The threatened expulsion of ten Western diplomats from Turkey has caused the local currency, the lira, to plummet to a record low. Early Monday morning, 9.80 lira were charged for one dollar, then the rate recovered slightly and stood at 9.73 lira. The Turkish currency has already fallen by 24 percent against the dollar since the beginning of the year. The lira also fell sharply against the euro.
The Turkish currency is under severe pressure; It fell only last week after the Turkish central bank cut the key interest rate significantly despite high inflation. The analyst Timothy Ash of Bluebay Asset Management said on Monday that the threatened expulsion of the diplomats would harm Erdogan. The ten countries could withdraw deals with the Erdogan government and reduce their investment activity.
The Turkish head of state Recep Tayyip Erdogan has refrained from threatening to expel Western diplomats. The ambassadors had “withdrawn” and “will be more careful in the future,” said Erdogan on Monday evening. The US embassy and other embassies concerned had previously published a statement on Twitter that they would comply with the Vienna Convention not to interfere in the internal affairs of the host country. The German embassy shared the statement on Twitter. “Our intention was not to cause a crisis,” said Erdogan in the evening. It was only a matter of protecting Turkey’s sovereignty.
The reason for the current conflict is the case of the cultural promoter Osman Kavala, who has been imprisoned since 2017. The 64-year-old has long been a red rag for Erdogan. The philanthropist comes from a rich family of entrepreneurs. It finances civil society projects that advocate minorities and cultural understanding and also works with Europe. For Erdogan, Kavala is part of a foreign conspiracy aimed at overthrowing him. Kavala has had to remain in custody for years on account of ever new allegations. He is accused of attempting a coup as well as political and military espionage.
With their written declaration last week, the ambassadors insist on compliance with a ruling by the European Court of Human Rights. He had already demanded Kavala’s release in 2019, but Turkey is not implementing the judgment. In the West, the partners are puzzling why Erdogan is not being more conciliatory and giving in. But Erdogan has reasons for his poker. However, they are not a sign of strength, but rather based on a fundamental weakness.
The decline of the lira is Erdogan’s main problem
Erdogan sees himself as the protector of Muslims all over the world. This concept is a militant advancement of the global approach to a common Islamic identity that Erdogan tried many years ago with his then spiritual mentor, the preacher Fethullah Gülen: The Gülen movement established schools, kindergartens and educational institutions all over the world, above all in Central Asia and Africa, but also in Germany and other European countries. Gülen, who lives in Pennsylvania, and Erdogan clashed a few years ago.
Erdogan suspects Gülen of being a CIA man. Gülen’s supporters, the “Feto” terrorists, were behind the failed coup, which Erdogan still sees as a hidden operation by the West. Despite all the repression, Erdogan cannot be sure of his power: the Gülen people have infiltrated the entire state apparatus – and Erdogan knows that because he was part of this movement in the beginning. Therefore Erdogan only wants to release people he assigns to the Gülen environment in the form of a counter-deal. The EU cannot offer him that. Erdogan sees the European Court of Human Rights more as an expression of decadence in the West: During his time in Gülen, Erdogan had blatantly said that he wanted an Islamic society. Preacher Gülen had said several times that Islam is above the Western legal system.
Erdogan’s main problem, however, is the decline in the lira. Prices are rising, inflation is racing, people’s discontent is growing. The economic situation is exacerbated by the high costs of the war: Erdogan invaded Syria in an illegal invasion and is now having to go to great lengths to finance the troops. In keeping with Gülen’s globalism, Erdogan also supports other Muslim expansion efforts. His people are fighting on the side of Azerbaijan, he supports the Rohingya in China and is still involved in many places in Africa.
Erdogan is trying to stabilize the financial situation through two sources of income: Turkey wants to produce natural gas in the Mediterranean and is risking the open conflict with France, Greece, Cyprus and the EU. At the same time, Erdogan has recognized that the EU is dependent on him when it comes to the issue of migrants: According to his own statements, he keeps around two million refugees in Turkey so that the EU does not have to take them in. Turkey is providing considerable humanitarian aid here, but it is not unselfish: Those refugees who integrate are integrated into the Turkish labor market. The others are a bargaining chip for Turkey: The EU must conclude a new agreement in the coming weeks. This will bring in further billions for Erdogan.
For the EU, there is no alternative to the refugee deal with Erdogan that German Chancellor Angela Merkel has engineered. Because the opening of the borders would be a disaster for the EU: It is not prepared for another influx of migrants, on the contrary: The rejection has increased in recent years. The fear of strangers without a vaccination certificate associated with the pandemic is likely to have further clouded the mood against migrants.
Erdogan should also see the Kavala case against this background: He wants a new deal and knows that the EU needs one as well. The money from Brussels will not completely ease the economic situation. In any case, it represents a relief, and Erdogan is likely to rely on it.