Economic ties between Turkey-Germany reset

Turkish President Tayyip Erdogan. © All rights reserved

Economic ties between Turkey and German could potentially see an upswing. On the eve of talks between German Chancellor Angela Merkel and Turkish President Tayyip Erdogan, Merkel said, while Germany wants to boost economic ties with Turkey, issues related to German prisoners in Turkey and human rights could be potential hurdles.

Relations between the two countries have taken a hit in recent months. With Turkey’s economy witnessing a crisis, Erdogan aims to rebuild trade ties with one of the European Union’s strongest economy.

While Merkel has ruled out direct economic ties with Ankara for now, she nonetheless was open to the possibility of expanding economic relations between the two countries.

“But we have to work together economically, and we’ll certainly manage to get some agreements here,” said Merkel, without elaborating while adding, “The human rights situation is not how I’d like to see it”.

Erdogan wants Berlin to designate the group headed by Muslim cleric Fethullah Gulen he blames for a 2016 attempted coup as a terrorist organization. Germany said, it will need more evidence to do so. The Gulen issue is a hurdle that needs to be crossed before economic ties between the two nations expand.

Economic volatility

Highlighting the need for stronger economic ties was junior foreign minister Michael Roth.

“There can’t be another country outside the European Union with whom relations are so important and yet so difficult,” said Roth.

Although both sides have dismissed the notion that Turkey could request financial assistance from Germany or the EU, a rapprochement in economic ties however could unlock investments from German manufacturers who have so far been deterred by the volatility in Turkey’s forex market.

The Gulen issue is only one of several factors dividing Germany and Turkey. During his visit to Berlin, Erdogan was whisked away to his hotel midst allegations that exiled Turkish dissidents were being spied on. For Ankara, Germany’s refusal to extradite military officers accused of participating in the attempted coup, is an open wound. As for Germany, Berlin is concerned regarding the fate of dozens of German citizens who were imprisoned in the crackdown subsequent to the coup.

Economic ties between the two countries have become complex. Germany is home to more than three million ethnic Turks and is reliant on Turkey’s help to contain a Syrian migrant crisis beyond Europe’s borders. As for Turkey, it needs to improve trade ties with Germany to tide over its economic crisis. In order to move ahead, clearly both sides need to set aside their differences.

“We are pursuing the goal of increasing our trade and economic ties,” wrote Erdogan in Frankfurter Allgemeine. “For the sake of prosperity and the future of both our countries, let us increase our mutual interests and reduce our problems.”

“This visit isn’t a sign of normalization [of economic ties],” said German President Frank-Walter Steinmeier. “But it could be the start of it. After the trauma of the 2016 coup attempt, we expect a return to the rule of law.”

Following years of breakneck growth, Turkey’s economy is being weighed down by foreign debt and with the lira depreciating by more than 40% this year. Its economic condition has worsened due to sanctions imposed by U.S. President Donald Trump following Ankara’s detention of a U.S. pastor.