Tuesday

17th Sep 2019

Erdogan picks EU fight, as Turkish economy tanks

  • Falling popularity and wobbly economy, as Turkish president Recep Tayyip Erdogan seeks 'scapegoats' (Photo: Wikipedia)

Turkey's president has railed against the EU and continued to escalate a gas-drilling dispute, amid dire predictions for the Turkish economy.

Recep Tayyip Erdogan said Europe had failed to help Turkey take care of Syrian refugees or to make good on accession promises to Balkan states.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"We forestalled many humanitarian tragedies in the Aegean [sea] and prevented the irregular [border] crossings to Europe ... But we did not see the support and humanitarian approach we expected from our European friends during this difficult process," he said at a summit in Sarajevo on Monday (8 July).

The EU had paid out just €2.5bn of a promised €6bn on refugee aid, leaving Turkey alone to "carry the burden", Erdogan added.

"Recently, some short-sighted populist circles have blocked EU enlargement policy," he also said, referring to an EU decision to put off accession talks with Albania and North Macedonia,

"Negative trends toward division and discrimination have spread across the continent and endanger not only internal peace within the EU but the hope and potential of the [Balkans] region," he added.

Erdogan spoke as two Turkish ships drilled for gas in disputed waters near EU member Cyprus, with France, Greece, and the US urging him to call off the operations also on Monday.

He also spoke after his bodyguards clashed with Bosnian airport police when they refused to hand over their guns, in an incident seen as a sign of Turkish arrogance by some.

"They [Erdogan's bodyguards] were aggressive and behaved as if they were in their own country ... They did not respect our laws and deserved to be arrested," Zoran Galic, a Bosnian police chief, told press.

"We call on Turkey to avoid any action that would be unlawful and could jeopardise regional stability," the French foreign ministry said on the gas dispute,

"We urge Turkish authorities to halt these operations and encourage all parties to act with restraint and refrain from actions that increase tensions in the region," the US state department added.

The EU has threatened sanctions against Turkey if the drilling goes on, which could see cuts in EU aid and a freeze on European Investment Bank lending.

The US has also threatened sanctions in a separate dispute over Turkey's recent decision to buy Russian missile systems.

Erdogan's disputes with his Western allies come amid dire predictions for the Turkish economy, with some financial analysts saying that he is looking for "scapegoats" for internal problems.

The disputes also come amid his falling popularity - an opposition party recently won mayoral elections in Istanbul and some of Erdogan's former allies, such as Ali Babacan, his former economy minister, have split off to form their own political party.

For its part, Moody's, the US-based ratings agency, junked Turkey's debt rating further on Monday in a complaint on Erdogan's one-man style of rule.

Bank chief fired

Turkey remained "highly vulnerable to a further prolonged period of acute economic and financial volatility," it said in a statement after Erdogan fired his central bank chief on Saturday.

"The sanctions which the US congress will consider ... cast a further shadow over Turkey's economy and financial system," Moody's said.

It blamed the vulnerability on Erdogan's bullying of the central bank to perk up economic growth instead of letting it deal with long-term problems, such as stabilising Turkey's banks.

Erdogan, last year, also appointed his son-in-law as finance minister, shaking confidence in the country's financial architecture.

The Turkish president defended his actions on Monday, saying: "He [the former central bank head] did not inspire confidence in markets. His communication with markets was not good".

Crisis foretold

But Ashmore Group, a London-based asset management firm, said Turkey could go the way of Venezuela in terms of economic collapse if Erdogan continued to interfere in fiscal policy.

"The government ... blames other groups instead of itself, because this works politically, but it only makes investors and businesses even more worried, as Erdogan will need more and more scapegoats as the economy worsens," the company's Jan Dehn said.

Businesses will soon "take action to defend their wealth and livelihoods - this results in capital flight, declining investment, and other hedging strategies", he added.

But that is likely to see Erdogan counter-attack with "capital controls, nationalisation, forced conversion of contracts to lira from euro" and "eventually the government has no financing, no growth, no future and plunges into a big crisis", he also said.

Analysis

How should the EU handle Russia now?

Should West help Russian opposition in its struggle against the regime, or make new deals with Putin, as France is keen to do?

Central European leaders demand Balkan EU accession

Czech Republic, Hungary, Poland, and Slovakia have demanded to open accession talks with North Macedonia and Albania this year, as Hungary's man prepares to take over the enlargement portfolio.

News in Brief

  1. Germany prepared to top up post-Brexit EU budget
  2. New Saudi attack threats, but EU and US still divided
  3. EU anti-trust chief goes after Belgian tax breaks
  4. Luxembourg PM Bettel humiliates Johnson
  5. No new backstop proposal at Juncker-Johnson lunch
  6. Saudi oil production in flames after drone attack
  7. US: attack on Saudi oil came from Iran or Iraq
  8. Poll: Belgium's far-right Vlaams Belang largest party

Opinion

Time to pay attention to Belarus

Belarus may be hosting the European Games, but Vladimir Putin is not playing games when it comes to Belarus' independence. The West needs to get serious as well.

Analysis

EU should stop an insane US-Iran war

"If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!", US president Donald Trump tweeted on Monday (20 May).

Stakeholders' Highlights

  1. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  2. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  3. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  4. Nordic Council of MinistersNo evidence that social media are harmful to young people
  5. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  6. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  7. Nordic Council of MinistersEducation gets refugees into work
  8. Counter BalanceSign the petition to help reform the EU’s Bank
  9. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  10. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  11. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  12. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat

Latest News

  1. EU must give full support to Ukraine to dissuade Kremlin
  2. EU divided on how to protect rule of law
  3. Nordic region to become world's most sustainable and integrated
  4. In detail: Belgium's EU nominee faces crime probe
  5. France urges EU virtual currency rules amid Libra risk
  6. Brexit and new commission in focus This WEEK
  7. As recession looms, Europe needs more spending
  8. How should the EU handle Russia now?

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Join EUobserver

Support quality EU news

Join us