Turkey is in the middle of a major political row with Germany. In the wake of the attempted coup d’tat last year, Turkish President Erdogan wants to change its constitution to give the President more power. And because the likely vote will be close and so many Turks live in Germany and the Netherlands, Erdogan’s allies want to campaign in those countries.
Germany and the Netherlands have both said foreign political campaigns are not welcome in their countries. In turn, Turkish President Erdogan has compared the German moves to prevent campaigning to Nazi measures and questioned how democratic the country truly is. This is a major break not just with political diplomacy but in relations with Germany.
Erdogan is still smarting over the lack of support he believes he has received from his western allies. If he loses this referendum or is forced to withdraw it, he may lash out. And so, to the degree Erdogan turns away from the EU, Nato and the US, Russia is always waiting with open arms.
Why this matters: Earlier in the year, I wrote that Turkey is the country to watch in 2017. Arguably, it is the western country whose democracy is most at risk right now and the economy is suffering along with that risk. Inflation is running at 10.1%. Unemployment is 12.1%. And the Turkish Lira continues to suffer, losing 4.2% since 23 Feb, two weeks ago. Not only is Germany one of Turkey’s closest allies, it is also its largest export market, taking in 9.8% of all exports. And German tourists are the source of a huge amount of tourism revenue for Turkey.
If the Turkish economy suffers, it could have knock-on effects in the emerging markets in terms of contagion. The political stakes are arguably higher, both in terms of the balance of power in the Middle East as well as regarding the so-called war on terror.