Europe Inside Out

How 2023 Could Transform Turkey

Episode Summary

Sinan Ülgen and Marc Pierini assess the state of Turkish politics and economics and discuss the implications of political change ahead of the country’s elections.

Episode Notes

Turkey will hold presidential and parliamentary elections later this year, the results of which will have significant repercussions for the country’s economic and foreign policies.  

Sinan Ülgen and Marc Pierini, senior fellows at Carnegie Europe, analyze the current state of affairs in Turkey and lay out the implications of new leadership in Ankara for Europe and the world.

Marc Pierini (November 17, 2022), Understanding Turkey’s Geostrategic Posture, Carnegie Europe.

Marc Pierini and Sinan Ülgen (May 19, 2022), Two Turkey Experts on Why Erdoğan Is Rejecting NATO Expansion, Carnegie Europe.

Marc Pierini, (August 30, 2022), Understanding the Erdoğan-Putin Duet, Carnegie Europe.

Alper Coşkun and Sinan Ülgen (November 14, 2022), Political Change and Turkey’s Foreign Policy, Carnegie Endowment for International Peace.

Episode Transcription

Sinan Ülgen

Elections and the turbulent state of Turkey's economy will be at the forefront of citizens' minds as they head to the polls to vote for a new president and a new parliamentary majority later this year.

The outcome of these twin elections will have tremendous consequences, not only for the country's internal workings but also for Turkish foreign policy. So what are the drivers of public sentiment in Turkey ahead of the elections? How is this being perceived in Europe? And what might Turkey's future look like under a new leader?



Sinan Ülgen

Hello and welcome to Europe Inside Out, a monthly podcast from Carnegie Europe about the continent's greatest foreign policy challenges.

My name is Sinan Ülgen and I'm a senior fellow at Carnegie Europe.

This episode of Europe Inside Out is about Turkey and the presidential and parliamentary elections that are anticipated later this year.

I'm joined by Marc Pierini, a senior fellow at Carnegie Europe, whose research focuses on developments in the Middle East and Turkey from a European perspective. Marc is a former EU diplomat, who was the EU ambassador and head of delegation to Turkey from 2006 to 2011 when I first met him. So, Marc, welcome.


Marc Pierini

Happy to be with you.

Sinan Ülgen

I'd like to start this conversation by unpacking what is happening inside Turkey. Let's start with the political situation on the ground, as well as Turkish public opinion. Marc, how is all this being perceived where you sit in Brussels?


Marc Pierini

Well, first of all, a caveat. What I'm witnessing here are the perceptions of EU citizens, of NATO and of course, the perceptions in the main European capitals. Of course, both elections, are for Turkish voters. But given the importance and the depth of the relationship between the EU and Turkey, perceptions in Europe are important.

What I see, what I witness, is a very deep disapproval of Turkey's leadership choices on rule of law and fundamental rights, and also some irritation at many of the foreign policy moves we have seen in the past few years. This, of course, is understood in the EU as being linked to political goals of the current leadership. At the same time, we hear increasingly that the Turkish opposition is united on restoring rule of law if they win the election. But in fact, there are really three emblematic cases Osman Kavala in jail, a philanthropist in jail, Selah Demirtaş,  Kurdish leader in jail, and now the mayor of Istanbul, Ekrem İmamoğlu being deprived of his rights to run the municipality and possibly run for president.

There are other worries, obviously. The closure case of the Kurdish Party, HDP harassment of a number of Social Democrat politicians. The changes are in the electoral law coming into force on April 6, and they are geared at favoring the current ruling alliance and all sorts of the usual conspiracy theories. Candidates being labelled US driven candidate, EU driven candidate. All of this sounds very strange seen from Brussels.


Sinan Ülgen

Yes, Marc, I think indeed there is a lot of stake in these elections, and it's important to understand how this electoral cycle and its potential impact and consequences are viewed in the main partners of Turkey, in the West, in the EU capitals and NATO capitals.

But perhaps bringing the discussion closer to home, it might be worthwhile if I add a few elements, since I follow these dynamics while being based in Turkey. My first point would be to say that it is still too premature to really pontificate about the outcome of these elections given that one critical threshold is yet to be reached and that is namely the opposition coming together and nominating a joint candidate. There the name of Kemal Kılıçdaroğlu as leader of the main opposition, CHP, is in the lead but so far there has not been a consensus around his name and the reason is that again, according to the polls, he seems to be one of the weaker candidates that the opposition has. The stronger ones being the two mayors, the mayor of Istanbul, Ekrem İmamoğlu, as you mentioned, Marc, and the mayor of Ankara, Mansur Yavaş, who actually, even in the latest polls that have come out in December, enjoy a double digit margin compared to Erdoğan. So against them, Erdoğan polls at less than 40% and both of them poll around or slightly more than 50% and that's obviously quite a gap.

However, within the Table of Six, which is the coalition that the six parties of the opposition have formed, the name of Kılıçdaroğlu  is the lead name. As the main leader of the opposition CHP, he wants to be the candidate and he's been the one that has been the main architect of this alliance structure on the side of the opposition. And I think that we will need to wait until at most the end of this month to really see which name the Table of Six will nominate. But the more they wait, the more they lose momentum and this has been something that we've seen in the polls in the last few months where support for AK party and Erdoğan has rebounded. One of the major reasons for that rebound is in addition to the different initiatives of the government that we'll perhaps talk about a bit more in detail later on, it's the fact that the Table of Six has not been able to come around a common name and really take some strong form of political initiative. So that might change by the end of the month and we shall ultimately see who the common candidate shall be.

Having said that. Despite this rebound in the polls, the main vulnerability on the side of the government remains the economy. As a result of misplaced economic policymaking, Turkey has ended up with high end chronic inflation. The year end figure was 64% and this high inflation has essentially undermined the standard of living and the purchasing power of the Turkish middle class, as a result of which the government introduced a range of measures to boost wages and incomes. These range from a significant hike in the minimum wage to early retirement rules. And this is likely to have an impact politically, but only in the short run because if you don't really combat inflation per se, even these measures which have boosted wages and incomes will tend to lose their impact over time.

And that is why today we have a discussion in Turkey about the date of elections. The nominal date of elections is mid June. But the government wants to have anticipated elections so that some of these measures which were put into place still have their impact on the ground. But in return, the opposition does not want really early elections. So the only way that Turkey could end up with early elections under these circumstances would be for the president himself, for Erdoğan to essentially declare early elections. He can do that according to the constitution, but again according to the constitution if he does that, then the opposition will claim that he cannot run as a candidate anymore because he's already had his two terms as the president of the Turkish Republic. This is going to create a legal challenge for him. And ultimately, the high electoral board may decide that Erdoğan could still run. However, it would be more difficult in terms of the questions about the legitimacy that this could entail.

Marc Pierini

I'd like to make an additional comment on the rule of law aspect before turning to the economy. To put it in a very blunt way, if today the European Council was to decide whether or not to grant negotiating status to Turkey as it did unanimously in December 2004, well, the answer will be simply no negotiating status because Turkey has moved so far away from European norms and standards that it would be clearly impossible. But at the same time, you can argue that we see a sort of muted reaction right now from European countries, and in many ways a wait and see attitude until the election, simply because Turkey is currently benefiting in a way from the Russian invasion of Ukraine. That is, nobody in Europe would want to see Turkey estrange itself more than it has already done from NATO in the face of the Russian invasion. So while you have, of course, nuances between member states, united in diversity, of course, as always. But the main attitude is let's wait and see what the elections will produce. Now, there's no doubt that especially with the change in the electoral law and the whole debate that you just mentioned on the date of the election, we can see that there's a lot of tactics being involved in just organizing the election.

Now, turning to... to the economy, well, no surprise, the absurd interest rate policy that we see at work is negatively assessed by European financial circles. Essentially, they see that as killing a very promising economy in practice. The fear is essentially within the business circles in Europe that putting money in Turkey, investments, foreign direct investment in the terminology, at this point is rather risky. And there's also a worry about the viability of the European assets in Turkey if the policy was not fixed very quickly. And then the next issue is, of course that we are seeing right now a lot of what economists call helicopter money raining down for electoral reasons in Turkey. As you mentioned, it's not clear that this is sustainable. It's not clear that it will last very long because essentially the inflation is so high, even with the official numbers, which are about half the unofficial numbers, because essentially the policy is running behind inflation.

The other comment I get on all of this is that this economic policy is essentially driven by autocracy. That is, the leadership doesn't listen to experts anymore, doesn't listen to its own business sector, certainly very little to Western financial circles and is using a lot of experience. There is specific funding from Russia and the Gulf. There are obligations for banks to deposit their hard currency. There are currency swaps with other countries. Publishing gross currency reserves which are positive but forgetting to mention net reserves which are negative. So a lot of these tricks are not specific to Turkey, obviously a lot of governments have used these things before, including in the EU at times. But the accumulation of inconsistencies in the economic policy is something that really worries European circles. And when I say European, it's EU but of course I also include the United Kingdom there.

Sound transition fades in


Sinan Ülgen

Let's now turn our attention to foreign policy so that we have a better sense of international implications of Turkey's elections. With the Russian invasion of Ukraine, Turkey has continuously been in the headlines, whether in relation to NATO, its nonalignment with sanctions and the grain deal. Marc, you've written a few pieces about Turkey's balancing act. Would you care to elaborate a bit on this positioning?


Marc Pierini

Yes, well, as we know, Turkey currently presents itself as playing a mediating role between Russia and Ukraine. Of course, there are elements that are helpful, helping the UN-sponsored grain deal, helping with prisoner swaps. This is of course, welcome in European capitals, but each of these measures mitigate the consequences of the invasion of Ukraine, but none of them leads to peace. And the balanced policy of Turkey is interesting, but it is puzzling European interlocutors. Of course, Turkey has said and voted the right things at the UN General Assembly, in the NATO Ministerial Councils, but it has committed no military assets to NATO's reassurance operation along its own border. And even more importantly, if we look back a few years, the delivery of Russian S-400 missile systems to Turkey and the ensuing exclusion of Turkey from the F-35 stealth fighter program constituted already a strategic advantage for Russia. In the light of the invasion, we see that Russia has, through these two steps, obtained a neutralization of NATO's Southern flank with Russia. And that is worrying in the long term. Of course, there are many other issues, such as Syria, Greece, Cyprus and so on. But this is to me the most important one.


Sinan Ülgen

I think the government's balanced approach to the Russia-Ukraine crisis has overall the support of the Turkish domestic public opinion. Turkey does not want to see itself being totally alienated either from NATO or from Russia. So that policy has broad support. Where there is criticism, it's essentially criticism about the personal relationship between Putin and Erdoğan, where some of the deliberations remain very opaque. The broad public opinion doesn't really know what is being promised and what is being delivered over the longer run. So, there is more criticism on that point. But on the overall stance of Turkey's diplomacy toward Russia and Ukraine, there is broad public support and really little criticism, even from the opposition parties.

Of course, in Turkey, there are a number of other high-visibility foreign policy issues before elections. One always the disputes with Greece over Eastern Med, the potential for a cross-border operation in Syria, now steps for rapprochement with Assad, surprisingly after many years of having backed regime change. But also this comes in the wake of other normalization efforts with regional countries, with the UAE, which went at an accelerated pace but not just UAE, also with Israel and Egypt. So, all this effort to mend the damaged bilateral ties which were the by-product of a foreign policy of the last decade.

Maybe I want to add to this because this was some of the elements that I've also tried to analyze in my latest paper for Carnegie, where I looked at the different options and the foreign policy outlook of the opposition in Turkey, namely, what would they do if they come to power. This was a rather difficult exercise because this is right now a coalition of six parties. They have a number of different agenda points. So the exercise was devoted to understanding the commonalities between their foreign policy agendas in which way they converge, also possibly the divergences in which way they see things differently around Turkey and also lay out there for the differences between their potential policies and the current government party policy. In a nutshell, we've seen while we did these interviews with the people within those political parties who have the foreign policy portfolio, mostly the deputy chairs, is a) they underline the need for a new government to clear the ambiguities regarding Turkey's strategic direction. That Turkey's relationship with the West should be very firm and strengthened. This does not necessarily need to come to the detriment of Turkey's relations with other powers, but there is a need, if I have to repeat myself, to clarify and to eliminate the ambiguities that have been created by the AK party policies over the last decade on Turkey's strategic orientation.

Secondly, they also indicate that this will be reinforced by what they do at home, namely reinforcing the rule of law, improving fundamental rights, addressing the shortcomings regarding Turkey's democratic standards. And the two will therefore create an environment where these strategic objectives will be able to advance more strongly and more rapidly. Then on many of the core issues, relations with the EU, NATO, Russia, Syria, East Med, there are a number of different viewpoints, but there's quite a bit of convergence.

And finally, one of the other common criticism or reform area is where they indicate that Turkish foreign policy should be reinstitutionalized. Their political commitment in any case has been to foster, to advance the reform of the constitution, to change to a parliamentary, what they call a strengthened parliamentary system. And as part of that they want to empower the institutions of policy making and in this case the foreign policy. And by virtue of that also rebalance the weights that foreign policy and domestic policies have had in the past. The criticism being that under the current executive presidential system, domestic politics have come to influence to a much greater degree the conduct of foreign policy, which makes it and therefore much more short-termist and unpredictable. So that's really been the criticism.


Sound transition

Sinan Ülgen

Perhaps we can also look at how all of this will play out in the near future, given that we are looking at elections. Also looking at what happens after the presidential and parliamentary elections that are anticipated later on this year.

Of course, there we need to go into the two different scenarios, or possibly even three different scenarios. The first scenario being the government winning the presidency and parliament, the second one being the opposition winning the presidency and the third one being the opposition winning the presidency but not parliament. And I suppose perhaps the fourth one would be the Erdoğan winning the presidency but not winning Parliament.

So for the first scenario of Erdoğan winning the presidency and parliament, I think we can say that some of the policies that we've seen in terms of the interest rate policy, monetary policy, will continue because the government will feel that they have received a new mandate from the people to continue with what they have done and therefore there won't be a return to conventional economics. Interest rates will remain low, inflation will continue to be a major problem and the government will need to do more fiscal spending to boost growth. However, as in every democracy post elections, the government will feel that they still have a new mandate for a new five year term so they can inflict some austerity in order to deal with inflation. We'll see.

The second scenario of Erdoğan, winning the presidency but not getting a clear majority in Parliament would be that economic policies, like other policies, would need to be articulated in a more collaborative fashion, because the government will then need the support of parliament in order to legislate. And that would create an environment a bit like cohabitation in France, where the president would need to get into serious negotiations in order to get the support of parliament.

Now the two other scenarios are the ones where the opposition has the lead on the side of the executive, including economic policy making. And there what we would expect is essentially a return to conventional economics. Then the new leadership would need to implement austerity measures. They would need to raise interest rates, perhaps not as high as nominal inflation, but they would essentially try to create an anti-inflationary stance by raising interest rate but also building credibility about their policies over the future, having an independent central bank, having credible leadership at some of these important key economic institutions. However, the combination of lower fiscal with more stringent, more disciplined monetary would mean that Turkey could possibly enter a recession, although it may be short lived, but nonetheless that might be what's needed in order to combat inflation. And if this recipe works, then I would expect a strong rebound after that recessionary period in Turkey because normally this is an economy that reacts well to conventional policy making, especially if the government has been able to build credibility regarding its policies. The investment environment will react well and I'm sure that the international perception of what Turkey does at home with the new government and with the new economic team that has essentially been able to establish that sort of credibility at home and abroad will also be positive. So there would be higher financial flows both in terms of portfolio investment, but also ultimately in terms of foreign direct investment, which is exactly what Turkey needs.      


Marc Pierini

I would certainly agree with all you just said. If there is a change of presidency and majority seen from Brussels, what you'll normally expect is to see a lot of political relief, different tone, and then immediately, almost immediately after the election, a willingness of European governments to sit around the table, which is basically currently impossible. Trust will be restored and that, even before any change on rule of law or economic policy has occurred, that will be a major positive factor for Turkey. Of course, as gradually I suppose, rule of law is restored and economic policy is improved, then you will see some of the current obstacles lifted. For example, the key issue of the Customs Union between the EU and Turkey, the only one between the EU and a third country. Well, these negotiations will be able to start, one, to fix the problems of the existing customs union and two, to enlarge the customs union, as you know very well, Sinan. The obstacle for this is currently political because of the rule of law situation.  That will be lifted almost immediately. And also I think we could hope to resume discussions between the EU institutions and essentially the Commission on improving the rate of alignment of the Turkish economy on norms and standards. After all, the EU being the biggest trading bloc in the world, is also the largest source of norms and standards and that will be in the interest of Turkey to further this alignment.

Now, the other hypothesis, of course, is no change. Well, it's very simple. Tensions will continue, trade litigations will continue. That's obvious. But beyond the obvious statement, I think the important element here is that Turkey may then be on the way of losing its position of an EU-anchored economy which is still there because of the customs union, because of trade flows, because of investment and technology flows. But if Turkey was to, as it is currently doing, trade more and exchange financially more with non technology, non innovation countries, I think Turkey may be at risk of losing a critical connection with Europe and that would be regrettable, I think.


Sinan Ülgen

So what is Europe expecting? Or perhaps preparing for, Marc?


Marc Pierini

Well, before the election or until the election my main worry is this verbal escalation between Turkey and Greece. We know that there are litigations and they predate these elections. We know there are elections in Greece as well. But the verbal attacks and threats from the Turkish president have rather increased in the past few weeks. And any form of implementation of these threats would be a disaster for both Turkey, Greece, EU and NATO. So very much hope that reason will prevail. But if something of that kind happens, it will mean complete estrangement of Turkey from the West, economic and financial consequences, disruptions, even more disruption within NATO, and all of this will play to the advantage of Russia, of course. So that is the thing to be avoided. Meanwhile, we have this issue of Finland and Sweden's accession to NATO. I don't think it will be resolved before the election, but we'll see. Meanwhile, of course, while it's not happening, it is also in the interests of Russia, because the Russia-Finland border is more than 1300 kilometers. It's neutralized, obviously, by this deadlock.

The other issue is, of course, with Syria. We're seeing now a complete reversal of Turkey's policy. This U-turn has been engineered by Russia, in my view, simply because Russia doesn't want to see a fifth military operation of Turkey. It is also geared at getting votes on the theme of the return of Syrian refugees to Syria. Well, that is going to be a protracted discussion, relatively ugly in the sense that everybody will talk - current leadership and opposition as well- of voluntary return. But we know that until the political situation in Syria is fixed, returns are extremely risky for Syrian refugees.


Sinan Ülgen

On that point, yes, Russia has had a role to play. But I think, again, it's very much driven not only by Russia, Russia facilitated it, but it's driven by the need for the Turkish policy environment to respond to the demands of a population that wants to see a solution to the refugees. And this is going to be a big theme in the elections. And this is what's pushing the government to seek rapprochement with Assad more than Russia. Russia is facilitating it. But the interest on the side of Ankara to publicly acknowledge this process and want to meet in person, even more, can be explained by the need to tell to the Turkish public opinion that the government has some solutions to the refugee issue. This was also part of the commitments by the opposition that if they were to come to power, they would seek to normalize the relationship with Assad, with the prospect that this could lead to an agreement for the safe and voluntary return of the refugees. Now, we all know how difficult that will be, but nonetheless, in the political realm, this is what parties competing for power need to deliver to their constituencies, even if there are glimmers of hope about how they intend to address this very now very highly prevalent issue for the Turkish public opinion.


EIO Musical theme steps in


Sinan Ülgen

So this is really what we wanted to share with you. And thank you, Marc, for joining me on the podcast.


Marc Pierini

Thank you, Sinan. And I guess between now and the elections, we have a lot more to write and say.




Sinan Ülgen

For those who are interested in learning more about Turkish foreign policy, I encourage you to follow Marc's work on Twitter @MarcPierini1. So that is M-A-R-C-P-I-E-R-I-N-I-1. You can also find me @sinanulgen1.

And that is, S-I-N-A-N-U-L-G-E-N-1.

Thank you for listening to Europe Inside Out, a podcast by Carnegie Europe. Please join us again next month.

Let us know what you think of the show by reaching out to us on Twitter @Carnegie_Europe or by email at If you like the show, leave us a rating, and subscribe wherever you get your podcast.

Our producer is Midori Tanaka. Our editor is Alexander Damiano Ricci of Bulle Media. Sound engineering and original music by Jeremy Bocquet.