Europe's energy security is related directly to stability in Turkey
This week is elections week for Turkey and investment and market analysts are eagerly waiting for the outcome. In the article Turkey as a center of stability and confidence, Daily Sabah writes about the risks that Turkey will be facing after the elections?
First, let's just say that Turkey is one of the least risky countries to stand behind in the newfangled trade wars. Europe, southern Europe in particular, is on the brink of a new recession. It is not yet clear how Spain and Portugal will perform in the World Cup, but their economic performance is more or less obvious and a new crisis is around the corner. I won't even count Italy in this. The European Central Bank (ECB) does not know what to do because of this. If the ECB resorts to monetary tightening - and Germany wants it - the euro will be quickly revalued, and the crisis of these countries will deepen as the euro gains value.
For this, the ECB seems to be giving the sign of monetary tightening and interest rate hike at a distance, but it is impossible for it to do so. Unless it does this, Germany has to shoulder the burden of the countries that are about to go through a crisis. And, at this point, German Chancellor Angela Merkel has come to the end of the road. As a result, there is a political and economic crisis on the European front. On the other hand, Asia Pacific economies, which have been the savior of the capitalist system since the 2008 crisis, seem to have come to the end of growth. The trade wars that have begun might put these economies, which are based on foreign competition and export revenues alone, in an awkward position.
In this case, located on the coast of Europe, Turkey is coming to the fore as an economy which ensures trade connection between Asia Pacific and Europe. Moreover, Turkey has started to transmit the natural gas obtained from fields in the south of the Caspian Sea and Shah Deniz 2 field to Turkey via the Trans Anatolian Natural Gas Pipeline (TANAP). Essentially, this energy path, as the Southern Gas Corridor (SGC), will carry the Mediterranean region's natural gas to the European mainland. On the other hand, thanks to TurkStream, one of the biggest energy projects recently developed by Russia and Turkey, northern energy paths will be under Turkey's audit. In short, Europe's energy security is very much related to Turkey's stability.
However, things are not limited to this. China's One Belt and One Road (OBOR) project is linked to Europe via Turkey which has developed its high-speed rail systems associated with it. It's hard to say whether we need to add to these two important factors that the migration waves coming from the Middle East are swallowed by Turkey before reaching Europe.
Certainly, not only Europe, but also the entire world must give Turkey and especially President Recep Tayyip Erdoğan their dues about the immigration issue. As such, the Europeans should pray more than the Turks in favor of Erdoğan's victory in this weekend's elections. This is because, Turkey's welfare, security and stability is intertwined with the stability of Europe and even the entire world. European leaders and politicians who can't understand this simple equation are losers like the Austrian prime minister, who is in the grips of racism. As a result, a stable Turkey is the way out for both Europe and Asia Pacific whose growth will considerably fall with the ongoing trade wars. This is only possible with a strong Erdoğan government. Interestingly enough, this situation goes for the U.K. and the U.S. as well. The U.K. will need a strong partner like Turkey to both solve its internal problems and carry out the Brexit process with Europe.
For us, the U.S. will be the loser of the trade wars. The diminishing trade cycle of the dollar will create difficulty for the U.S. in financing its twin deficits in the middle and long term, and countries that run a surplus, especially China, will give up financing the U.S. and undermine its economic and political power. As Immanuel Wallerstein says, U.S. power has already begun to decline. President Donald Trump can't continue to act like an ambitious but crazy CEO that is going bankrupt for much longer. Meanwhile, just like in the beginning of the 2008 crisis, 2009 and afterward, Turkey is drawing its own safe way far from this turmoil. The presidential system, which will be on the agenda after the elections, will increase the investment ability coefficient to the highest level by reducing the bureaucracy. The way of our central bank and other independent economic institutions is obvious. There is not the slightest ambiguity about monetary policies. Fiscal policies are also clear and Turkey has the world's most robust budget realizations. The May 2018 budget ran surplus. So, Turkey does not have an economic policy ambiguity in terms of entire monetary and fiscal policies for the post-election period. On the contrary, pro-market reforms will continue to strengthen. We are sure that Turkey will gain confidence and stability in the elections on June 24 and this will set an example to the world.