Erdoğan looks west as Turkish economy stutters

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Turkey’s Recep Tayyip Erdoğan has berated Sweden for harbouring “scoundrels and terrorists”. He has called its government “evil” for allowing a Koran to be burned on the streets of Stockholm. The Turkish president at one point even told Sweden “not to bother” with its Nato application.

Then, at a summit in Lithuania on Monday, Erdoğan said yes. To a peal of applause, he endorsed Sweden’s membership of the military alliance, praised the negotiating skills of its prime minister, Ulf Kristersson, and in effect pledged to defend Sweden’s borders like Turkey’s own.

Erdoğan’s dexterous political manoeuvre was greeted with relief across the alliance and marked the latest in a series of decisions that have “de-escalated” tensions between Ankara and the west. “We’re entering a new era of Turkey-western relations,” said Murat Yeşiltaş, director of foreign policy studies at Seta, a Turkish think-tank with close links to Erdoğan and his government.

Yet deep scepticism lingers over whether Erdoğan sees this as part of a broader foreign policy shift, or simply as a political transaction in Ankara’s immediate interest. Turkey’s change of tone comes as it is desperate to lure back foreign investors who have fled during a years-long economic crisis.

Turkey’s current account deficit reached $37.7bn in the first five months of 2023, a record level. Erdoğan’s government is hoping international inflows will help finance the yawning gap.

While Russia and Gulf countries have provided financial support over recent years, Erdoğan’s newly appointed economic team is also hoping to secure investments from the US and Europe. “Foreign policy is directly influenced by economic relations. So if the west and Turkey can open a new page, the economy will be the number one topic,” Yeşiltaş said, adding that Erdoğan was recalibrating his foreign policy after winning May’s elections.

Relations with the west had soured badly since Erdoğan first came to power in 2002, with US and European leaders increasingly worried about the Turkish president’s slide towards autocracy. Turkey’s decision to deepen its economic ties with Moscow after Russian president Vladimir Putin’s full-scale invasion of Ukraine last year has also rankled Turkey’s western partners. Erdoğan earlier this year said Turkey was closer to Putin than Washington.

The effort to convince Erdoğan to back Sweden’s Nato bid has taken months of painstaking diplomacy. After Turkey demanded a crackdown on Kurdish militant groups, Sweden agreed this week to establish a “road map” for its battle against terrorism, a fresh concession after Sweden earlier this year passed new anti-terrorism legislation.

Parallel discussions were also held with US president Joe Biden over Turkey’s plans to complete a multibillion-dollar deal to buy F-16 fighter jets, which has been held up in Congress. Jake Sullivan, US national security adviser, on Tuesday said Biden was “interested in getting these F-16s to Turkey”, placed “no caveats and conditions” on the transfer and would work with Congress to secure approval.

Talks were also held with Brussels over closer EU-Turkey relations. Charles Michel, the European Council president, told Erdoğan that agreeing to Sweden’s accession was crucial. “If you move now, you have an opportunity to create a good atmosphere among people who want to help you,” Michel told him.

One senior EU official said the breakthrough over Sweden would “open space for work in a multitude of areas”, adding that “for Erdoğan, it is all about the economy”. Turkey has long sought an upgrade to Turkey’s customs union with the EU, visa liberalisation and extensions of its multibillion-euro migration deal with the bloc; Erdoğan raised all these topics in his meeting.

Besides Erdoğan’s rapid turnround on Sweden’s Nato bid, there have also been other nascent signs that Turkey is seeking a more constructive approach with the US and Europe. When Ukrainian president Volodymyr Zelenskyy visited Turkey last week, he was allowed to leave with a group of Ukrainian soldiers who were transferred to Istanbul under a prisoner swap deal with Moscow — much to the annoyance of the Kremlin. Erdoğan also voiced strong support for Ukraine’s ambitions to join Nato.

Selim Koru, an analyst at the Ankara-based Tepav think-tank, said Erdoğan-aligned television stations also “disparaged” Moscow as they reported last month on Yevgeny Prigozhin’s coup attempt, potentially in an indication that “the Erdoğan palace in general is disenchanted with the Russians a little bit”.

Still, many analysts see Turkey’s efforts to revitalise relations with the west as more of a tactical move: “I don’t buy into the western pivot,” said Wolfango Piccoli at consultancy Teneo. “At best now we can hope for a better relationship than the past five years . . . [but] the relationship remains largely transactional.”

Ankara is expected to retain its warm relations with Russia because of Turkey’s reliance on oil and gas imports and because Moscow is an important actor in Syria, which is also a strategic priority for the Erdoğan administration.

Any foreign policy moves also need to be seen through the prism of Erdoğan’s wider push to carve Turkey into a more influential player on the regional and global stage, analysts said.

“Ankara’s priority is maintaining its balancing act to expand its manoeuvring room and leverage as a regional power and global actor,” said Emre Peker at Eurasia Group. “Erdogan’s Nato moves and overtures to the EU are tactical, and in line with Turkey’s broader geopolitical ambitions — not a pivot, and certainly not a U-turn.”