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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.

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October 22, 2019

Without EU accession prospect, what is at stake for Macedonia?

Emmanuel Macron's veto to opening accession talks with Albania and Northern Macedonia is a historic mistake, according to the FT's editorial. It leaves the EU without a credible foreign policy for neighbouring countries and deteriorates trust in the region. The French concerns could have been addressed inside the accession process they argue. Instead the French insisted on their principled No. The EU now faces risks of destabilising political forces in the Balkans, a surge of nationalists and a subsequent conflict with Greece.  

It only took 48 hours after the refusal to start accession talks to bring down the government in Skopje. Prime minister Zoran Zaev was the leading figure promising to take his country into the EU. He secured a two-thirds majority in parliament for a constitutional change required for the name change under the Prespes Agreement. The name change was a historic achievement, despite resistance amongst the slavic part in Northern Macedonia and conservatives in Greece, including now prime minister Kyriakos Mitsotakis, who lobbied against the agreement in opposition but declared himself to be ready to implement it once in power. Macron's veto sends Zoev back home empty-handed and risks opening up the wounds over the agreement. 

The plan is now for Zaev to step down in January and for snap elections in April. The concern is that the lost momentum behind EU accession talks could fuel a mix of nationalism, patriotism and populism. How this will show up in the polls remains to be seen. If VRMO were to come back to power, relations with Greece are certain to deteriorate, writes the FAZ. Several of the arrangements under the Prespes agreement have yet to be implemented. For example who can claim to be the producer of Macedonian wine? The Greek province Macedonia wants to have exclusive rights, but the wine producers in Northern Macedonia might no longer be convinced to give up a name they have been using for so long. 

It is not clear yet that VRMO will return to power and if with whom they will build a coalition. It depends on who the voters perceived the No to accession talks and how Zaev can recover from this defeat. 

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