Russia and Turkey agreed to strengthen economic cooperation during a meeting held in the city of Sochi, Russia, on August 5. The meeting was viewed with some concern by European countries, at a time when the West has sought to reduce the scope of its economic relations with Russia over the ongoing war in Ukraine.
However, Turkish President Recip Tayyib Erdogan and Russian President Vladimir Putin have not always maintained warm relations. The two countries are often seen as geopolitical rivals, with tensions dating back centuries. Currently, the bilateral relationship seems to be getting stronger, and experts say this could lead to some kind of retaliation from the West. We explain what happened and how Europe can react from now on.
What is the agreement signed between Russia and Turkey?
Turkish TV channel TRT said in a report citing President Erdogan‘s statements, that the two leaders discussed gas exports to Turkey and agreed to pay for them partially in Russian currency, the rouble.
According to a Bloomberg report, five Turkish banks have adopted Russia‘s Mir payment system for ruble payments.
The countries also agreed to “meet each other’s expectations in terms of economy and energy”. Russian Deputy Prime Minister Alexander Novak told reporters: “We talked about the financial banking sector – on which great agreements were also reached – so that our commercial companies, our citizens can transact during their tourist trips and exchanging money as part of commercial turnover,” according to Russian news agency TASS.
Other areas of cooperation mentioned in a joint press release issued later are transport, trade, agriculture, industry, finance, tourism and construction.
Why are European countries concerned?
An EU official told the Financial Times that the bloc was monitoring Turkish-Russian relations “increasingly closely”. A senior Western official also suggested that in the event of more extreme measures, countries could demand the withdrawal of investments from Turkey and prevent their banks and companies from operating in the country.
Another source of concern could be Russia’s Mir payment system, the Financial Times reported, which has been adopted by 5 Turkish banks. Visa and Mastercard having suspended their operations in Russia since the invasion of Ukraine, Russian tourists in Turkey can now use their Mir card, thus circumventing certain Western sanctions.
At the same time, Turkey is an important partner for the EU, without being an official member. The country is also a long-time member of the North Atlantic Treaty Organization (NATO), the security alliance of Europe and Western countries.
He holds the key to allowing Sweden and Finland to be admitted into NATO, which the alliance may be keen to do given events in Ukraine. The Financial Times report also referred to Turkey’s instrumental role in handling the Syrian refugee crisis, stating that the country was hosting around 3.7 million Syrians under an agreement with the EU and “has contributed to stemming the flow of migrants to Europe”. Overall, Turkey is an important partner for the West and taking action against it could lead to a new set of problems arising for the West.
A balancing act?
Russia is a friend of Turkey but also a centuries-old geopolitical rival, dating back to the Russo-Ottoman wars. For Turkey, Moscow’s annexation of Crimea in 2015 has been a nagging concern and President Recep Tayyip Erdogan has said Turkey will never recognize this “illegal” action. Their strategic interests also led them to take opposing positions during the Syrian civil war.
Over the past few years, Ankara and Moscow have been able to collaborate on projects, albeit sometimes at loggerheads. In their statements after the August 5 meeting, available on the Kremlin’s website, the leaders referred to the ongoing construction of the Akkuyu nuclear power plant, supported by the Russian company Rosatom since 2010. Once completed, it would be the first nuclear power plant in Turkey. plant.
They also referred to TurkStream, an undersea gas pipeline across the Black Sea that “directly connects Russia’s largest gas reserves to Turkey’s gas transmission network, providing reliable energy to Turkey, Europe South and Southeast,” according to its website.
On the other hand, the United States sanctioned Turkey in 2020 under its Countering American Adversaries Through Sanctions Act (CAATSA), for purchasing the S-400 air defense missile system from Moscow. India also bought this system, but got an exception to the imposition of CAATSA by the US government.
Erdogan neither supported the invasion of Ukraine, nor did Turkey join the Western-led economic boycott of Russia. This middle position was again used by Turkey recently, when it negotiated the grain export agreement between Ukraine and Russia in July, which unblocked Ukraine’s important ports on the Black Sea. . How long this position can be maintained in the face of Turkey’s growing proximity to Russia is the question that remains.