(HB) Turkish Deputy PM to Europe: We’re Family, Let’s Talk

(HB) In an exclusive interview, Turkey’s deputy prime minister explains why the controversial, upcoming referendum on presidential powers in his country is not as scary as everyone thinks. Nor is it incompatible with getting closer to E.U. membership, he argues.

Closing Day Of The World Economic Forum (WEF) 2017
Taking a conciliatory view: Turkish politician Mehmet Şimşek, the country’s deputy prime minister. Source: Bloomberg

In an exclusive interview with Handelsblatt, Turkish politician Mehmet Şimşek struck a more conciliatory tone, after several weeks of increasing tensions and inflammatory rhetoric between the Turkish government and E.U. member states.

Relations between Turkey and the E.U. have deteriorated as President Recep Tayyip Erdogan has launched a political crackdown in the wake of a failed military coup last summer. Tensions have been exacerbated in recent weeks as Turkish politicians have sought to campaign for a constitutional referendum, which would give Mr. Erdogan increased powers, among the Turkish diaspora in E.U. member states such as Germany and the Netherlands.

After planned rallies by Turkish politicians were canceled, Mr. Erdogan compared the Netherlands and German Chancellor Angela Merkel to the Nazis, sparking outrage in Europe.

But Mr. Şimşek, an economist by profession and a member of the ruling AKP party headed by Mr. Erdogan, took a more pragmatic approach.

Let’s face it. Europe needs Turkey and Turkey needs Europe.

He currently serves as Turkey’s deputy prime minister and it was clear that he had the country’s financial interests at heart.

He spoke about why Turkey will always remain close to the E.U., how best to ensure this – including how to bring Turkey back into accession negotiations – and how the current clash is really just a Euro-centric misunderstanding of internal Turkish politics that needs to be resolved.

 

Handelsblatt: Mr. Şimşek, as we all know, the relationship between European nations and Turkey has been tense lately. And a lot of European politicians have expressed concern about the proposed referendum, saying that if Turkey becomes a more authoritarian state, that any remaining chance of the country becoming an E.U. member will be extinguished.

Mehmet Şimşek: The fear that Turkey will become a more authoritarian regime is unfounded. The western attitude towards President Erdogan blinds them regarding the presidential system. A lot of people in the West have not really studied what the new system is about unfortunately.

The reality is this: This amendment is going to bring stability. The Turkish Parliamentary system has not generated stability. Like in Italy, we suffer from weak, short-term, coalition governments. But every time Turkey has had a strong single party rule, it does really well.

And what about Turkey joining the E.U. – is this still desirable from Turkey’s point of view?

If the E.U. moves to a multiple speed union, the idea of Turkey having room for further integration into single European markets is not far fetched. But today it looks like completely off.

Yes, clearly there are bad feelings. But let’s face it. Europe needs Turkey and Turkey needs Europe. It is a long term relationship. The perspective of walking away from each other and forgetting about each other doesn’t seem very realistic to me.

I have been pro-European for a very long time. And I think, if our European friends are sincere about keeping Turkey anchored to Europe, they need to listen a little bit more. They need to talk to us. They should not shout at Turkey. Turkey deserves to be treated with respect and better understanding.

All we ask is for a little bit of empathy and understanding, a little less doubt [about the fact] that we are doing this to strengthen democracy, and to strengthen rule of law.

Turkey’s commitment to achieving European standards like this was strong and it remains strong. Turkey has suffered from multiple shocks, which made our country respond in a way that is perceived as if Turkey is moving away from Europe in terms of its values.

I don’t say anything we do is perfect. What I’m saying is, unless you realize what Turkey has gone through, I don’t think you can make sense of Turkish response. Sadly … bashing Turkey at a time of the election cycle is very fashionable.

Turkey Referendum
Preparing for the referendum: People walk past a billboard featuring Turkey’s President Recep Tayyip Erdogan that reads “Yes” in Turkish, in Ankara. Source: AP / Burhan Ozbilici

Is that why you think politicians in, say, the Netherlands and in Germany have been so critical recently? You believe the Dutch response was all about their recent elections, rather than anything Turkey actually did?  

Look at what the Dutch have done. We were thinking that we belong to the same family. Would you expect that? They were threatened by the far-right and their response is to adopt far-right practices and policies.

In my view, even our friends’ opinions about Turkey are formed based on headlines they see. Headlines don’t do justice to Turkey. Then we have FETÖ [the social-religious movement led by Turkish cleric Fethullah Gülen that the Turkish president blamed for the recent attempted military coup] and the PKK [the Kurdistan Worker’s Party, whose fight for independence for Turkish Kurds has resulted in thousands of deaths] which are campaigning against Turkey.

We see them as an existential threat for our country. These networks are very strong in the West – we are aware of that. So I am not surprised about the misunderstanding.

At the very least Europe should not apply double standards. All these [people] who run anti-Turkey campaigns can run around freely. The PKK can conduct demonstrations. But we can’t campaign. This is really, really hard to understand. And this is why you get the type of resentment, or even anger, among Turkish citizens.

I hope, once we have this referendum and [after] elections in E.U. member states, that things will go back to some sort of normalcy and we will talk on a more positive agenda.

So basically you believe that Turkey needs the referendum to succeed.

Yes. We see this referendum potentially serving as a catalyst to open up a new page in growth. The best way to rebuild trust [between Turkey and the E.U.] is by saying the right things, by doing the right things. So, sound macroeconomic policies, reducing uncertainty, moving back to more pragmatic politics; that is what we are trying. And moving back to a more stable foreign policy.

How would you describe the Turkish economy right now?

Let’s just say there is moderate performance. Despite domestic and external shocks, the economy has proven very resilient. Growth is now moderate, our fiscal position is fairly strong. Public debt is about one third of the E.U. average. We are creating jobs – but not enough.

Between 2008 and 2015, we created 7.2 million jobs. But last year, after the coup attempt, terror attacks which saw tourism suffer, it was only 350,000 jobs. We believe we need to create 800,000 jobs a year to contain unemployment.

Basically the situation in Turkey in broad terms is not as bad as it looks, but it is not as good as we would like it to be. The Turkish story is a complicated one. What has happened in the last years: Four elections, a failed coup attempt, the collapse of geopolitical order, a lack of functioning states in our neighborhood. Turkey has been resilient but of course performance has been hit.

We need to move on. There is no magical instrument or tool, but reforms can have an impact by improving short term expectations, and regaining confidence and trust.

Foreign investments are also down in Turkey.

We think there are delayed investments. But we are providing incentives. Additionally, global demand seems to be picking up, also because of higher oil prices. Once we get clarity on the political front – which is associated with the outcome of the referendum – the economy is likely to pick up momentum. And on the back of that job creation will strengthen.

The fallout from the tourism industry may continue this year, because the fear of terrorism is clearly still there.

So what plans does Turkey have for the medium and long term?

We need more reforms to put Turkey back on a high-growth trajectory. We have done it in the past. I think if you look at Turkey’s performance, you will see that, despite multiple shocks, it is very impressive. From 2002 to 2015 the average yearly GDP growth was 5.9 percent. This is quite an impressive number.

Over the last eight years, Turkey has faced massive challenges, headwinds and huge shocks. But Turkey continued to deliver a pretty decent performance. And fundamentally, long term prospects have not changed. We have a population of 80 million people. Their aspirations and desires have not changed. That makes Turkey one of the large emerging markets, with a sizeable domestic market, that cannot be ignored.

I am sure we can go back to growth of between 5 and 6 percent. With the exception of China and India, how many countries deliver this kind of growth?

And three years down the road, we might think about reconstruction for Syria, Libya, Iraq and Yemen. That is where Turkish companies will come in.

Turkey and the E.U. recently agreed on an enhancement of the [Turkish-E.U.] Customs Union. It is in everybody’s interests. Turkey is fifth largest trading partner of the E.U. outside its member states. Trade could double to $300 billion annually. So it is in the European interest to have Turkey onboard. And it is our interest to enhance dialogue. So let us be civilized and do the things that should be done.