Turkish compromise will not repair all the damage

Turkey’s president Recep Tayyip Erdogan stepped back on Monday from his threat to expel 10 western ambassadors who had called for the release of the businessman and activist Osman Kavala — avoiding what would have been his biggest clash with western allies since he came to power. The compromise is welcome. Yet the damage already done to ties with key partners, and the credibility of Turkey’s economic governance, will not be quickly repaired. The episode highlights, too, the alarming degree to which Turkish policy now hangs on the whim of an ever more authoritarian — and erratic — leader.

Those seeking to give Erdogan some benefit of the doubt suggest his rage against the diplomats was designed to distract from the economic meltdown his idiosyncratic policies are causing. It may also have been designed to rally patriotic support as the president languishes in opinion polls ahead of presidential and parliamentary elections that must be held by June 2023. Like his fellow strongman in Hungary, Viktor Orban, Erdogan is facing a joint attempt by an alliance of opposition parties to dispatch him from office.

The altercation also surely highlights the depth of the Turkish president’s personal loathing for Kavala, who Erdogan believes financed and encouraged the “Gezi Park” protests in 2013 and who he has accused of being involved in the attempted coup of 2016. Erdogan appeared to feel the risk of a backlash over the expulsion of 10 allied ambassadors was one worth taking in order to make his feelings clear.

Even after Monday’s compromise, however, the affair is likely to widen the wedge between Turkey and Nato allies, and increase Erdogan’s reliance on Russia’s Vladimir Putin. It will complicate Ankara’s efforts to acquire 40 newer US F16 fighter jets — and kits to modernise almost 80 of its existing F16s — after Turkey was barred from receiving an order of next-generation F35s following Erdogan’s purchase of a Russian air defence system. Ankara is already under mounting US pressure after a US appeals court on Friday rejected a bid by the state lender Halkbank to dismiss a case accusing it of assisting Iran in evading US sanctions.

While the lira bounced back from earlier lows, moreover, the impression of a wayward president increasingly surrounded by yes-men has further dented investor confidence. A hefty current account deficit and Turkish banks’ and companies’ sizeable stock of short-term external debt make the country one of those deemed most vulnerable to a tightening of US monetary policy. Flows of tourists, who provide foreign exchange earnings, are still stymied by pandemic restrictions, and Turkey is dependent on ever more expensive gas imports for energy.

Erdogan’s behaviour has rattled investors, already deterred by his meddling in the central bank, who could finance the difference. That increases the danger of the long-foreseen balance of payments crisis finally erupting.

Turkey’s western partners were wise to seek to calm the dispute by declaring their compliance with Article 41 of the Vienna Convention, which includes a duty for diplomats not to interfere in the internal affairs of host states. Erdogan craved a clash enabling him to blame the country’s woes on supposed foreign ill-wishers. But while respecting their commitments, US and European capitals should continue to press for the release of Kavala — against whom the charges are flimsy — and for respect for rule of law. The further Erdogan departs from that, the deeper he will lead Turkey into an economic and political black hole.

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