Turkey and Germany – Stable Economies, Stable Ties?
In recent months, Turkey has received a great deal of notice for its strong economy and ostensibly stable democracy, while social unrest and financial upheaval have rocked its neighbors on both sides. Heralded as a potential model for transitioning countries such as Egypt and Tunisia, democratic secularism has been the backbone of the Turkish Republic since its inception in 1923. It is only in recent years, however, that Turkey has begun receiving heightened attention for its combined democratic, capitalist, and secularist merits which make it a viable leader in the region and a recognizable force the world over. While Turkey has undergone its fair share of both social and economic turmoil in decades past, if one takes a quick glance at the state of affairs today, it is easy to see why there is so much buzz surrounding the so-called “Turkish Model.” Turkey bounded onto the world stage in the 21st century, rising quickly as a regional power while strengthening its relationships with neighbors to both the east and west as part of its so-called “zero problems with neighbors” policy. In June of this year the ruling Justice and Development Party (AKP) was ushered into its third term in office by a broad-reaching majority, with Prime Minister Erdoğan fully embracing his role as the man who has brought strength and prosperity to Turkey over the past decade.
Though negotiations for Turkish accession to the European Union have remained stalled since 2006, Erdoğan has maintained a close relationship with Europe, specifically with Chancellor Merkel of Turkey’s “privileged partner” nation Germany, while simultaneously making clear that he has other hands available to shake if the EU continues to hold Turkey at bay. The particular relationship Turkey has with Germany, however, holds greater weight than nearly any of its other international connections, both culturally and economically. This affiliation, while possible to trace back to Ottoman times, gained contemporary importance beginning in the 1960s when the first Turkish “guest workers” began arriving in what was then West Germany. Since that time, the relationship between the two nations has had its ups and downs, but its potency has moved along a steady upward trajectory as familial ties inevitably underscore the growing economic and political ones. While Chancellor Merkel and others within the ruling Christian Democratic Union (CDU) make comments concerning the failure of multicultural integration in Germany and hold an openly negative stance on Turkish EU membership, they continue to depend on the close yet carefully distanced relationship Germany has built with Turkey. Germany remains Turkey’s largest trading partner1, travel from Germany to Turkey continues to increase dramatically each year2, and Turkey’s expanded membership in the European Customs Union denotes the closest economic relationship between the EU and any non-member country3. These positive aspects of the Turkish-German relationship have been bolstered by the increased financial prosperity and stability witnessed in Turkey over the past decade, and help to create the framework for Turkey’s current role as a leader and potentially model nation in the region. The two key issues blocking Turkish accession generally cited by European leaders are the continued Turkish occupation of North Cyprus, and the remaining human rights and democracy issues inside Turkey. This past July all of the top military commanders in Turkey stepped down and were replaced by civilian officials appointed by Prime Minister Erdoğan. Though many on the Left fear this move as a potential consolidation of power by Erdoğan, it was heralded by many in Europe and elsewhere as a move towards full democracy, shifting the Turkish military away from its traditional role as the main check against government power, ready to enforce a coup whenever they see fit. This move brings Turkey one step closer to covering all of its bases in terms of readiness for the EU, whether or not such an action will ever become reality.
Yet, while the structure on which Turkey’s stability is balancing may be stronger than in the past, upon examining the rocky journey Turkey has taken to reach the place where it stands today, one can more easily understand the cracks in its national façade. After the military 1980 coup d’état, with out-migration still high and many fearful of what would become of the nation, neoliberal reform took hold in Turkey, increasing privatization and rapidly expanding the economy. There was little co-occurring fiscal stabilization, however, and a weak banking system quickly led to sharp inflation. Instability only intensified during a second wave of debt-led neoliberal reforms in the 1990s, and hefty domestic borrowing dependent on short-term capital led to further inflation and a major financial crisis in 1994, and an even greater crisis in 2000 – 2001. These crises were underscored and abetted by instability in government, as successive coalitions rose and fell − the most notable being toppled in what was dubbed the “postmodern coup” of 1997. This military-led ousting of Prime Minister Erbakan resulted in the dissolving of the Islamic-leaning ruling Welfare Party, from whose ashes the AKP would eventually rise. It was within this shaky economic and political atmosphere that Turkey signed the Customs Union agreement with EU in 1996, after the first major IMF bail-out of the 1990s had provided a semblance of short-term economic stability4. Neither IMF stabilization efforts nor the EU agreement did little to assist the Turkish economy in the long-run, however, as few significant changes had been made to debt-led internal borrowing tactics, and this combination of unstable factors plunged Turkey into the deep crisis of 2000 – 2001. While the economy was stabilized to some degree by the end of 2001, it was not until Erdoğan’s 2005 decision to lop six zeroes off the Turkish Lira, thereby creating a much smaller, stronger currency, that the economy truly began to grow in a meaningful way. Germany was one of Turkey’s strongest allies throughout this period, with EU accession talks beginning shortly after Erdoğan’s 2005 monetary reform took place. While the external influence of the Copenhagen Criteria was clear as Turkey underwent numerous reforms, it was the internal power of the AKP that seems to have been the main factor in pushing Turkey to where it is today.
By 2005, Erdoğan had garnered a broad base of support, rising from his position as the ousted leader of the Welfare Party and Mayor of Istanbul, jailed and banned from politics in 1997 after reciting an Islamic poem at a rally in the province of Siirt. His ascent back to power was rapid and impressive, and the reforms he has implemented since becoming Prime Minister in 2003 have been more powerful than any seen in decades. They are not universally embraced, however, as many of his opponents both in and outside Turkey fear that underneath his charismatic, populist façade lays a leader who is strategically building up power only to let go of Turkish democracy and become an Islamic autocrat. Such fears have not yet materialized, however, and Erdoğan has had an objectively positive impact on the country in many ways. Economically, Turkey has been on a steady upward trajectory for nearly a decade, with not a single bank failing during the crisis of 2008. Many directly credit Erdoğan and the AKP, citing the regulatory changes that helped create a steady economy as a major reason for the continued overwhelming support for his single-party rule. A continually growing economy is not always positive, however, and as the Turkish market continues to heat up, the chance of a bust after such a protracted boom are getting ever stronger. The country has been able to remain stable due to high domestic investment and private consumption – both of which are heavily dependent on foreign imports. The volatility of the European market, combined with the instability of the region, creates added pressure to an economy already veering towards overheating, prompting a need for careful maneuvering and potential concern. While Germany has been dealing with the continued crisis in the euro zone, Merkel cannot neglect Germany’s relationship with their “privileged partner” to the east. The Turkish economy, while running the risk of becoming overheated, would fare positively from broader foreign investment, and Germany would benefit from looking outside the EU in order to help maintain their position as an economic behemoth within the ever-more shaky Euro system. Though only 38% of Turks were interested in joining the EU as of 2010 (down from 73% in 2004)5, that number does not reveal disinterest in continued economic ties, instead reflecting the harsh rejection felt after European leaders openly rejected Turkey’s candidacy. Many in Turkey see that their country has fared well in recent years without membership in the faltering EU, and thus want to turn away from that region altogether. To do so, however, would lead to both economic and social jeopardy, likely plunging Turkey from its current noteworthy position in the region. While Turkish leaders are not realistically discussing a turn away from Europe, the attitude of “they need us more than we need them” is prevalent in Ankara, whether or not it is based in reality.
Turkey is a country where the political, social, and economic aspects are heavily and inextricably bound up with one another. As Erdoğan continues to build up his power, and the economy continues to grow, anxiety within civil society is palpable about what will come next. With Syria in a continued state of government-backed brutality, and the rest of the Middle East in varying conditions of political and social disarray, Turkey would be wise to continue to look west for prolonged stability, even without the potential of EU accession on the horizon. Likewise for Germany, as the euro zone remains in crisis and the German economy itself grows unstable, a positive connection to Turkey may prove more helpful down the line than most could have possibly anticipated in decades past. Furthermore, with uncertainty surrounding the nature of Erdoğan’s aspirations for maintaining political power, a strengthened tie to Germany and Europe at large could help encourage the Prime Minister to continue Turkey along the path towards full democracy, rather than swinging back in the direction of questionable secularism and autocratic authority, which would inevitably lead to Turkey’s fall from its current position of stability and regional prestige.
1Turkish Statistical Institute, Foreign Trade Statistics, July 2011, http://www.turkstat.gov.tr/PreTablo.do?tb_id=12&ust_id=4 (Aug. 14, 2011).
2Turkish Statistical Institute, Tourism Statistics II. Quarter 2011, http://www.turkstat.gov.tr/PreTablo.do?tb_id=51&ust_id=14 (Aug. 14, 2011).
3Republic of Turkey Ministry of Foreign Affairs, The Customs Union Between Turkey and the European Union, http://www.mfa.gov.tr/the-customs-union-between-turkey-and-the-european-union.en.mfa (Aug. 10, 2011)
4Önis, Ziya, “Varieties and Crises of Neoliberal Globalisation: Argentina, Turkey, and the IMF,” Third World Quarterly 27.2 (2006): 239 – 263.
5“A Fading European Dream: Will Turkey Ever Join the EU?” The Economist, Oct. 21, 2010 (http://www.economist.com/node/17276372)