Berlin, Germany. After the recent Turkish referendum, Germans are awakening to deep concerns about the direction Erdogan is going.
German economists and trade associations warn that the Turkish referendum, which strengthens the hand of President Recep Tayyip Erdogan will only make the country’s economy more unstable in the future, despite the government’s promises of growth.
With a narrow passage of the referendum a new insecurity has plagued the Turkish economy since the failed putsch attempt and resulting mass arrests.
While Mr. Erdogan views the passage of the referendum as a tool which will allow him to single-handedly ignite a lagging economy, it looks like economic uncertainty has already become entrenched in Turkey. According to recent reports from the public Turkish Statistical Institute, unemployment reached 13 percent in January, the highest rate in seven years. At 11.3 percent, inflation hit its highest mark in a year in March.
German trading partners, too, have sensed the insecurity: the Association of German Chambers of Commerce and Industry calculates exports to Turkey fell by 5.7 percent during the second half of 2016.
The Federation of German Industries said Turkey is currently Germany’s fifteenth most important export target, and many German companies had hoped to target the country’s growing population but this is proving tricky.
Economists and trade associations are not counting on any further developments in negotiations about Turkey formally joining the EU. Instead, they all point to an important opportunity to modernize the customs union agreed upon by Turkey and the EU in 2015.
The economic connections between Turkey and the EU have been largely overshadowed by Mr. Erdogan’s plans to reintroduce the death penalty. For the EU, that is “the reddest of all lines,” warned Margaritis Schinas, the European Commission’s chief spokesperson. It does look as if Erdogan’s future with his “German partners” is shaky at best.