The Economic rationale behind Turkey-Greece Tussle.

The relation between neighbour Turkey and Greece are at a very delicate juncture. Turkey, with its comparative military and economic advantage, is trying to bend the rules of the game in its favour. Both the countries are at the loggerhead due to the gas exploration mission sent by Turkey in the area between Cyprus and Greece controlled Crete island. Both countries claim this area of the sea as their exclusive economic zone.

The Aegean Sea lies between Greece and Turkey have a large number of Islets. Some of these areas around the islets are claimed both by Greece and Turkey. The primary reason for controlling an island by a country is to extend reach beyond its mainland and attain legitimacy to explore rich natural resources in and around the island. Although historically both the nations do not share a friendly relation vis-a-vis islets (claimed by both) in the Mediterranean sea.

A deal between Turkey and Libya to create an Exclusive Economic Zone (EEZ) soured the relation between Turkey and Greece. The EEZ created by Libya and Turkey overlaps with the area (Crete Island) under the control of Greece. To counter this, Greece signed a deal with Egypt to create an EEZ which overlaps, though not entirely, with the region under Libya-Turkey EEZ and area claimed by Turkey as its EEZ.

Greece-Turkey-Cyprus

The latest row between the two countries is due to the issue of the continental shelf. Greek island Kastellorizo is situated at 2km from the Turkish mainland. According to International law, the country has exclusive rights over its continental shelf. The continental shelf of Kastellorizo is exclusive to Greece and entry of Turkish ship in the continental shelf, against the will of Greece, is illegal. Due to the overlapping of EEZ between Greece, Cyprus and Turkey, Turkey denies these allegations and claims that it also has right over the natural resources in the Agean and Eastern Mediterranean sea.

Turkish aggressive Gas exploration activity and renewed hostility towards Greece and nations supporting Greece are due to the economic necessities and difficulties faced by Turkey in the wake of developing international situation. The same applies to Greece when it counters the Turkish overreach.

Immigrants.

The ongoing war in Syria and Iraq caused a large number of immigrants to move towards Turkey. The people of war-torn Syria and Iraq to save their lives are looking for safe havens where they can be accepted and allowed to live a dignified life. Turkey is the nearest and the safest destination for these people due to two prominent reasons. First, Turkey is a Eurasian nation, which provides immigrant a safe passage to Europe, if they want to, and second, the Turkish ruling government’s sympathetic view towards immigrants especially Muslims.

The immigrant influx from neighbouring war-torn countries (Syria and Iraq) taking a toll on the economy of Turkey. Turkey needs uninterrupted energy supplies to maintain large refugees inside its border. 

The incoming immigrants have increased the pressure on the Turkish economy. This pressure is pushing the Turkish government for the rapid development of natural resources in the Aegean sea/Eastern Mediterranean and improve its economic health.

Muslim World’s Leadership.

Another reason for the recent strain Greece-Turkish relation is the Turkish ambition of leading the Muslim world (Ummah). It is an open secret that Turkish wants to replace the Kingdom of Saudi Arabia as the Muslim world leader. To become a leader, Turkey not only requires to represent Muslims cause across the globe but also need to be an economic powerhouse. Energy independence is one of the foremost requirement for swift improvement in economic well being. 

Turkey imports nearly three-fourth of its energy requirement. Approximately 40% of its energy imports come from Russia. Its energy import is a prominent source of Current Account Deficit and debt. Turkey’s long term contract for gas supplies with Russia, Iran and Azerbaijan is going to expire in the current year, which means renegotiations with these countries to continue gas supplies must be ongoing. Renewal of these contracts, with a slight increase in the cost of gas, would definitely increase the burden on the Turkish economy.  

To subsidized such an impact on the economy, the Turkish government is ready to take a calculated risk by exploring the gas reserve in disputed territorial waters of Aegean sea. The ambition of Turkey in the Muslim world requires huge dollar reserve and robust economic growth.

Israel and China factor.

Greece-Turkey tussle and its economic rationale.

The state of Israel has significant influence over the littorals of the Mediterranean sea. Israel is the closet alley of the USA and is now in the process of normalizing relationships with the Gulf countries barring Iran. Israel can jeopardize Turkish economic interest in the region by actively supporting Greece and Cyprus. Turkey’s economic development and solid military posturing are must for deterring Israel. A Turkish seismic research ship, the Oruc Reis, began surveying parts of the eastern Mediterranean that’s disputed by Cyprus and Greece in July. Turkey overtly warned Greece and Cyprus and others supporting them against hindrance in gas research. Turkey used this event to show it preparedness for war to protect its interest especially to Israel and the US.

Over the past years, the relationship between the US and Turkey has soured due to various reasons. One of the reason is Turkey’s closeness with Russia and China. China is trying to expand its trade relations with the countries in the Middle-East and Eurasia. The improved economic relationship with China partially secures the financial interest of Turkey, in case sanctions are imposed on it by the European Union. China behind the curtains needs a bit of tension in the region to further its interest and expand footprints. Chinese support is one of the factors in Turkey’s stringent position against EU and NATO members in the dispute.

Turkey’s attempt to explore gas in the Eastern Mediterranean and the Aegean Sea is a well-calculated step with the aim of long term economic development and independence.

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