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TURKEY’S $20 BILLION TRADE PITCH TO MERKEL ENVOY IS TOUGH SELL: BLOOMBERG
Turkey wants Germany to help deliver a $20 billion boost in exports, with an envoy of Chancellor Angela Merkel serving as the conduit, Bloomberg reported.
A party ally of Merkel, Altmaier has the chancellor’s ear and heads the cabinet ministry in charge of credit guarantees, a tool used to boost German exports. While business ties between Germany and Turkey are reason enough to engage, he’s offered no promises on the EU trading relationship that Turkey views as key to its regional economic ambitions.
According to Bloomberg: “Erdogan reached out to German business leaders during his Berlin visit. During a meeting with executives from companies such as Deutsche Bank AG and Robert Bosch GmbH, he asked for the same kind of solidarity that the euro area showed Greece during the debt crisis, four people who were at the closed-door event said.”
The news agency added: “Erdogan is seeking an expansion of German credit guarantees for exports to Turkey and increased direct investment, according to two Turkish officials. While the Economy Ministry has signaled it’s open to using its influence, Merkel’s government actually tightened conditions for Turkish export guarantees this year, given a weaker economic outlook and currency risks.” While German state guarantees backed 2.1 billion euros ($2.4 billion) of business with Turkey in 2015, the amount fell to one billion euros in 2016 and 1.6 billion last year. A bigger, more distant prize is expanded trade with the EU. Turkey calculates that its exports account for about half of the $170 billion in annual trade with the EU. If Europe overhauled and expanded the existing customs union, those exports could increase by as much as a quarter, or about $20 billion, according to government estimates.
German CEOs Bloomberg went on: “Turkey wants Germany to use its influence in the EU to push for the removal of restrictions on its producers and service providers, according to a senior Turkish official, who asked not to be identified by name. Turkey also is unhappy that non-EU countries with free-trade deals with the bloc get access to the Turkish market without automatic reciprocal benefits, the official said.”
“German anger at Erdogan’s Nazi references and crackdown on civic freedoms suggest Altmaier can only do so much. While the rhetoric has calmed since the Turkish election in June, relations remain tense. At his private meeting with German executives, Erdogan faced open criticism, including over his handling of the economy, according to those present. In a departure from his combative public persona, the Turkish leader addressed the concerns and asked for patience, the people said,” Bloomberg noted.