Since the beginning of August, Turkey has plunged into an economic crisis. The reason is a sharp devaluation of the lira against the dollar. A number of geopolitical quarrels preceded these events, which eventually resulted in a public confrontation between US Presidents Donald Trump and Turkey Recep Tayyip Erdogan.
Experts already say that such a confrontation can result in a large-scale economic crisis not only for the countries of the Middle East and Europe, but for the whole world. Moreover, at stake are very important for geopolitical stability in the world the issue of unity in NATO, the possibility of creating new military alliances and the further deterioration of relations between the EU countries and the United States.
Ukraine against this background can get into even greater turbulence, because the domestic raw material economy is very sensitive to any instability in the financial markets. In addition, it will be necessary to make a very difficult geopolitical choice with whom to “make friends”: with Turkey, the EU or the US. Immediately with all to remain on good terms will not succeed, because we are talking about very contradictory processes that occur in the relationship between these geopolitical players.
The conflict between Turkey and the US has been brewing for a long time. The reason for the escalation of the situation were the political demands of the states to each other. In late July, the US ultimatumally requested Turkey to release from prison US pastor Andrew Brunson, accused by Turkish law enforcement officers of committing crimes on behalf of terrorist groups and espionage. The Americans warned: in case of refusal they will apply sanctions.
The collapse of the lira and the rejection of dollar settlements: why does not Turkey give the United States anyway?
Against the backdrop of American sanctions, the Turkish lira fell by record. Nevertheless, Erdogan said that Turkey will not lose the economic war. The aggravation of relations between Washington and Ankara and the consequences was discussed with experts.
However, Ankara did not listen to the demands of the United States. Like, no one has the right to dictate to Turkey what to do with criminals. But the Turkish authorities earlier suggested that Americans exchange Brunson for Fethullah Gülen, which Erdogan accuses of organizing and attempting to carry out a coup d’etat in the summer of 2016. Gülen has official refugee status in the US and, of course, Americans refuse to cooperate with Turkey in extradition of the politician opposed to Erdogan.
Since Turkey refused to release Andrew Brunson, US President Donald Trump decided to act more resolutely. The Americans imposed sanctions against the Ministers of Justice and Interior of Turkey, and suspended the preferential treatment regime for the export of Turkish products (primarily aluminum and steel). This news shook the markets and caused a significant devaluation of the Turkish lira.
But the question is not only in the exchange of captives. The US negatively regards the rapprochement between Turkey and Iran, as well as Erdogan’s comradely intentions to develop relations with Russia and support the Hamas movement. In turn, Turkey is very negative about the latest geopolitical steps of Donald Trapma, which openly calls the world to isolate Iran and strongly supports the policy of Israel. Added tension and support to the US Kurdish armed groups that fought against ISIS in Syria.
Life in a debt.
The crisis in Turkey can hurt even the EU countries. After all, most of the infrastructure projects in Turkey are credited at the expense of European banks. In recent years, the Turkish economy has shown success, however, all this is not the least due to borrowing. The external debt of the country grew from 130 billion dollars in 2002 to 1.5 trillion dollars in 2018.
Erdogan Almighty: how to be the president of Turkey, who lost the majority in his own parliament?
What should the victorious Turkish president do, who quarreled with the West and lost the majority in his own parliament?
That is why the European leaders in the conflict “Trump-Erdogan” took the position of the Turkish leader. Thus, German Chancellor Angela Merkel expressed her hope that the situation with the lyre will be balanced, and in the German government in general, the US was criticized for conducting a trade war against Turkey.
The fact is that if Turkey fails to pay its debts due to the crisis, European banks will miss hundreds of billions of euro loans. And these are inevitable problems for the EU economy itself. In addition, Ankara has another advantage – the millions of refugees to whom the Turkish government provides temporary living conditions, restraining the further flow of migrants to Europe. This powerful weapon of influence in the hands of Erdogan.
Losing Geopolitical Reason.
Turkey, although it received a serious reason for concern about the possibility of its own economy, but does not lose geopolitical positions in the region. First of all, aggressive US actions can push Erdogan to the next rapprochement with Russia and Iran. And given that now Turkey is one of the
NATO’s most powerful military allies, such maneuvers may have an impact on the fate of the North Atlantic alliance. The US threatened Turkey with new sanctions US Finance Minister Stephen Mnuchin said the US would impose additional sanctions if Turkey does not release US pastor Andrew Brunson. The escalation of relations between Trump and Erdogan can lead even to loud statements about Turkey’s withdrawal from NATO. By the way, Donald Trump several times publicly hinted that Turkey could pay more contributions to the Alliance budget. If Erdogan resorts to courageous steps, such a situation will play for the hands of Russia first of all. First, the Kremlin can get a new powerful ally in the Middle East and the Mediterranean. Secondly, such a situation will further clamp Ukraine in the grip of contradictions between the United States and Russia. On the other hand, one of the main lessons Ukraine must take in the situation with Turkey is any dictatorship that leads to a gradual deterioration of the state’s economic state. After all, to strengthen their power, one must constantly look for internal and external enemies. But common sense in important issues for the country is lost. This is what is happening now with Turkey: however Erdogan would call on compatriots to unite in opposition to the new “enemy” – the United States, economic realities will still win. Turkey found itself in a difficult situation of choice – to stay on the path of dictatorship or still continue the path to prosperity and development.