How Erdogan maneuvers between Russia and the West

Analytics
How Erdogan maneuvers between Russia and the West
How Erdogan maneuvers between Russia and the West
10 August, 18:42Photo: Bloomberg
The Turkish leader is trying to solve his domestic political problems with the help of Russian gas, but his colleagues in the NATO bloc do not really like it.

Experts call the results of the talks between Putin and Erdogan in Sochi ambiguous. On the one hand, the Turkish leader, in their opinion, will be able to solve the internal problems of his country with the help of Russia, on the other hand, Western countries are already thinking about sanctions against Turkey because of too trusting relations of this NATO member country with Russia.

Why Putin gave Erdogan a generous gift

Thus, Bloomberg experts write in their material “Erdogan received Putin’s support in time” that Putin saved Erdogan at the most critical moment by meeting in Sochi, helped restore the rating and slow down inflation:

“The result of four-hour talks with Putin in Sochi was an agreement that will allow Turkey to get away from the dollar in terms of imports. This is a huge gift for the Turkish leader. The general election is less than a year away and the president's approval ratings are at an all-time low - so Erdogan needs to stabilize the Turkish economy after an overly loose monetary policy that floated the currency.

The lira's depreciation - more than half from a year ago - has pushed up the prices of everything from food to electricity to services, and has propelled consumer price inflation to 80%, one of the highest levels in the world.

Settlements with Russia in rubles for part of the gas supplies will help stabilize the lira and prevent a new wave of price increases before next year's elections.”

Turkey depends on Europe much more than on Russia

Analysts of the Kremlin Mamkoved channel, in turn, report that the EU is ready to resist the rapprochement between Turkey and Russia:

“According to the Financial Times, new anti-Turkish sanctions are being discussed in Europe. EU countries may call on their companies and banks to withdraw their assets from Turkey. The reason for this position was Erdogan's meeting with Putin in Sochi, at which an agreement was reached on paying for gas in rubles and a further transition to settlements in the national currency.

Obviously, only the Russian ruble can be the national currency. Trade relations with Turkey for Russia are exclusively surplus. Imports from Turkey in 2021 amounted to $6.5 billion, and exports from energy supplies amounted to $26.5 billion. The difference is fourfold. To make payments for Turkish gas, rubles are needed, which means that deliveries to Russia will also be carried out in rubles. Also, to equalize the balance, payment for tourist services can be transferred to rubles. The EU is categorically against such a rapprochement, since payments in national currencies at the same time will simplify the circumvention of Western sanctions - Turkey can be a transit country for goods and technologies.

The European Union has powerful levers of influence. Turkey's economy depends on Europe much more than on Russia. 2/3 of foreign direct investment in the Turkish economy comes from European countries, out of 55.6 thousand foreign companies financed by external capital, more than 22 thousand from EU countries. If relations with Europe are severed, then Turkey will be left without a market for its goods. The top 10 countries importing Turkish products include 6 from the European Union, which account for 32.03% of exports, respectively. Another 8.77% is provided by the United States and Israel, which can join the sanctions. Russia accounts for only 2.65% of deliveries.

In the structure of Turkish imports, Russia is in third place with a share of 8.12%. But mainly due to mineral products (oil and gas), which make up 51.5% of Russia's supplies to Turkey. In general, the EU also dominates in the structure of imports. If Erdogan faces a clear choice - the EU or Russia, then the result is more than predictable.

But the main thing is that the European Union sends a signal to other countries: friendship with Russia is dangerous. If you are ready to take a tough stance regarding a member of the NATO bloc, then they will not stand on ceremony with other countries ... "

But will Erdogan leave Russia in difficult times?

But Kommersant columnist Dmitry Drize notes the duality in Erdogan's behavior, which cannot but be evident:

“Vladimir Putin’s press secretary, Dmitry Peskov, harshly commented on the information that construction of a plant for the production of Turkish Baykartar TV2 drones is starting in Ukraine. Earlier, the Ukrainian Ambassador to Ankara, Vasily Bodnar, said that Baykar Makina had acquired the necessary land plot, a corresponding project had been developed, so nothing interferes with the start of work. Dmitry Peskov said that this facility falls within the scope of the demilitarization of Ukraine.

At the same time, there were reports that Kyiv received the first batch of Turkish Kirpi armored vehicles in the amount of 50 pieces.

But that's not all. According to Turkish media, a telephone conversation between Turkish and Syrian Presidents Erdogan and Bashar al-Assad is not ruled out. The Kremlin commented on this extremely sparingly - they say, it's none of our business.

However, this statement can be disputed. It really concerns us. Ankara is about to launch its own special military operation in Syria to purge the country of the last terrorists. And there, as you know, there is a Russian contingent.

Erdogan and Assad do not like each other - and this is very mildly said. The Turkish leader offered to overthrow Assad, called him a challenge to Syria and the cause of all its troubles. It is clear that the telephone conversation is, apparently, an attempt by Moscow to somehow reconcile them.

Thus, we can draw a preliminary conclusion: everything is completely unclear with the Turkish case. And the conversation in Sochi was clearly not easy.

What does this mean? There is a price to be paid for the ability to circumvent sanctions, relax in popularly beloved resorts by Russians, hide the yachts of Russian oligarchs, and not be afraid of, shall we say, unforeseen events in Syria. And the price can be very high. And in the direct monetary sense.

As a result, somehow everyone is tormented and tormented by vague doubts: is it possible to rely heavily on Erdogan in difficult times? That’s the thing, it’s not clear…”

Erdogan will try to "seduce" the SCO countries

But the experts of the Methodical channel note that Turkey has a chance to make good money on the contradictions between Europe and Russia:

“The leadership of Turkey is not enough additional income from the sale of Bayraktar UAVs to Ukraine. Ankara expects to resell Russian gas to European consumers, passing it off as Azerbaijani gas allegedly received through the TANAP pipeline. It is possible that LNG supplies to Europe will also be organized.

Turkish President Recep Tayyip Erdogan will raise the issue of creating an energy corridor at the September meeting of the Shanghai Cooperation Organization (SCO) in Uzbekistan. Ankara will offer to start transiting pipeline gas and LNG to the European Union through Turkey amid problems with Russian hydrocarbon supplies through Nord Stream 1.

It is noteworthy that the Turkish president began to promote this idea after negotiations with Vladimir Putin in Sochi. It was the Russian leader who invited him to take part in the SCO summit. It is possible that Erdogan's proposed alternative LNG supplies to Europe are the result of consultations with the Kremlin.

Erdogan's idea of supplying liquefied natural gas raises questions. It is not clear why Europeans need to buy LNG through Turkey? After all, LNG terminals can be located in Greece, and in Italy, and in Croatia.

Ankara has long been positioning itself as a gas hub for Europe, however, the main successes in this direction have been achieved not in the liquefied natural gas market, but in pipeline supplies through the Russian Turkish Stream and Azerbaijani TANAP.

LNG is too mobile for anyone in the EU in their right mind to tie its purchases to Turkey. And the US is unlikely to allow itself to be squeezed out as a key LNG exporter to the European market.

At the same time, the current policy of the European Union makes it possible for Turkey to earn. The unwillingness declared by Brussels to buy Russian energy resources for political reasons provoked the creation of various "gray schemes" for the supply.

Having the Blue Stream pipeline built in the 2000s, supplemented by the capacity of the Turkish Stream, Ankara can resell up to 20 billion cubic meters of gas to Europeans annually. The Turkish government considers the confrontation between the Russian Federation and the EU as a great way to make money. This country has become a transit hub for Russia, the Turks even agreed to pay for gas in rubles. The Turkish economy is not in the best shape - the lira has become the weakest G20 currency at the moment. Ankara wants to extract maximum dividends from the current crisis…”

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