Sunday, January 24, 2016

EU could sink Turkey: The Leverage of Economic Hardball to adjust Erdogan attitude

          Dwight Eisenhower knew how to play hardball.  During the Suez Crisis in 1956, Britain, France, and Israel found this out the hard way.  When alerted to the surprise attack on Egypt, Eisenhower did not ask Anthony Eden to reconsider politely; he told him he would sink the pound and bury England's economy.  Message sent; all three backed off.  (Note*This example illustrating power of economic leverage, not the merit of Ike's actions, which is another debate)

           This is called economic leverage: the ability to influence through economic means. It's quite powerful, sometimes more so than a B52 Bomber.  Before engaging in any battle, one must evaluate the leverage one holds over his opponent (and vice-versa).

           The EU-Turkey relationship is curious to me (I have several detailed posts on the subject).  85% of the refugees enter an impotent Greece via a network of 25,000 smugglers operating in Turkey.  The common sense and natural approach should be to seal that border and send the boats back.  Australia utilizes this approach successfully - eliminating the tragedies at sea and putting the smugglers out of business. Amazingly, the EU has chosen to surrender their border and delegate EU border security to a foreign entity in Turkey.  The EU is negotiating from a point of weakness, at the mercy of Recap Erdogan.  I believe this is a mistake and it is doomed to fail miserably.

         The EU needs to reassess the economic leverage they have over a very vulnerable Turkey.  They will soon realize that they do have the leverage, assuming they have the strength to 'man-up' to Erdogan (which is questionable).

         Turkey's economy has slowed and their current account balance as % of GDP is -7.9.  The Turks are extremely poor with a paltry GDP per head of $10,970.  The inflation rate is a staggering 8.9% and unemployment at 10%.  The country - 98% Muslim- is a tinderbox of volatility that Islamic jihadists and foreign fighters use as a hub for Syria.  Tensions inside the country are high and they are fighting a proxy war through their various Islamic rebels against both Putin and Iran.  Turkey is about as European as Sultan Suleiman I.

            Dig deep and one will find more economic ammunition to battle Erdogan.  41% of Turkey's exports are to EU28 countries with Germany buying the most from Turkey.  The Middle East is imploding with no future; Europe could bury Turkey's economy.  Erdogan needs Europe much more than Merkel needs Turkey.   The EU should by all means give Erdogan a choice behind close doors:  Eradicate the smugglers, stop the dinghies from sailing, and respect our borders and we can talk about your future; or cast your lot with a Middle East in flames and we will isolate you and your people from Europe.  Erdogan respects power, not candy, and cannot afford any type of sanctions at this time from a continent he needs.  He will understand the message loud and clear.  Destabilize the economy and his power becomes threatened. (Word of caution. EU Border must be secured for any solution.  It is a common sense at any time).

            The weak and feeble response by the EU to this crisis has baffled me from the start.  By unarming themselves of all courage in the face of "UN-Correctness", the EU finds itself disrespected by the smugglers, Erdogan and even the migrants themselves. As a result, all Europeans are at risk and chaos reigns.  The borders are open to literally anyone, including Islamic terrorists.

           The EU is not threatened by a strong opposition but rather by their own weakness and lack of will and confidence.  The EU has the leverage to stop this madness; but do they have the courage to fight for their culture and way of life or have they already surrendered their soul?
 

       

         

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