The growing tensions between Turkey and a number of European Union members may negatively impact their strategic partnership. In March, both the Netherlands and Germany did not allow meetings between Turkish ministers and Turkish expat communities. These meetings and political rallies were to rally support for the April 16 referendum. The ban drew strong criticism from Turkish officials.
Moreover, in the past six months, European states escalated criticism against Turkey for its domestic policies in the wake of the July 2016 failed coup d’etat. The deepening crisis has reached a point where German Finance Minister stated that the ongoing row makes economic aid difficult, and Turkey threatening on March 14 to impose economic sanctions on the Netherlands.
However, the two sides are not fully prepared to escalate tensions to an unprecedented level. The extensive economic interests between Turkey and the EU countries that also involves the refugee crisis, energy, trade and investment, among others, may potentially prevent both parties from stoking current tensions. However, this does not negate the possibility that the future of economic partnership between Turkey and the EU would remain at stake due to many variables. The most notable of which are the trajectories of domestic developments in Turkey, and the extent of the EU’s confidence in its relations with Ankara during the presidency of Recep Tayyip Erdoğan.
Reciprocal Actions
In the aftermath of the failed coup attempt of July 15, 2016, EU institutions escalated their criticism of relevant measures taken by the Turkish government, while some Turkish officials threatened, on several occasions, that Turkey would eventually withdraw from the March 2016 refugee deal with the European Union.
On March 14, 2017, Turkish Deputy Prime Minister Numan Kurtulmuş alluded that Turkey may re-consider the agreement in response to the rising tensions with the EU. On March 11, and in another sign of the deepening crisis, the Dutch authorities barred a plane carrying Turkey's Foreign Minister, Mevlüt Çavuşoğlu, from landing in Rotterdam, and the Turkish Minister of Family and Social Policy, Fatma Betül Sayan Kaya, from meeting with the Turkish expat community in the Netherlands. These meetings were to rally support for Turkey’s upcoming referendum on constitutional amendments.
Earlier in February 2017, Turkey’s relations with Germany were strained when Turkish authorities arrested journalist Deniz Yücel, a correspondent for Die Welt who holds dual German and Turkish nationality, on charges of carrying out terrorist activities and intelligence missions. However, the rift between the two sides has not been limited to this arrest. It spread to include measures taken by German authorities to counter Ankara's attempt of organizing meetings with Turkish expatriates ahead of the referendum. Germany cancelled the permission for similar rallies in several states where Turkish Minister of Justice, Bekir Bozdağ, and Minister of Economy, Nihat Zeybekci, were due to meet with Turkish expatriates, which prompted President Erdoğan to liken the cancellations to "Nazi practices."
Possible Impact
In light of these tensions, Germany threatened to review its economic aid to Turkey, when German Minister of Finance, Wolfgang Schäuble, said it was difficult to continue working with Turkey on economic aid because of the row over Turkish ministers campaigning in EU countries and the arrest of the German-Turkish journalist in Turkey.
On March 13, Turkey had suspended high-level diplomatic relations with the Netherlands, banning the Dutch ambassador from the country and preventing diplomatic flights from landing in Turkey or using its airspace, while the Turkish Parliament said the Turkey-Netherlands Parliamentary Friendship Group will be soon abolished.
However, while the above indication may suggest that disagreements between Turkey and European countries can escalate, it is not likely that either one of the involved sides would go on to reduce economic cooperation. That is because the North Atlantic Treaty Organization (NATO) is pressing to de-escalate the situation, and German officials, simultaneously, are making efforts to avoid widening current disagreements with Turkey.
Without a doubt, mutual interests of the two sides are big enough to push them to prevent causing any further damage. These interests include oil, trade and investments, as well as cooperation on the refugee issue and combating terrorism. Looking from a wider perspective, any damage to the Turkish-European partnership can potentially impose negative impact on both parties. Turkey is a major market for European exports, which amounted to 78 billion Euros in 2016, while European imports from Turkey amounted to 66.6 billion Euros in the same year.
Moreover, there are several indications that investors from the European Union member states had around 75.9 billion Euros in capital in Turkish markets in 2015, accounting for 65 per cent of the total foreign direct investment (FDI) in Turkey.
Due to other considerations, the European Union may not take a path towards a collision course with Turkey at present. In addition to the fact that the EU members and Germany in particular need to coordinate with Turkey on the refugee issue, the EU also recognizes the importance of coordination with Turkey on energy, where several pipelines are being built to carry natural gas from Russia, the Middle East and Azerbaijan to Europe via Turkish territory.
Furthermore, the European Union may not like to resort to a trade boycott again as an option for dealing with Ankara after it lost several trade markets over the past years, including Russia where European food products were embargoed after the European Union imposed economic sanctions on Moscow in 2014.
In light of the above assessment, it may be safe to say that the two sides will most likely set aside their disagreements and focus on common challenges. The current disagreements are, therefore, not expected to have serious economic impact in the short term, particularly because of the escalating refugee crisis in the European Union.
Multiple Variables
However, this does not negate the possibility that the confidence gap between the European Union and Turkey may widen in the coming period, and could even expose their economic partnership to real dangers. However, the possibility of this scenario coming true will hinge on several variables the most notable of which are how responsive Ankara would be to European criticism over Turkey's domestic measures, and the level of coordination on the refugee issue and combating terrorism.
In conclusion, the unwillingness by either side to coordinate on these issues can possibly represent the real beginning of a downgrade of economic relations and a serious decline in Turkey's chances of joining the European Union.
