Erdogan matters

The CEC plans to officially announce the final results of both the presidential and parliamentary elections by June 1. According to the results of the parliamentary elections on May 14, the Republican Alliance coalition, the backbone of which is the Justice and Development Party led by Recep Tayyip Erdogan, retained a majority in parliament. For Turkey, it was a choice between "East and West." We can say that it was about choosing values, as they look today in the "Western" and "Islamic" dimensions.

It was not easy for Erdogan to keep his post. Opposition candidate Kemal Kylychdaroglu called on every citizen to take part in the elections "in order to free himself from authoritarianism." The opposition was leading in major cities. According to the results of the first round, Erdogan was ahead of his main rival by only 2.5 million votes. The same number of voters voted for Sinan Ogan, the third contender for the post of head of state.

It was he who became the intrigue of the second round of elections. Ogan was expected to urge supporters to vote for Kilychdaroglu, but after talking to Erdogan, he assured the president of support, based on the "principles of statehood." Erdogan thanked and stressed that "there was no bargaining," the correspondent of The Moscow Post reports.

But Umit Ozdag, the leader of the Victory Party - the backbone of Ogana's nationalist coalition, came out in support of Kılıçdaroğlu. He said that he would not seek to imitate Erdogan's relations with Putin, but would reconfigure relations with Moscow so that they were "ruled by the state."

Inflation-driven elections

For Erdogan, maintaining his post was not easy and due to high inflation in the country. This was one of the main trump cards of the opposition, proposing to tighten monetary policy. Today, this policy prioritizes economic growth, export orientation, but not blocking inflation.

The president supports an unconventional view, arguing that raising interest rates increases inflation rather than lowers it.

The credit boom supported by the Central Bank is believed to be yielding results, the growth rate of the Turkish economy remains high. Annual inflation, which was 50.5% in March, fell to 43.7% in April. The regulator assures that a soft monetary policy will help bring this figure to 22%.

During the elections, the West exerted unprecedented pressure on Turkey in an attempt to bring down the lira. Bank analysts formed an unfavorable information background, and information about the inevitable weakening of the lira was actively dispersed in the media. Speculators, counting on a further fall in the exchange rate, occupied the lira in the domestic market and bought foreign currency with borrowed funds.

Over the past three weeks, the gold and foreign exchange reserves of the Central Bank of Turkey have decreased from $68 billion to $60 billion, which, combined with a deficit in the balance of payments and foreign demand, puts pressure on the Turkish lira. The Central Bank had to take a number of protective measures to reduce the demand for foreign currency. In particular, allow banks to sell gold bars to individuals.

Erdogan matters

After the first round, one could hear such assessments as, for example, "It does not matter to us [in Russia] who wins - Erdogan or an opposition representative. We will work with the president who will be chosen by the Turkish voter. "

An approach to a neighboring country based only on "pragmatism and mutual benefit" is justified when both candidates for the highest office in that country share this approach. But in Turkey's case, that was clearly not the case. The interests of Russia for some time were in the "risk zone."

As Fyodor Lukyanov, Chairman of the Presidium of the Council on Foreign and Defense Policy, Editor-in-Chief of the magazine "Russia in Global Policy," noted under Erdogan, "Turkey has occupied a unique niche in the Black Sea region, which is fundamentally important today... If personal relations between the presidents of Russia and Turkey leave, then many things will be complicated. "

There are no risks in politics, but in the case of Erdogan, everything was known in advance. Otherwise, how to explain such "investment decisions" as the readiness to finance the Akkuyu NPP project, or plans to rely on Turkey as a gas hub that will help the projects of Gazprom, Russia's main exporter? Turkey has become one of the channels for countering sanctions pressure in imports. The flexibility of Russia's position on extending the grain deal can also be explained by Turkey's interests, as the now-re-elected president formulated them.

Under the sanctions, a certain part of Russian business interests is reoriented to Turkey, as one of the key intermediaries in relations between the Russian Federation and the Western world and its branches, which limit Russian companies in export-import operations. The annual flow of tourists from Russia reaches 7 million people, Turkish airports are open to Russian air carriers.

"Russia and Turkey need each other in every possible area," Erdogan said in a recent interview with CNN. For Russia, Erdogan's victory means a lot. In general, his re-election implies stability on the southern flank of the anti-Russian front. Moreover, the approach is incomprehensible: "it does not matter who wins."

We are talking about Ankara's attitude to the conflict in Ukraine, about its readiness to participate in the normalization of ties between Armenia and Azerbaijan, about Turkey's relations with Iran and Syria, where Russian interests are determined. Erdogan pursues an independent policy without looking back at the United States and the EuroNATO alliance.

Gazprom offers a perspective

Russian President Vladimir Putin, speaking at the Russian Energy Week forum in Moscow on October 12, 2022, proposed creating the "largest gas hub" in Turkey for the supply of natural gas to Europe. The Turkish Stream and Blue Stream gas pipelines can provide exports of up to 48 billion cubic meters of natural gas per year.

Turkey has become the largest buyer of Russian gas, although in 2022 it reduced gas imports and transit from Russia by 18%, to 21.5 billion cubic meters. Turkish Stream in 2022 provided 8.6 billion cubic meters to Turkey, and 12.9 billion cubic meters to European countries. The capacity of the Turkish Stream is 31.5 billion cubic meters (15.75 billion cubic meters for each string).

Blue Stream is the first offshore gas pipeline for Russia, which turned 20 on December 30, 2022. In two decades since its launch, Gazprom has pumped almost 218 billion cubic meters of gas, including 16 billion cubic meters at the end of 2021, which corresponds to the annual capacity of this gas pipeline.

For comparison, the TANAP gas pipeline (part of the Southern Gas Corridor from Azerbaijan to Europe) in 2022 delivered 5.8 billion cubic meters and 11.3 billion cubic meters in these directions, respectively. Russian gas remains Turkey's only source of flexible supplies, although Istanbul has been pushing for discounts for months.

According to experts of the Kommersant newspaper, Gazprom may have been able to reduce the price in exchange for an increase in gas sales through Turkey to Europe, for which there are now looking for ways to organize gas swaps with Azerbaijan and Iran. The existing infrastructure theoretically allows organizing such swaps in the amount of 8-10 billion cubic meters per year.

It is also noteworthy that Moscow and Ankara agreed to postpone gas payments by $600 million until 2024, Reuters reports, citing sources. It is noted that Turkey may receive a deferral for other similar payments, depending on the dynamics of energy prices. According to sources, we are talking about a total of four billion dollars.

Turkish Energy and Natural Resources Minister Fatih Donmez said on May 3 that Ankara had discussed with Gazprom the postponement of some payments after the increase in gas prices. According to him, the parties managed to reach an agreement.

Challenging, consistent and reliable

Vladimir Putin sent a congratulatory telegram to Recep Tayyip Erdogan on the occasion of his election as president of Turkey. He called Erdogan's election victory "a natural result of selfless work as head of the Turkish Republic,... efforts to strengthen state sovereignty and pursue an independent, independent foreign policy. "

Putin assured Erdogan that the Russian authorities highly appreciate his personal contribution "to strengthening friendly Russian-Turkish relations, mutually beneficial cooperation in various directions."

The Russian President confirmed his readiness to continue a constructive dialogue on topical issues on the bilateral, regional and international agenda. He assured that Russia attaches great importance to the consistent implementation of the planned joint projects, primarily the construction of the Akkuyu NPP and the creation of a gas hub in Turkey.

Speaking last year at a plenary meeting of the Valdai International Discussion Club, Putin called Erdogan a strong leader and a difficult, but consistent and reliable partner.