KRG referendum, German elections and the markets

Turkey is going through tough times both politically and economically. In fact, it is not a new situation for us, as Turkey is in a challenging region that has a strong potential and that is, at the same time, being used as a stage for many scenarios.

What makes this period different for Turkey is that it did not have such an active political role in the developments in the region in the past. Now, political stability and strong economic structure achieved in the 2000s is also boosting Turkey’s weight and role in political, economic and social equations that are being established in the region.

However, this situation of Turkey is creating disturbance, given that it has entered the process of becoming an "energy trade center" in terms of building both a bridge and a market, especially for the energy resources of countries with these resources. The instability environment that was initiated targeting Turkey is aimed at reducing the country’s strategic importance in the region.

It is also necessary to look at the Kurdistan Regional Government (KRG) referendum from this perspective. For the last 15 years, Iraq and Syria have been dragged into instability. The contribution of the leaders in the region, especially the dominant forces, is great in this.

There have been many different attempts to undermine Turkey's regional power, not just in the case of Iraq and Syria.

It is a clear fact that strong, cooperating countries and societies in the region are the greatest fear of countries which have purposes and dreams regarding the region. So, KRG, which acts jointly with Turkey, will not serve the interests of other countries.

Let's remember that Turkey plays a key role in bringing KRG oil to the international market. In other words, Turkey is KRG’s door to the world. In this case, taking on Turkey means that the KRG will be  suffocated.

Won’t a move against Turkey, with which it has had both cultural and social ties for years, further deepen the existing regional instability? Won’t this create uncertainty for the KRG’s future in the region?

Rendering Turkey’s already hard task in the region even harder will not benefit any of the countries in the region. On the contrary, it means achieving political and economic stability in the region and removing the region, which has been turned into a center of fire for years, from the circle of despair. Breaking this circle is only possible with Turkey.

New political developments and markets

Even if the KRG’s referendum decision, subsequent National Security Council (MGK) decisions, and of course geopolitical dynamics create risks; the steps that have been taken to prevent these risks from turning into a crisis and keeping the economic agenda alive show that the national economy will easily overcome this problem.

Therefore, it is necessary to view the events with the assumption that regardless of what develops between the KRG and Turkey, it will not affect the macroeconomic indicators of the country. This problem is neither the first nor the last for Turkey.

The best example of this is Germany. The tension between the two countries as a result of Germany acting as an opposition party in the referendum process was further heightened by Germany basing its election campaign on anti-Turkey sentiments. The election results and the concomitant environment will be important for Turkey and Germany as well as for Turkish-German relations.

One of the topics at the center of relations between Turkey and Germany is how Turkey and the EU process will shape and how Germany will guide EU policies. It is clear that the negative attitude toward Turkey's EU membership before elections is not sustainable, no matter who wins in Germany.

Indeed, Turkey is not a country to be renounced for the EU to the same extent that it cares about EU membership. Moreover, Turkey’s importance is clear in this period when EU countries are increasingly internally withdrawing and embracing quite conservative refugee and immigrant policies.

For this reason, although both the KRG referendum and German elections pose a risk to the country's economy, the Turkish economy has the power to eliminate these risks. Therefore, we need to increase our confidence in our economy and reflect it on economic activities.