By the Blouin News Business staff

New Turkey ties with Russia signal move away from E.U.

by in Europe.

Russian President Putin shakes hands with Turkish Prime Minister Erdogan in Strelna near St. Petersburg

Russian President Putin shakes hands with Turkish Prime Minister Erdogan in Strelna near St. Petersburg. Photo: Reuters

Turkey’s Prime Minister and Russia’s President have plenty in common beyond a comparable style in governance. In their bid against the West-based world order they both criticize, the duo is pushing forward stronger economic ties between their countries, primarily in the energy field. By strengthening such relations Ankara intends to move away from the European Union accession process – possibly aiming for an eventual Ukraine-style snub – while it makes moves to become a member of  the Shanghai Cooperation Organization (SCO; also known as the Shanghai Five) comprising Russia, China, Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan. Turkey’s interest in joining is no secret: “You should include us in the Shanghai Five and we will say farewell to the E.U. The Shanghai Five is much better off economic-wise. It is much more powerful,” Recep Tayyip Erdogan reportedly said back in January.

These issues were clearly top of mind at the meeting on Nov 22 between Vladimir Putin and Tayyip Erdogan. The outcome shows that key to them all is located in the energy sector. Turkey is shopping around the region to secure energy resources and to present its credentials to the association members (Tayyip Erdogan signed energy deals in Azerbaijan on Nov 13 as well). Russia and Turkey’s trade volume rose to $34 billion in 2012. (Their stated goal, to reach $100 billion within the next two years, seems a big undertaking even if things are moving their way.) Russia competes with Germany for the to spot among Turkey’s export markets. In 2012, Russian investments in Turkish exceeded $1.57 billion while Turkish investments in Russia reached about $740 million. Clearly Russia holds the upper hand.

However, the big test will come when Turkey’s first nuclear power plant, near the Mediterranean port of Mersin, kicks off sometime between 2019 and 2022. Russia’s state-owned atomic energy company Rosatom via its Turkish subsidiary Akkuyu NPP is in charge of building the plant. Putin wants to make sure he oversees the project – and guards Russia’s position there – since once it starts operations Turkey will increase energy self-sufficiency. Currently supplies from Russia cover 56% of Turkey’s demand in natural gas; Turkey’s power plant goal is to produce 10% of its electricity needs by 2023. But Russia wants more and is pressing Turkey to flesh out the nuclear power plant project with tax incentives and guarantees of long-term electricity purchases.

Putin and Tayyip Erdogan also attended Nov 22 the fourth meeting of the High-Level Russian-Turkish Cooperation Council, established in 2010; the two leaders signed several trade agreements. Putin also confirmed plans to construct an offshore section of the South Stream gas pipeline in Turkey’s economic zone in 2014. Through the pipeline Russia will tighten its grip on Balkan energy supplies and strengthen its influence in southeastern Europe.

The leaders’ attitudes suggest that the bilateral relations between both countries are at a strong point and hints that they will continue to grow in the upcoming year. The history of conflict between both nations – and still present today, most notably on the question of Syria – is easily put aside in the name of economic cooperation.

If Turkish-Russian relations are able to maintain this momentum (and strong, amicable progress on the Akkuyu plant will be a key driver of that), Turkey’s dream of being a member of the SCO could come to realization much sooner than expected, leaving the E.U. asking itself again where it went wrong.