Recep Tayyip Erdogan doesn’t want to know anything about sanctions against Russia, on the contrary. “Our door is open to everyone,” said the Turkish president after his meeting with Kremlin chief Vladimir Putin in Sochi, Russia. There he promised Putin that in future he would pay part of Russia’s energy supplies to Turkey in rubles. Putin promised investments that Erdogan urgently needs before the next elections because of the economic crisis in Turkey. Western governments fear that Turkey could break the blockade of sanctions against Russia.
Erdogan agreed with Putin on closer cooperation from the energy sector to finance. The Turkish leadership expects this to provide impetus to get the Turkish economy moving again ahead of the parliamentary and presidential elections in June. If Turkey pays for part of the gas imports from Russia in rubles, that will benefit both sides, Erdogan told Turkish journalists on the return flight from Sochi.
For Turkey, the planned ruble transfer has the advantage that it could conserve its dwindling dollar reserves. The Turkish central bank has spent billions in recent months to support the Turkish lira. According to the economic expert Murat Kubilay, the Turkish economy will need at least 220 billion dollars in the next twelve months to offset trade deficits and service loans. However, Turkey is currently receiving hardly any capital from abroad, wrote Kubilay in an analysis for the Middle East Institute in Washington. Now Erdogan is apparently hoping for help from Russia.
Shortly before the Sochi meeting, Moscow transferred five billion dollars to Turkey to pay part of the $20 billion cost of building Turkey’s first nuclear power plant. According to media reports, the financing is running on Russian banks that are subject to Western sanctions. The Washington Post reported that Russia wants to use Turkey as a location for investments in the energy and banking sectors in order to circumvent sanctions.
Turkey is dependent on Russian oil and gas supplies for energy policy and on Russian vacationers for the tourism industry. According to Erdogan, Russian tourists will soon be able to pay with a Russian bank card in Turkey. It is intended to replace western credit cards, which are no longer valid in Russia. Erdogan and Putin are aiming to increase the bilateral trade volume from the current $17 billion to $100 billion a year.
It is unlikely that Turkey can save its economy through closer cooperation with Russia. Russia exports much more to Turkey than the other way around. In addition, the Turkish economy is geared towards western partners: Turkey’s trade volume with Germany is twice as high as that with Russia.
Turkey also risks being hit by Western sanctions itself if it allows increased Russian investment. The Financial Times quoted an EU official as saying that Turkey was increasingly becoming a platform for trade with Russia. The US Treasury Department had already warned the Turkish government in June not to allow illegal Russian money transfers.
Western politicians are suspicious of the close cooperation between NATO member Turkey and Russia. The Turkish government denies the accusation of turning away from the West and points to its successes as a mediator in the Ukraine conflict, such as most recently with the Istanbul Grain Agreement. The doubts in the West about Turkey’s course should not be allayed with this. At Putin’s request, Erdogan wants to attend a meeting of the “Shanghai Cooperation Organization” in Uzbekistan in September, an association of Asian states led by Russia and China.
Despite his good relationship with Putin, Erdogan was unable to achieve anything in foreign policy in Sochi. He failed in an attempt to persuade the Russian President to sign a ceasefire in Ukraine and agree to a new Turkish invasion of Syria. Nevertheless, Erdogan praised the attitude of the Russian head of state as “fair”. At the same time, he criticized Federal Foreign Minister Annalena Baerbock and the French department head Catherine Colonna, who had sided with Athens in the dispute between Turkey and Greece over islands in the Aegean Sea. Germany and France allowed themselves to be exploited by Greek propaganda, said Erdogan.