Erdoğan reloaded: What to expect and what should the EU do?

Starting talks on the modernisation of the EU-Türkiye Customs Union is the most effective way to gain leverage over Ankara, improve relations and support civil society and other democracy actors.

In an election that was not fair or entirely free, Turkish President Recep Tayyip Erdoğan won a third five-year term following a tightly contested run-off on 28 May. His ruling Justice and Development Party (AKP)-led Nation Alliance also secured a majority in the parliament, although it falls short of the required threshold for constitutional changes.

While much of Erdoğan’s rule will remain the same, the urgent need to address Türkiye’s economic crisis could generate changes in domestic and foreign policy. Erdoğan’s ambition to regain Istanbul and Ankara from the opposition in the March 2024 municipal elections makes improving living standards crucial. This could forge a stronger link between economic and foreign policies, opening the door for a more cooperative and less transactional relationship with the EU, given the economic importance of the EU to Türkiye. The EU should not miss this opportunity to regain some leverage on Ankara and initiate talks to upgrade the EU-Türkiye Customs Union - subject to Türkiye meeting a set of benchmarks.

All about the economy

Rebooting the economy is Erdoğan’s top priority. This is reflected in his new government, which is more technocratic, moderate, and competent than its predecessor. Appointments seem primarily driven by economic needs and aim to consolidate voter confidence ahead of the municipal elections as well as lure foreign investors back to Türkiye.

Mehmet Şimşek, a former Deputy Prime Minister and Finance Minister who enjoys international credibility, has returned as Treasury and Finance Minister. He will need to put an end to the unorthodox and destabilising economic policies that are mainly responsible for Türkiye’s economic woes. The appointment of former Wall Street executive Hafize Gaye Erkan as Central Bank Governor, the first woman to hold the post, and Cevdet Yilmaz, an orthodox economic manager, as a Vice President reinforces Şimşek’s core team.

Still, it may prove challenging to quickly restore investors’ confidence, particularly as Erdoğan is unlikely to be keen on quickly implementing vital austerity policies due to the upcoming elections. Thus, it remains questionable whether Şimşek will receive the autonomy he requested from Erdoğan to manage the economy. If not, there could be a parting of ways for a second time. It is important to remember that in Türkiye’s presidential system, Erdoğan holds the ultimate power, significantly limiting the decision-making powers of cabinet members. Furthermore, without the rule of law and freedoms, some investors may continue to have concerns. 

So far, there is little sign that civil liberties and human rights are set to improve. Ankara continues to dismiss European Court of Human Rights (ECHR) rulings that demand the release of political prisoners or drop the charges against Istanbul mayor Ekrem Imamoglu. An increased focus on identity politics, particularly the further demonising of the LGBTQI+ community, and more pressure on civil society are possible.

Linking foreign policy to the economy

On foreign policy, there is likely to be significant continuity. New Foreign Minister, former head of the Turkish National Intelligence Agency (MIT), Hakan Fidan, is one of the leading architects of Türkiye’s new geopolitical engagement. A key member of Erdoğan’s inner circle, he accompanied the president on high-level visits and has carried out crucial backchannel diplomacy in several foreign policy dossiers, including Libya, Syria, Egypt, and Israel.

Under Erdoğan, foreign policy became increasingly autonomous, using a mix of hard and soft power, flexible diplomacy, and hedging between different players. While it has transformed Türkiye into an increasingly influential actor, both in its neighbourhood and beyond, it has frequently clashed with the policies of Ankara’s traditional allies, including vis-à-vis Syria and Libya, and on Russia’s war on Ukraine, where Ankara implements a geopolitical balancing act. While Türkiye has stood shoulder-to-shoulder with its NATO allies in supporting Ukraine’s territorial integrity, condemning Russia’s invasion, and supplying Ukraine with weapons, it continues to do business with Moscow and be a safe haven for fleeing Russians and has not, and will not, join Western sanctions against Russia. Furthermore, weeks away from the NATO Vilnius Summit, Ankara has yet to greenlight Sweden’s membership. Still, foreign dignitaries from 78 countries attended Erdoğan’s inauguration, up from the 30 that came in 2018, underscoring the global perception of Türkiye’s influence.

To attract more foreign investment and trade, capitalise on the restructuring of global supply chains, and create greater fiscal stability, better ties with the West, particularly the EU, which is Türkiye’s main economic and trade partner, are vital. Thus, to look more credible, Erdoğan may tone down his anti-Western rhetoric and be more cautious about decisions that could escalate ties with the West, including in the Eastern Mediterranean, the Aegean, and Cyprus, as well as refrain from helping Moscow circumvent sanctions, to avoid potential economic blowback, and possibly even sanctions.

EU-Türkiye relations

Türkiye-EU relations have been in dire straits for years, and there is no quick fix. Erdoğan undoubtedly presents challenges as a partner, but, given Türkiye’s size and growing geostrategic importance in an increasingly fragmented world, EU leaders are compelled to engage. Hence, the positive post-election messages from many EU leaders, including French President Emmanuel Macron and German Chancellor Olaf Scholz, who invited Erdoğan to Berlin.

Türkiye-EU relations have become increasingly transactional, the EU-Türkiye Migration Statement being the best example. However, this is not in the EU's interest, as over the years, the Union has gradually lost its leverage on Ankara. While Türkiye’s membership talks are presently frozen, it would be short-sighted to terminate this process entirely at this point. Such a decision would be driven by populism and lack substantial benefits. The accession process still holds significance for millions of democrats in Türkiye, along with civil society, which receives crucial financial support from the pre-accession funds mechanism.

The EU has other options to make it more relevant again. Namely, the modernisation of the Türkiye-EU Customs Union - a priority for Ankara - along with progressing visa liberalisation. Both require benchmarks, encompassing not only technical aspects but also the rule of law and fundamental rights. The EU should utilise these tools sooner rather than later to foster progress - albeit limited - in Türkiye. The Customs Union modernisation would be mutually beneficial and enhance EU leverage on Türkiye.

While re-energising the visa liberalisation process is more challenging, given the growing numbers of Turks seeking to move to EU countries, it can have a similar impact. Many Turks, including renowned artists, businesspersons, and university students, face significant challenges in obtaining Schengen visas. Applications are frequently unjustifiably rejected by the EU. The current visa rejection rate for Turks is five times higher than that for Russians. Many are rejected despite having acceptances from prestigious universities or approved internship applications for EU institutions. Such rejections go against European values and should be recognised as a significant human rights issue. While some argue that visa liberalisation should be off the table while human rights remain under attack, given EU plans to extend visa liberalisation to the Gulf countries, this seems hypocritical. At the very least, the EU should prioritise granting visas to specific groups of people (students, artists, businesspeople).

There are other opportunities to further cooperation too. The Türkiye-EU Migration Statement needs updating seven years after its inception. This includes strengthening EU support for Syrians' long-term integration prospects in Türkiye. In addition to the EU-Türkiye high-level Dialogue on science, research, technology, and innovation, the EU should restart such Dialogues on energy, economy, and transport, particularly given the increased cooperation in these areas. Furthermore, given the common security challenges that both the EU and Türkiye face in the wider neighbourhood, not least due to Russia’s full-scale invasion of Ukraine, restarting the high-level Dialogue on Common and Foreign Security Policy (CFSP) should be a strategic priority.

It is also vital that the EU increases support to Turkish civil society, which is an important partner, providing much-needed funding and technical assistance. Despite all the challenges, civil society continues to play an essential role in advocating for the rights and interests of Turkish citizens and in promoting democratic values and good governance. Civil society organisations and hundreds of thousands of young people volunteered during the election campaigns, and they are now pressing for new opposition leaders, and this is happening within the internal dynamics of the country, despite the challenges.

A real Türkiye strategy

The EU must make the most of its opportunity to leverage Ankara and be the geostrategic actor it adheres to be. This will require the EU’s strategic vision and political will, including devising a realistic Türkiye strategy that can help stabilise and improve relations. Starting discussions on modernising the Customs Union is the most effective way to improve relations while supporting civil society and other democratic actors.

Ultimately Türkiye is, and will continue to be, a major challenge for the EU. Yet, despite Erdoğan’s victory, the parliamentary and presidential elections have shown a growing demand for a liberal democratic system. Social opposition’s power is beyond the power of the political opposition. Change is coming sooner or later, and the EU should shape its policies accordingly.


Amanda Paul is a Senior Policy Analyst of the Europe in the World programme.

Dr. Demir Murat Seyrek is a Senior Policy Advisory at the European Foundation for Democracy and Adjunct Professor at VUB.

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This commentary is part of the EPC's Global Türkiye project.