Germany Warns Turkey on Investment, Visitors as Ties Deteriorate

Germany flexed its economic might in response to deteriorating ties with Turkey, warning companies against doing business in the country and issuing revised guidelines for travelers.

Foreign Minister Sigmar Gabriel announced a “re-orientation” of German policy toward Turkey on Thursday, threatening to send already stormy relations with President Recep Tayyip Erdogan into a downward spiral. After months of tensions over NATO troop visits, imprisoned journalists and barbs peppered with Nazi references, tensions came to a head this week over the detention of a German human-rights activist.

Turkey’s actions show that it’s “departing from the basis of European values,” Gabriel told reporters in Berlin, raising the prospect of diminishing investment and a drop in the number of Germans traveling to Turkey. Chancellor Angela Merkel backed his position, calling it “necessary and unavoidable” through her spokesman.

Sigmar Gabriel on July 20.

Photographer: Kay Nietfeld/AFP via Getty Images

“One can’t advise anyone to invest in a country when there is no legal certainty and where companies, completely respectable companies, are presented as terrorists,” Gabriel said. “I therefore do not see how, as the government, we can still guarantee German company investments in Turkey if, as has happened, arbitrary expropriations for political reasons have not only been threatened but have already taken place.”

The rapidly escalating situation affects two NATO allies that are mutually dependent. Germany is Turkey’s largest trading partner, while ethnic Turks make up Germany’s largest minority. Merkel was key in pressing for a refugee deal between the EU and Turkey under which Erdogan keeps mainly Syrian refugees in Turkey in return for billions of euros in aid and progress toward EU membership.

Activist Arrest

But as Erdogan has cracked down on dissent, jailed over 100,000 and consolidated power in the year since a failed coup attempt, Germany has been a prime target of his wrath. The Turkish leader commonly resorted to Nazi references when attacking Germany for not being able to campaign in the country for a referendum this year.

This week’s flare-up was prompted by the arrest by Turkish authorities of German rights activist Peter Steudtner and five others on the grounds that they were part of a terrorist organization — an act denounced by Merkel as “absolutely unjustified.”

The Steudtner case “shows that German citizens are no longer safe from arbitrary arrests in Turkey,” Gabriel said. “We have no other choice — because we are responsible for the protection of the citizens of our country — but to adapt our travel and safety advisory to Turkey and let Germans know what can happen to them when they travel to Turkey.”

“We can’t go on as we have before,” he said. “We have to be clearer than before so that those in charge in Ankara understand that such a policy won’t be without consequences.”

Germany’s BGA association of exporters signaled that the threat over business is real, saying that companies had already halted investment and that it expects a “significant drop” in exports to Turkey.

“You certainly can’t advise any companies to take on investments in this climate,” the BGA said. “This is an escalation that we couldn’t have predicted and a bitter one for all involved.”

The association added that the economy “wouldn’t go bust” if Turkish exports disappeared. At 22 billion euros ($25 billion) in deliveries of mostly auto parts and chemical products, Turkey ranked in 15th place last year, BGA said. By contrast, Turkish exports to Germany of some $14 billion made it the No. 1 destination for foreign sales, ahead of the U.K., Italy then Iraq.

German Interference

Turkey’s Foreign Ministry on Thursday accused Germany of meddling with the independence of its judiciary system by criticizing the arrests, saying statements by German government officials “directly interfere with Turkish judiciary” and are “unacceptable.” Germany is “harboring various groups of terrorists who have been targeting our country and preventing their trial before justice,” the ministry said, in a reference to supporters of the Gulen movement whom Erdogan accuses of orchestrating a failed coup attempt a year ago.

Amid reports that Turkey is blacklisting German firms, Juergen Hardt,  a senior foreign-affairs lawmaker for Merkel’s party, warned that Erdogan is alienating investors and said the Turkish economy will suffer as a result.

While a change in Turkish policies can come only “from within,” the European Union and NATO should apply economic and diplomatic pressure to get Turkey to respect human rights, Hardt said on Germany’s ZDF public television.

“NATO and the economy, these are the two levers with which Erdogan can possibly be influenced,” said Hardt, the parliamentary foreign-affairs spokesman for Merkel’s Christian Democratic-led bloc. The Turkish president, said Hardt, “is absolutely irrational from my point of view, he is hurtful to his country.”

Separately, Thursday’s edition of Handelsblatt reported that a list was handed to the Federal Criminal Office containing “dozens” of companies including Daimler AG and BASF SE that are accused by Turkey of supporting terrorism.

“We should emphasize the fact that the Turkish people and perhaps also the political friends of Erdogan in the AKP recognize that this is a dead end that their president is treading,” Hardt said, referring to Erdogan’s party.

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