[Editor’s note: Why would Turkey trade with Russia in dollars in the first place? China does not trade with Russia in dollars. Iran does not trade with Russia in dollars. Nobody trades with anybody in dollars anymore. And since 2014 Russia trades with Europe for gas in either Euros, Rubles or gold.
So how this can “infuriate Turkey’s European “friends,“” is a misnomer. If and when South Stream goes ahead, with a gas pipeline from Russia to Turkey and through Greece to Austria, which looks like it is on the cards, Turkey will trade with Russia in Iira or Rubles and in turn sell the gas to Europe in Iira or Euros or in exchange for other commodities. From what I have heard Austria is fully on board with this deal as is Italy, and more important the Balkans. No doubt the US will see this as an “invasion” by Putin of the Balkans. Germany on the other hand, would no longer be the sole transit point for Russian gas.And this would bypass the need to go through Ukraine at all. Which is more to the point. Southern Europe, the PIGS countries, would no longer be reliant on Northern Europe for any gas delivery. And none of them will be trading in dollars either. With Syria secured, the proposed gas pipeline that would have gone from Qatar and Saudi Arabia through a “balkanized”Syria with Assad gone, is now a pipe dream. Also keep in mind Russian talks with Israel to develop and invest in their offshore gas fields recently, which will also be another supply line to Europe, cutting out Qatar and Saudi Arabia completely. Again trade will not be in dollars.
As for fighting Islamic State, what is never mentioned is the narcotics industry and the flow of opium out of NATO bases from Afghanistan, through Turkey and the Balkans into Europe and into Russia through the Caucuses. Does fighting “Islamic state” also mean cutting off the flow of the narcotics industry and if so, what kind of economic impact would this have on NATO, the CIA, the Pentagon and needless to add, the dollar? ]
from Zero Hedge:
Turkey’s Gunes newspaper, which said that as part of the discussion between Putin and Erdogan on Tuesday, the Turkish president suggested to abandon the US dollar in bilateral trade between Turkey and Russia, and instead to transact directly in lira and rubles. This would “benefit both Russia and Turkey”, Erdogan allegedly said in his August 9 meeting in St Petersburg, adding that this would relieve the lira from the USD’s upward pressure. The reason Erdogan is concerned about exchange rates is because recently Turkish inflation soared by nearly 8% Y/Y, and the recent devaluation of the TRY against the USD has only poured more oil on the fire.
Needless to say, such a bilateral agreement would further infuriate Turkey’s European “friends”, permanently halting Turkish accession into the customs union, in accordance with Austria’s recent demands, and would in turn lead to a dissolution of the refugee agreement that is still keeping millions in refugees away from Europe in general and Germany, and Merkel’s plunging popularity ratings, in particular. Which, incidentally, means that not only Erdogan, but now also Putin, holds key leverage over the career of Europe’s most important politician.
The unexpectedly sharp antagonism between Turkey and the west accelerated today, and one day after NATO preemptively reminded Turkey that it is still a NATO alliance member and advising Ankara that “Turkey’s NATO membership is not in question”, Turkey had some more choice words for its military allies. Cited byReuters, Turkey foreign minister Mevlut Cavusoglu told Turkish’s NTV television on Thursday that the country “may seek other options outside NATO for defense industry cooperation, although its first option is always cooperation with its NATO allies.” Translation: if Russia (and/or China) gives us a better “defensive” offer, we just may take it.
The sharply worded retort came on the same day that Turkey said it will resume airstrikes on Islamic State targets in Syria, and asked Russia to carry out joint operations against its “common enemy.” Ankara halted strikes after the downing of a Russian plane by Turkish forces last year.
In the same interview, Cavusolgu said that Ankara “will again, in an active manner, with its planes take part in operations” against Islamic State targets. Cavusolgu also said that Ankara has called on Moscow to carry out joint operations against the “common enemy” of IS. “Let’s fight against the terrorist group together, so that we can clear it out as soon as possible,” Cavusolgu said, adding that otherwise IS will continue to expand and spread into other countries.
To be sure, coming from the nation which directly engaged in oil trade with the Islamic State, this is at least a little ironic, however, what is notable is the significant pivot Turkey has made vis-a-vis military engagements, rotating not toward the US alliance, but toward the Kremlin.
“We will discuss all the details. We have always called on Russia to carry out anti-Daesh [IS] operations together,” he said, adding that the proposal is still “on the table.” The foreign minister went on to tout the benefits of closer cooperation between Turkey and Russia.
“Many countries are engaged in Syria actively. There could be mistakes,” he said. “In order to prevent that, we need to put into practice the solidarity and cooperation [mechanism] between us including sharing of real-time intelligence.”
The comments came just days after Turkish President Erdogan visited St. Petersburg for talks with Russian President Vladimir Putin, in the first meeting between the two leaders since the plane was downed.