© REUTERS/Alkis Konstantinidis

The state visit to Germany by Turkish President Recep Tayyip Erdoğan which starts on Thursday shapes up as one of the most controversial in recent memory. It has already met with intense resentment from Germans, critical of Erdoğan’s seemingly irreversible slide toward authoritarianism and repression of the opposition.

Anti-Erdoğan demonstrations have already taken place in nine major German cities, including Berlin, Hamburg, Frankfurt, and Stuttgart over the weekend. The German Federation of Journalists and Amnesty International are organizing a protest at the Berlin’s main railway station for September 28, while a protest led by Alevi groups (the largest religious minority in Turkey) and one of Germany’s largest trade unions, Ver.di, is scheduled to take place the next day in Cologne. Meanwhile, a number of leading politicians have expressed their displeasure that Erdoğan will enjoy an official state dinner with German president Frank-Walter Steinmeier. While Chancellor Angela Merkel has signaled she will not attend (she rarely takes part in state banquets of visiting heads of states), Cem Özdemir, a prominent former leader of the Greens (and of Turkish descent) who is fierce critic of the Turkish president will be among the dinner guests: “Erdoğan has to suffer me,” he said.

The fact that the visit is still going ahead, despite such push-back, is significant. It is indicative of Ankara’s strategic importance to Berlin. Indeed, the meeting between Erdoğan and Merkel will be the third high-level meeting between German and Turkish officials within less than a month. Germany’s Foreign Minister Heiko Maas had traveled to Turkey on September 5-6, and Berat Albayrak, Turkey’s minister for economy, was in Berlin last Friday for talks with Olaf Scholz and Peter Altmaier, Germany’s ministers for finance and economy, respectively.

This week’s controversial visit, too, will be focused on repairing relations and keeping them steady. Syria and the situation in Idlib apart, at the top of the agenda will be Turkey’s economic troubles. To Erdoğan’s dislike—and very likely in line with what Merkel will put forward—any feasible way out of Turkey’s predicament will require Ankara to build up its democratic credentials.

Strategic Importance

Erdoğan’s visit comes on the heels of an escalation of tensions between the United States and Turkey last month, when US President Donald Trump slapped sanctions on two Turkish ministers and doubled tariffs on imports of Turkish steel and aluminum.

The showdown unnerved international markets, pushing Turkey’s already ailing economy over the edge. The Turkish lira plunged to a series of record lows, losing over 40 percent of its value to the dollar at the height of the crisis. After years of over-borrowing in foreign currencies, Turkish corporates and banks are now on the hook for over $300 billion, nearly half of which will mature within a year. With a depreciating currency, it is much more difficult to service these loans in foreign currencies that were accumulated when the lira was much stronger. And if these loans cannot be financed, there is a chance that Turkey’s economy could collapse.

For Germany, this is an alarming prospect—and is connected to why Berlin is now interacting with Ankara across multiple levels of government.

With a population exceeding 80 million, Turkey carries a massive market potential for German and European exports. It was Germany’s sixth largest trading partner outside of the European Union last year and the EU’s fifth largest—ahead of such countries with substantial economies as South Korea and India.

Furthermore, the EU has consistently ranked as the top destination for Turkish exports. Last year, 47.1 percent of Turkey’s exports went to the EU. In fact, the EU has attracted over 40 percent of Turkish exports every year over the course of the last decade, with the exception of 2012, when the EU’s share was still 39 percent. Germany has led the list of Turkey’s largest export markets for over a decade, drawing 9.6 percent of Turkish exports in 2017. Also, the EU invests heavily in Turkey,and no EU country is more active than Germany, with 7,000 companies currently in operation, including such big names as Bosch, Siemens, and Mercedes.

Curbing Migration Flows

But there is another—an arguably more important—reason why Germany is interested in fixing Turkey’s ailing economy: it is linked to Turkey’s curbing immigration flows into Europe.

This issue has become more acute with the impending assault by the forces of the Syrian President Bashar al-Assad, supported by Russian air power and Iranian-backed militias, on Idlib—a Syrian province 50 kilometers south of the Turkish border and the last rebel stronghold standing in the country. Idlib’s population is estimated to have soared over three million after seven years of fighting, and an assault would displace hundreds of thousands of civilians, including many jihadists, along the Turkish border.

Turkey is already struggling to host the 3.5 million Syrian refugees it has admitted since 2011.The presence of these refugees has since become an irritation, and is seen by the Turkish public as a disruption to public order and safety. With the economy faltering and unemployment rising, the migrants are now seen as burdens on the state’s resources. In the event of an exodus out of Idlib, Turkey could not afford to, and would in fact not want welcome another refugee influx.

In return, Germany fears that Turkey may not be able to uphold the migration agreement it signed with the EU in March 2016: in exchange for €3 billion (and the same amount at a later date), Turkey committed to preventing irregular migrants from crossing into Europe and taking back and hosting those Syrians who did make it to Greek shores. If the deal falls through, it could unleash another wave of refugees toward Europe’s borders.

As the violent demonstrations against foreigners in Chemnitz in early September showed, the decision to admit one million refugees in 2015 still dominates and gridlocks German politics. In this sense, Germany needs a strong-performing Turkish economy – so that it could keep serving the purpose of a buffer state.

Revisiting the Customs Union

However, Germany’s options for directly extending financial assistance are limited.

Dispersing a lumpsum is out of question, since 72 percent of the German public would not support such a move, as revealed by a recent Deutschlandtrends survey, understandably fed up with Erdoğan’s comparison of the German government to the Nazis and the rampant human rights violations in Turkey. Instead, Germany needs to work through a rules-based, institutional framework that will not be framed as a “gift” to Turkey.

Re-exploring the modernization of the customs union looks more promising, however. Turkey and the EU have been in a customs union since 1996 that removes tariffs on manufactured goods and processed agricultural products. Upgrading it would expand the arrangement into services, agriculture, and public procurement, diversify the range as well as increase the volume of Turkey’s exports to the EU, and thereby contribute significantly to its economic well-being.

Although the European Council suspended any further debates on the topic indefinitely, Albayrak brought it forward last week in his meeting with Scholz and Altmaier. It is also likely to come up this week in the Erdoğan-Merkel meeting.

Fixing Turkey’s Democratic Edifice

 To open and move the negotiations forward, however, Turkey’s democratic practice (both within and outside the country) will have to undergo a substantial uplift.  Indeed, the customs union with the EU is more than just a trade agreement; it also presupposes a well-functioning justice system, operating with the principle that strong economic links could only co-exist with rules-based governments on both sides. Re-examining it would therefore require Turkey to harmonize its rules, regulations, and institutions, both economic and political, with those of the EU.

This means that Turkey must make significant improvements to the rule of law and independence of the judiciary, as well as release the human rights activists and journalists currently serving unlawful prison sentences, including an unfortunate number of German citizens. After the recent reshuffling of the editorial board at the daily Cumhuriyet, which basically snuffed out Turkey’s last-standing voice of opposition, much will also have to be done to re-forge a climate that fosters freedom of expression and the media.

Merkel will also want to see an end to Turkey’s meddling in Germany’s domestic affairs.

Erdoğan has previously used his visits to Germany to speak to huge crowds of German-Turks, an overwhelming percentage of whom have supported Erdoğan in recent elections. He treated his last two appearances—in Cologne in 2014 and Karlsruhe in 2015—as an extension of his election campaigns, invoking incendiary language to exploit the vulnerabilities of the German-Turks, who have long claimed that they have not been able to integrate well into German society.

Merkel’s government has in return expressed its frustration with these rallies, charging that they fuel inter-communal tension. The fact that no such speech is planned for the upcoming visit should come as a relief.

However, the Turkish Embassy in Berlin has said that Erdoğan may deliver brief remarks at the opening of a new mosque in Cologne on September 29. This could evolve into a thorny issue, mainly because Erdoğan mentioned in a recent speech that Turkey’s Diyanet, the Directorate of Religious Affairs, had funded the building of the mosque. This contradicts the statement by the Turkish-Islamic Union of Religious Affairs (DITIB), which oversees the almost 900 mosques in Germany, that the project was realized through contributions from the community of believers.

No Free Way Out

Granted, should the meeting be absent of any substantial commitment from Erdoğan to changing his authoritarian style and the Syrian regime proceeds with an attack on Idlib, Merkel will have to find another way to contain the fallout. This could involve channeling funds specifically for the upkeep of refugees, but will not result in any substantial and fundamental improvements to Turkey’s economy.

Any such progress will only be possible if Turkey stops its democratic backsliding. As Merkel stated, helping Turkey is in Germany’s interest—but it cannot do so while its citizens remain imprisoned in Turkish prisons on spurious charges and Ankara’s actions violate EU’s values and principles. Once can only hope that the Turkish leadership finally accepts this fact and acts accordingly—for the simple reason that there is no other way forward.

The post A Controversial Visit appeared first on Berlin Policy Journal - Blog.

© Kayhan Ozer/Presidential Palace/Handout via REUTERS

Erdoğan and his Justice and Development Party (AKP) claimed victory on Sunday night in Turkey’s pivotal elections, securing five more years at the helm of Turkish politics. Following a historic election season, which showcased a resurgent opposition for the first time since Erdoğan’s rise in 2002, the result defied expectations of a serious challenge to AKP supremacy.

The AKP’s long-standing secular rival Republican Peoples’ Party (CHP) believed they had fielded a winner in Muharrem İnce, who drew vast crowds to his campaign rallies and stole Erdoğan’s populist thunder as an everyman. Meanwhile, Meral Akşener of the İYİ Party (“Good Party”) promised to outflank the AKP and its coalition partner led by Devlet Bahçeli, the Nationalist Movement Party (MHP) from the right, attracting nationalist and conservative votes.

But while pre-election surveys had predicted that İnce would force Erdoğan into a run-off in the presidential contest, Erdoğan defeated his challenger with 52.6 percent of the vote to his opponent’s 30.7 percent. Meanwhile in the parliamentary poll, the AKP-MHP coalition received a combined total of 53.6 percent of the vote (against the opposition “Nation” Alliance’s 22.7 percent), which translates into a comfortable majority in the legislature.

With the presidency in hand, Erdoğan will also hold all levers of the state. His victory places him in command of an empowered executive presidency, approved in a controversial constitutional referendum in April 2017. An opposition-controlled parliament would have been the only check on his powers. Now fortified by a parliamentary majority, President Erdoğan will face very few—if any—obstacles in his quest for complete control over Turkey.

Here are the most important takeaways from the elections.

It’s the Economy…Again and Always

Turkey’s once-booming economy—formerly a major source of Erdoğan’s popularity—is now on the verge of a bust. The lira may have gained in early morning trading the day after the vote (June 25), but the factors that plague the economy still remain.

A key area is interest rates. The president does not want to raise them, because doing so would conflict with his method of growth. A reduction in rates brings him lower borrowing costs, which in turn makes it easier to borrow capital to channel towards his mega-projects, such as Istanbul’s “third” Yavuz Sultan Selim bridge, or the city’s massive new airport, which will be six times the size of London’s Heathrow. These projects may deliver tangible, short-term results, but they do not contribute to sustainable growth.

In fact, they have already put the economy in danger of overheating. The lira has depreciated 20 percent since the start of this year, and will soon start tumbling again. As inflation rises further into double-digits, the cost of living will continue to skyrocket. The current account deficit is $60 billion per annum, and foreign debt is almost $453 billion.

With an economy that runs on borrowing and investments, Turkey needs foreign money to repay this debt. But reserves are running low. In the first five months of 2018, foreigners only bought $118 million  worth of Turkish equities and government bonds—a 97 percent drop compared to the same period last year. The volume of inward foreign direct investment (FDI) has also sunk to its lowest level in a decade.

Much will depend on whom Erdoğan appoints to oversee Turkey’s economy—and whether that person changes the country’s economic direction. Turkey needs higher-interest rates to cool off its “overheated” economy and to transition into a production-oriented economy that prioritizes agricultural development and long-term investment. And the backsliding in Turkey’s democracy needs to stop: This is crucial if the leadership wants to regain the confidence of financial markets and attract vital foreign funding. But if Erdoğan strengthens his grip on monetary policy—as he said he would ahead of the vote—the future looks bleak.

Erdoğan at the Mercy of Nationalists

The AKP’s support has actually decreased since the last election. Its share of the vote went down to 42.4 percent from the 49.5 percent it received in November 2015.

As a result, Erdoğan can now  command a parliamentary majority only through a coalition with the MHP (unless he moves to form a coalition with any of the other opposition parties, which is very unlikely). In a way, the ultra-nationalist Bahçeli is the real winner of these elections. Expected to win less than 8 percent ahead of the vote and having barely held any rallies, his party won over 11 percent. The president will now need Bahçeli’s support to make sure parliament does not become a stumbling block, which means the MHP leader will be at the center of Turkish politics for the foreseeable future. Erdoğan, however, has argued for years that coalition governments are unstable governments, so it remains to be seen whether he will move to capsize this equilibrium.

The Opposition: A Mixed Success

In contrast to the CHP’s previous performances, İnce’s campaign contained elements that made him more popular within conservative circles. For the first time, the party and its top candidate stopped operating as representatives of the strictly secular and the metropolitan elite. As a result, İnce managed to score 30.5 percent, breaking through the CHP’s recent average of 25 percent. This is an important achievement.

Still, not everything went his way. İnce failed to draw the support of those who had voted “no” in the referendum, including a critical percentage of AKP supporters who were feeling “Erdoğan fatigue” and were ready to break away from Turkey’s long-time leader. The results show that many of these disgruntled voters shifted their allegiance to Erdoğan’s coalition partner, the MHP, but did not cross over to support the “other” side.

Once labeled the dark-horse of the race, Akşener also underperformed. Her party, an off-shoot of the MHP, was expected to collect support from traditional MHP voters unhappy with their party’s partnership with the AKP. Analysts also expected that her right-wing credentials would make her attractive to disillusioned AKP voters. But she only scored 7 percent in the presidential race and 10 percent in the parliamentary poll, down from the anticipated 12 percent and 13-17 percent ahead of the vote, respectively.

In the end, an electoral season that lasted just seven weeks—Erdoğan had surprisingly brought the election forward by eighteen months—was not enough for these two relatively unknown figures to win over the factions within the “Erdoğan camp” unhappy with the status quo and ready for change.

With Erdoğan dominating the airwaves, manipulating the power of incumbency as well as the resources of the state, İnce and Akşener faced an uneven playing field that stacked the odds heavily against them. Television is a powerful medium in politics, especially in Turkey. According to a study released ahead of the vote, 50 percent of AKP and MHP supporters either do not have internet access or do not use it on a daily basis. These voters live in a bubble tightly sealed with Erdoğan’s cult of personality. As long as this repressive environment persists, outreach will be difficult.

Where Do We Go from Here?

The elections showed that Turkey remains a polarized society, almost divided in half. And Erdoğan’s reliance on the nationalists suggests that the president is unlikely to push for “reconciliation” with the opposition and pull the country together. His nationalist partners have spoken against moving forward on the Kurdish peace process, supported extending the state of emergency imposed after the failed coup attempt of July 2016, and traditionally been reluctant to improve relations with the West.

However, even with Erdoğan on top, the spirit of democracy is not dead. The parliament now includes seven parties, representing almost every political movement. It is Turkey’s most diverse legislature in decades. This is the result of energetic opposition campaigns that united the center-left with the center-right, the Kurds with the nationalists, and the secular with the more religiously-minded. Driving attendance by the millions, these campaigns symbolized the undying resolve of those who want a return to liberal democracy.

The anti-Erdoğan camp needs to continue to harness this yearning, and keep the president on the back foot. For the next round is just around the corner—local elections are due in March 2019.

The post How Erdoğan Won Again appeared first on Berlin Policy Journal - Blog.

© REUTERS/Umit Bektas

It was a long time coming: On June 7, the German government agreed to the withdrawal of 260 soldiers, six reconnaissance carriers and a refueling aircraft from the Incirlik airbase in southern Turkey. The move marked the culmination of a drawn-out spat over a ban on German lawmakers visiting troops participating in a US-led military coalition against the so-called Islamic State (IS). German Defense Minister Ursula von der Leyen said the troops would be re-deployed to Jordan’s al-Azraq base at the end of the month and that the transfer would be complete by mid-July.

It was the most recent low in bilateral relations that have been laden with tension for months. This time around, however, the timing may be detrimental for Turkey: as campaigning heats up in Germany ahead of the September 24 federal elections against the backdrop of an increasingly intolerant electorate, Ankara risks losing its top economic partner.

Banned from Incirlik, Again

A delegation of German lawmakers had previously been barred from entering the airbase in June 2016, shortly after the Bundestag passed a resolution referring to the massacre of Armenians at the hands of the Ottomans as “genocide.” Ankara eventually authorized the visit in October 2016, but according to Defense Ministry officials, six lawmakers’ entry permits were still pending in March.

Ankara did not issue an official statement on why it considered it necessary to block the parliamentarians’ entry into Incirlik. It only stated that the visit was not considered appropriate at the time and that, if Germany wanted to regain access to the airbase, it had to abandon its hawkish approach toward Turkey. Martin Schäfer, a spokesman for the German Foreign Office, was told through private channels that the steps were taken in retaliation against Berlin’s criticism of Ankara and Turkish President Recep Tayyip Erdoğan.

The sides have been clashing over a series of issues for months. Germany has been critical of Erdoğan’s crackdown after the failed military coup of July 2016 and has offered asylum to Turkish journalists, intellectuals, and military personnel that have fled the country since. Berlin also accused Turkey of operating an extensive network of spies on German soil in pursuit of supporters of Fethullah Gülen – a US-based cleric Erdoğan claimed was the mastermind behind the coup attempt. The fact that local authorities withheld permission for Turkish ministers to campaign in Germany in the run-up to the April constitutional referendum on granting Erdoğan sweeping new powers introduced further friction. More recently, tensions escalated over the arrest of German-Turkish journalists Deniz Yücel and Meşale Tolu on charges of disseminating terrorist propaganda in Turkey, as well as Erdoğan’s accusation that German Chancellor Angela Merkel was employing “Nazi methods” against Turkish “brother citizens and ministers” in Germany.

In what seems to have become its standard way of dealing with crises, the Turkish side did not try to de-escalate tensions with its NATO ally, instead remaining defiant. Ankara said it might have been possible for German parliamentarians to gain entry to Incirlik, but only after meeting a series of steep demands: retracting the resolution on the Armenian “genocide,” banning Kurdistan Workers’ Party (PKK) activities in Germany, and returning Turkish asylum seekers that allegedly supported the coup.

Unless Berlin was ready to deliver on these points, Turkish pro-government newspaper Yeni Şafak stated, German Foreign Minister Sigmar Gabriel would return empty-handed from a trip intended to resolve the matter. Gabriel’s Turkish counterpart Mevlüt Çavuşoğlu also remarked that Turkey would not “beg” for German troops to stay and that they “[are] welcome to do whatever they want.”

Consider the Economy

There are many reasons why such intransigence is misguided. Even an interest in preserving Turkey’s economic relations with Germany should be enough to prompt Erdoğan’s Justice and Development Party (AKP) to dial down its tone.

Germany has been the top destination for Turkish exports for the past ten years. In 2016, Turkey’s exports to Germany were valued at $14 billion – roughly 10 percent of the value of its total exports. Furthermore, trade relations are dynamic, having almost quadrupled since the end of the Cold War. Although Turkey’s trade volume has shrunk in the last few years, exports to Germany have consistently made up 9 percent of its overall export volume.

In the first three months of 2017, foreign direct investment (FDI) from the EU accounted for more than three-quarters of investments flowing into Turkey. Germany currently ranks among the top four countries investing in Turkey after the Netherlands, Austria, and the United Kingdom. Of the 1,120 Turkish companies founded in 2016 through European FDI, 400 were funded by Germany. In the first quarter of this year, German investments flowed into 68 Turkish companies, or one-third of all companies founded during the period with FDI from the EU.

Frustrated Electorate

Erdoğan is well aware of Turkey’s strategic importance. The country is being used as a base for NATO’s Middle East operations and is instrumental in stemming the flow of refugees into Europe as part of an agreement with Brussels, which many have argued has given Turkey a dangerous degree of leverage in bilateral relations. German Chancellor Angela Merkel is adamant on keeping the deal intact, which has strengthened Erdoğan’s assessment that Europe is wary of escalating the refugee crisis by risking a permanent rupture with Turkey.

The window for reconciliation may be closing, however. In an ARD-DeutschlandTrend survey conducted in February, 83 percent of German citizens said that Germany should confront Turkey more decisively. When asked whether they viewed Turkey as a reliable partner four months later, only 3 percent of respondents said yes, and 57 percent said that the chances of strengthening German-Turkish relations in the coming months were weak. In the run-up to the general election, the German electorate seems to have a low tolerance for Turkey’s transgressions – which may result in a more combative stance by German politicians eyeing political gains at home.

Several politicians have already expressed their frustration over the Incirlik issue. Claudia Roth, a member of the opposition Green Party and one of the vice-presidents of the Bundestag, referred to the ban as a “political provocation” and a new escalation in German-Turkish relations. Christine Lambrecht, the Social Democrats’ (SPD) chief whip in the Bundestag, described the showdown as “a slap in the face” for those trying to engage in dialogue with Turkey.

Merkel, meanwhile, has opted for a more conciliatory approach, describing the incident as “unfortunate.” Even von der Leyen, instead of condemning an act that many defense ministers would consider an unacceptable violation of trust between partners, placed emphasis on the fact that the lawmakers were still permitted to enter the NATO base in Konya. Others argued that this could hardly be framed as a success.

Watch Out for Caveats

Therein lies the crux of the matter: as the leader of a country that urgently requires Turkey’s cooperation, the chancellor is limited in the degree of aggression she can display. Perhaps to her frustration, she is unable to project herself as Erdoğan’s opponent. But in light of her effort to win a fourth term in office, Merkel cannot afford to seem feeble, either, making her more likely to engage in subtle gestures of resistance. The fact that Germany headed the list of countries that declined Erdoğan’s invitation to host next year’s NATO summit in Istanbul is a case in point.

To be sure, Germany will not do anything to jeopardize the refugee deal. But Turkey may feel the brunt of the fallout with Germany in the economic realm: a continued impasse could result in less FDI from Germany due to a lack of trust in the country, a market that is less willing to buy Turkish products, and more difficult negotiations on upgrading the customs union with the EU.

In order to keep the channels for economic collaboration open, Erdoğan would be well-advised to tone down his rhetoric. Instead of vitriolic attacks, what is needed is a recalibration of foreign policy that takes into consideration the economic realities on the ground. Failure in this regard – at a time when German politicians are sensitive toward anti-Turkish sentiment amongst voters – may forge a political climate that is less conducive to cooperation and therefore detrimental to Turkey’s economic interests.

The good news is that the Turkish public will likely be on board: according to a recent study by Germany’s Konrad Adenauer Foundation, Turkish citizens identified Germany as the most reliable in a group of countries that included its neighbors, the United States, and China. Interestingly, trust in Germany was strongest in the western Black Sea region and the northeastern province of Anatolia, despite their overwhelming support for Erdoğan’s AKP in recent elections and the constitutional referendum.

It could be considered a relief that, when time is running out, Erdoğan has the domestic support he needs to take the necessary steps to change track. One can only hope that Turkey’s increasingly powerful president will reconsider his stance and act accordingly.

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