Turkish President Recep Tayyip Erdoğan began his third term in May 2023 with the appointment of Mehmet Şimşek as finance minister and the business executive Hafize Gaye Erkan as governor of the central bank. Both are widely acknowledged and experienced proponents of orthodox economics. The effect of their appointment was to return Ankara to an orthodox economic course. However, the shift in monetary policy was not backed up by structural reforms and the recovery has been meagre. Inflation remains rampant and the currency continues to fall; unresolved economic challenges create economic and political instability and could weaken the country’s security – in particular in light of Russia’s ambitions to expand its influence in the region. The consequences for the EU would be enormous. Turkey needs economic and security cooperation with Europe to secure stability without legitimising the regime’s autocratic course.
About the Author
Dr Yaşar Aydın is an Associate at the Centre for Applied Turkish Studies (CATS).