Trouble in Paradise? New Disputes Cloud Russia-Turkey Relations

Following his hard-fought victory in the May presidential election, Turkey’s long-standing leader Recep Tayyip Erdogan has been gradually shifting toward the West. While Moscow reacted calmly to Ankara’s willingness to approve Sweden’s NATO accession, Turkey’s transfer of five Ukrainian commanders who had been captured by Russian forces back to Kyiv and Erdogan’s remarks in support of Ukraine’s entry into NATO have sparked outrage. 

Moscow is currently not in a position to allow a deterioration of relations with Turkey, and it is also important for Erdogan to avoid that in order to continue benefiting from mediating between Moscow and the West. His turn toward the West is also driven by internal factors, such as a severe economic crisis that necessitates colossal investments only the West can provide.

Erdogan’s entire pre-election program was built on diverting the attention of Turkish voters from the troubled economy, especially from the fivefold depreciation of the lira against the dollar in recent years and enormous inflation, which reached 85 percent in annual terms last November.

Grandstanding over Turkish military achievements and uncompromising rhetoric toward the West were designed to demonstrate Turkey’s increased international influence. That way, Erdogan could limit his references to socio-economic problems, explaining that “Turkey is forging its own path.”

Immediately after the elections, however, the Turks had to face reality. The Turkish lira continued to rapidly decline against the dollar, dropping by nearly 30 percent within a month from election day. Consumer prices in June increased by 38 percent from the previous June.

All of this prompted Erdogan to utilize his reelection to abandon the policy of artificially low interest rates and embark on a path of economic liberalization. Following new appointments, the Turkish central bank hiked the interest rate for the first time in twenty-seven months—from 8.5 percent to 15 percent.

That alone is not enough for a comprehensive stabilization of the Turkish economy, which heavily relies on foreign investments. Turkey is in dire need of an influx of foreign capital, and the largest investors in its economy continue to be Western countries, primarily the Netherlands, the United States, and the United Kingdom, which together account for about 30 percent.

Moreover, a significant portion of Turkish exports goes to the West. Even after record growth in trade with Moscow, Russia still only accounts for 3.7 percent of Turkey’s exports, trailing far behind its Western counterparts. 

In these circumstances, Erdogan recognized the need to pivot toward the West for the sake of economic stabilization. Yet severing ties with Russia, which last year became Turkey’s top importer, is not an option.

In addition to the economic problems, Erdogan must also deal with municipal elections scheduled for March next year. To regain control over major cities such as Ankara and Istanbul from the opposition, he needs to attract pro-Western urban voters to his side.

Notably, after the elections, Erdogan revisited the topic of Turkey’s integration into the European Union, and even demanded an open path into the EU in exchange for Turkish approval of Sweden’s NATO membership.

Discussions about European integration primarily serve as posturing for Erdogan to attract Western investment and gain domestic support in pro-western cities ahead of the municipal elections. It is unlikely, therefore, that this topic will become another problem for Turkey-Russia relations.

Nor are there grounds to expect tension between Moscow and Ankara due to Turkey’s approval of Sweden’s NATO membership. Turkish objections had long been the sticking point in Sweden’s accession, but the issue was in fact fundamentally resolved at the previous year’s NATO summit in Madrid, where Turkey, Sweden, and Finland signed the corresponding memorandum.

Erdogan was merely buying time due to the presidential elections, during which he played on anti-Western sentiment. Now that he has been reelected, Erdogan’s hands are untied, and he can officially announce his consent, especially as the United States sweetened the deal by agreeing to supply Turkey with F-16 fighter jets.

Turkey’s approval of the Swedish accession did not come as a surprise to the Kremlin, as confirmed by Kremlin spokesman Dmitry Peskov. “Turkey is committed to its obligations. This has never been a secret for us, and we have never looked at it through rose-colored glasses,” he said.

More painful for Moscow was Turkey’s decision to transfer five captured commanders of Ukraine’s Azov Battalion back to Ukraine during Ukrainian President Volodymyr Zelensky’s recent visit to Istanbul. The five commanders had been captured by the Kremlin’s forces and transferred to Turkey with assurances that they would not return to Ukraine until the war ends. 

In the Kremlin, Ankara’s decision was seen as a “violation of the existing agreement.” According to Erdogan, however, upon learning of Turkey’s decision, “Russia was initially upset, but then, after receiving some details … the situation turned positive.”

This episode once again demonstrates how much Russian-Turkish relations depend on the personal relationship between Russian President Vladimir Putin and Erdogan. Contacts between the two countries are often informal, and the agreement regarding Azov was likely one of those—non-binding—and Erdogan took advantage of this.

That’s not to say that the incident was entirely without consequences. The transfer of the Azov commanders, coupled with Turkey’s public support for Ukraine’s NATO membership, elicited sharp statements from Moscow, but Russia has not gone beyond verbal criticism for now.

By shifting toward Kyiv, the Turkish president is essentially testing Moscow’s new red lines. How strongly is Russia willing to react in a situation when it is simultaneously fending off a Ukrainian counteroffensive and recovering from the uprising by the Wagner mercenaries?

The transfer of the Azov commanders to Ukraine also looked like an attempt to pressure Moscow for an extension of the grain deal, which expired on July 17. The deal, brokered by Turkey, allowed for Ukrainian grain ships to leave Odesa ports unhindered. Currently, the Russian leadership is refusing to extend it, but given how transactional Russia-Turkey relations have become, the two countries may still come up with an alternative arrangement..  

Either way, the cautious reaction from the Kremlin showed that Russia is currently not in a position to escalate tensions with Turkey, which remains the only real mediator in Moscow’s relations with the West and Kyiv, as well as one of its key economic partners.  

Nor has Erdogan forgotten the support he received from Moscow during his electoral campaign (Moscow granted Ankara a $20 billion gas payment deferral, for example), their close economic ties, or the ability to exert pressure on NATO partners with Russia’s help. Accordingly, the two countries will continue to perform this delicate balancing act, avoiding serious escalations.

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