October 22, 2019
High stake poker with Turkey
As the US retreats from the Syria border region to Turkey, Russia emerges as the real power broker on that theatre. Donald Trump might have negotiated an immediate ceasefire, but it will be up to Vladimir Putin to negotiate a lasting solution with Recep Tayyip Erdogan today.
French newspapers report that the Turkish plan for a safe corridor 444km long and 30km deep into Syria may have to be reduced to a 120km-long stretch between Tal Abyad and Ras al Ain. The remaining areas would be looked after by the forces of Bashar al-Assad's government, Russia's ally. For Assad the US retreat was an unexpected gift. Thanks to Russia, which quickly brokered a deal with the Kurds, government forces are now present in regions where they had no access to for a long time. Russia might have to continue to supply troops to buffer between the different forces. This is a high-stakes power brokering with many risks down the line. One of them is Isis terrorists escaping from prison camps.
In Europe, in the absence a common political plan, it is up to single institutions or countries to act. The European Investment Bank has been one of the first to shut down its business with Turkey due to the country's operation in Syria. The bank used to finance about €1.5bn-€2.2bn of investment projects in Turkey yearly, but after the failed 2016 putsch it already scaled back its presence. The EBRD is also reducing its business in Turkey, though it is not linking this directly to political developments. Turkey has been the main recipient of money from both banks. The EBRD has invested €10bn altogether, and the EIB still has €16.5bn in outstanding credits.
In Germany, meanwhile, there is a discussion about reducing Hermes export guarantees to Turkey. A Hermes cover is an export credit guarantee by the federal government. These guarantees are part of German foreign trade policy and protect German companies in the event of non-payment by foreign debtors. In 2018 Turkey was the second biggest recipient of those export guarantees, after Russia. Guarantees for Turkey already fell by more than 20% in the first half of the year and politicians from the opposition and the SPD are now raising the issue whether they should be granted at all.