EU attempts to make new deal with Turkey as relations deteriorate

Press conference by Dimitris Avramopoulos and Vĕra Jourová, Members of the EC Date: 12/04/2017. Location: Brussels – EC/Berlaymont. © European Union , 2017. Source: EC – Audiovisual Service. Photo: Jennifer Jacquemart

The EU foreign ministers gather in Malta on Friday to discuss about the future relations with Turkey a few days after Erdogan’s narrow and controversial victory in the Turkish referendum.

It seems that the EU officials and leaders start fearing that the Turkish president will materialise his threats about abandoning the EU-Turkey refugee deal in case the EU will not accept visa deliberations for the Turkish citizens and restart EU-Turkey accession talks.

Thus, it is in the intention of the EU to act swiftly and Johannes Hahn plans to move towards a new customs agreement and officially suspend the Turkey’s accession talks. Will the EU member states agree to support such an action the moment that Erdogan gains wide constitutional powers?

Turkish economy shrinks

As Turkey and the rest of the world are trying to absorb the immediate effects of the Turkish referendum, the Turkish economy is not showing encouraging signs. While the budget deficit increased, the unemployment rate reached 13% in the three months to February compared last year’s 11,1% according to Statistics Institute.

However, Turkish stocks hit all time high on April 17 caused by the relief of the country’s referendum and expectations for more certainty and stability. More specifically, the Borsa Instanbul 100 Index rose 1,5% to 93.802,81 points revealing that investors look for riskier assets as Turkish stocks are among the top five performers in global equity markets in 2017.

Furthermore, the Turkish lira picked at 3,64 against the U.S. dollar on April 17 short after the outcome of the Turkish referendum. The investors are looking for a more stable environment as the lira has lost 4% of its value since the beginning of the year making it the worst performing currency in 2017.

Will EU-Turkey deal be modified?

Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations, is planning to ask for a mandate from the EU Foreign Ministers on Friday to change the agreement with Turkey suspending the accession talks. The Commissioner supports that the current status quo is not working for either side and it is time to rethink and reschedule EU-Turkey collaboration.  More in detail, Mr Hahn mentioned that: “The current situation is not sustainable, neither for them nor for us. We should say OK, let’s clean the table [of] everything we had and look [at] what could be the future kind of co-operation”.

The EU seems to be looking for a solution to keep the relations with Turkey alive the moment that the Turkish president is very soon going to gain more powers. The accession talks are off the table but a new trade deal which will include industrial goods may be on the way. However, it is certain that the negotiations, if agreed by the majority of the EU countries, will be long and fierce.

Turkey threatens the EU again

The migration pact that was signed last year between the EU and Turkey is jeopardized by the outcome of the referendum and its future consequences. The possibility that Turkey will reinstate the death penalty and demand visa-free travel within the EU’s Schengen area is most likely since the Turkish president is about to receive additional powers.

The Turkish Minister for EU affairs stated on this issue on CNN Turk last Saturday that Turkey must be warranted visa deliberations by the EU by the end of May in order not to put the refugee deal at risk. Omer Celik specifically said: “If they accept our proposal, the [refugee] deal will be completed in a positive way, otherwise it will come to a standstill”.

EU-Turkey relations at risk

Both sides have realized that the current situation is not working. The outcome of the referendum was the straw that broke the camel’s back. Only yesterday, a leading EU human rights body voted to re-open the monitoring procedures in Turkey in fear of the constitutional modifications that are about to take place as a result of Erdogan’s win on April 16.

However, the Turkish Prime Minister Binali Yildirim characterised the decision as politically motivated and mentioned that his government will act against this decision. Furthermore, Binali Yildirim stated that relations between the EU and Turkey have reached “the most negative level possible”.

All in all, the situation seems to be critical as it is a matter of time till amendments are legislated empowering the Turkish president. The EU will have to find a solution persuading Turkey not to start sending migrant flows to the Old Continent deteriorating the refugee crisis the moment Brexit negotiations have just started between the EU and UK.