​EU-US sanctions: This is not a “one and done” shock!

TURKEY - In Brief 11 Dec 2020 by Atilla Yesilada

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EU leaders will impose ultra-light sanction on Turkish entities for East Med gas drilling and uncooperative behavior in the Cyprus conflict. Numerous news agencies report that as a final favor to his pal Erdogan, Mr. Trump will unilaterally announce sanctions against Turkish bureaucrats for the purchase of S-400s. I don’t think I need to provide detailed quotes on who is sanctioned and why, because everyone who’ll bother to read this Market Brief ought to be familiar with the sanctions developments. The abrupt jump in dollar/TL suggests investors don’t think these sanctions are a one-and-done deal. I write this Brief because I tend to agree with them. I interpret EU’s strategy as one of co-opting Biden to put a double squeeze on Erdogan until he relents on several key issues.In my view these are The deviations from Copenhagen Criteria.The nasty habit of taking political prisoners.An end to belligerent behavior in East Med, including Libya (not my view by the way, this is EU’s perspective on events). Mothballing S-400s.Better relations with the PYD/YPG Kurdish entity in North-East Syria. The last two are more important to the new White House rather than EU, I’d speculate. I don’t know whether Biden will agree to such a cooperation, but EU’s willingness to condition Erdogan’s behavior gives him added leverage to pry Turkey away from the Russian embrace and elicit more cooperation in the new Mid East and Russia-Iran policies. Biden is likely to offer Erdogan a truce on the terms above, and may then wish to join EU with more sanctions, if Erdogan declines. While the first reactions from Ankara were polite and muted, I’m certain Erdogan has no intention to comply with the w...