The EU’s current push for sanctions against Turkey originates in the
ongoing dispute between Ankara and EU members Greece and Cyprus over
Eastern Mediterranean sea and air boundaries.
Turkey does not recognize Greek claims to waters in and around the
Aegean Sea, nor Cypriot claims to a 200-kilometer Exclusive Economic
Zone (EEZ) off the de facto divided island.
In recent years, these disputes have become more active, with Turkey
sending its own oil and gas survey and drilling ships into offshore
blocks also claimed by Greece and the Greek Cypriots.
Collisions and stand-offs at sea have ensued, with warships deployed
to protect each side’s oil and gas vessels.
Repeated military exercises have also been held in the disputed
territories, by Turkey on the one hand and a coalition of Greek,
French, Egyptian, Cypriot and Emirati forces on the other.
Despite this, the Turkish survey ship, the Barbaros, with a flotilla
of naval escorts, continues to sail today within waters claimed by
Cyprus.
Earlier this summer, Turkey sent the Oruc Reis survey ship into an
area disputed with Greece. This triggered mobilization of the Greek
armed forces and a diplomatic intervention by EU term-president
Germany.
The de-escalation that followed saw the Oruc Reis return to port,
while the EU deferred any decision on action against Turkey until the
December 10-11 EU Council meeting.
Within a few days, however, the Oruc Reis had returned to the disputed
waters, staying there until just before the EU Council met this week
to discuss possible sanctions.
Missile trouble
At the same time, across the Atlantic, there is growing US
dissatisfaction with Turkey.
“It’s very hard to find support for Turkey’s positions in Washington
DC these days,” Ian Lesser, vice president of the German Marshall Fund
of the US in Brussels, told Asia Times.
This has followed a number of disputes, with one of the most recent
being NATO-member Turkey’s purchase of Russia’s highly effective S-400
anti-aircraft missiles, back in 2019.
This led to Turkey’s expulsion from the NATO F-35 fighter jet program,
after NATO chiefs said the S-400 deal compromised the aircraft’s
security.
The rift appeared to ease when Ankara agreed not to activate the
S-400s – yet, in October this year, the Turkish military test-fired a
missile from the system.
As a result, as an add-on to the latest US defense budget, Congress
has called for sanctions to be imposed on Turkey, including on its
defense industries, under the Countering American’s Adversaries
Through Sanctions Act (CAATSA).
While President Donald Trump, who has often boasted of his good
relationship with Erdogan, initially seemed likely to veto the
congressional move, on Friday news reports said that Trump would
likely sign off on an undisclosed range of sanctions.
“Neither Washington nor Brussels wants to be perceived as appeasing
the Erdogan government’s transgressions any further,” says Erdemir.
Competing interests
Yet, while “There is basically a consensus across the EU that what
Turkey has been doing is destabilizing,” says Lesser, “When it comes
to a policy response, it is all much less clear.”
On one end of the spectrum lies France – along with Greece and Cyprus
– which has championed tough action. On the other, “Berlin has a
stronger awareness of all the equity at stake when it comes to
Turkey.”
This “equity” includes Turkey’s major economic role in Europe, its
largest overseas market.
“Member states Germany, Italy, the Netherlands and Spain, which have
significant investments in Turkey, are also worried that any further
turmoil in Turkish markets or retaliation by the Erdogan government
could hurt their companies,” says Erdemir.
Germany is also home to some four million ethnic Turks, representing
as much as 5% of the population, while the EU also has a major deal in
place with Turkey to prevent refugees from conflicts in Syria, Iraq
and beyond heading to Europe – a lightning rod political issue in many
European countries.
So far, the German view appears to have prevailed.
On December 11, the EU Council announced that it would defer any
decision until its meeting in March, while also signaling that it
would work with the new US administration in formulating a response.
At the same time, Trump will likely have a range of possible sanctions
available to him under CAATSA, and “The US is expected to tread
lightly,” says Tuvey.
“Given the fragile state of the Turkish economy, no one wants to see
it go into a tailspin,” adds Lesser.
For now, then, President Erdogan will likely avoid any major
sanctions. Indeed, the veteran Turkish leader has remained largely
unruffled by the threat.
“Any decision to impose sanctions against Turkey won’t be of great
concern to Turkey,” he told reporters ahead of the December EU Council
meeting.
On Friday, Erdogan doubled down, saying any US sanctions imposed over
its S-400 missile purchase would “disrespect” Turkey as a NATO ally.
Also on Friday, in a speech to his AK Party, he called on US and EU
politicians to “break from the influence of anti-Turkey lobbies.”
Yet, the clock is ticking on further action in both Brussels and
Washington, with the threat of punitive action still a powerful force
on its own, say analysts.
“The sanctions threat is a reminder,” says Tuvey, “of Turkey’s
economic fragility.”