Turkey: Fate Of Turkish Stream Pipeline After 7 June Elections – Analysis

By Kerim Has

The results of the parliamentary elections held on 7 June 2015 set a kind of benchmark for the new realities on the Turkish domestic and foreign policy scene which may force a reassessment of Ankara’s relations with regional and global players. Following the election of Turkey’s Speaker of Parliament, the negotiating process between the parties on forming a coalition government has begun. In this context the trend that has seen Russia and Turkey move closer together over the last 10 years may experience a slowdown. The increased political risks accompanied by a rapidly changing political situation on the one hand and by Russia’s strategic interests and updated energy policy on the other, are making their mark on the implementation of the Turkish Stream pipeline. It may therefore be helpful to classify the main political risks for Ankara under the headings of “internal” and “external”.

Internal risks

The election results ensured that a coalition would come to power and put an end to the 13-year one-party rule of the Justice and Development Party (AKP), which was the main architect of the policy that brought Russia and Turkey closer together than ever since the collapse of the USSR. Such a change in a state’s internal political scene undoubtedly means firstly that it will take longer to get through the negotiating process and to make decisions on long-term and strategic projects, including energy projects.

The Republican People’s Party (CHP), which, like the AKP, broke through the ten per cent barrier, entered Parliament having already announced at the pre-election stage that it intended to reassess Russia’s construction of the Akkuyu nuclear power station in Mersin, and later to possibly cancel it.[1] Obviously, if members of the CHP end up in the government, the Turkish Stream project may become the second target and even if it doesn’t, it won’t get the green light immediately.

If the Nationalist Movement Party (MHP), which also entered Parliament, becomes involved in a coalition, it will probably embark on a course of moving closer, primarily, to states in the so-called Turkic world and toughen its stance on the claims of the “Armenian genocide”, which in turn would distance Ankara farther from a Moscow which has a strategic relationship with Yerevan, more so since the relations between the two states grew even warmer at the end of April 2015 when Vladimir Putin visited Armenia. Moreover, the MHP’s election manifesto includes the idea of creating a Turkic World Energy Council.[2]

The People’s Democratic Party (HDP) is the last of the four parties that gained enough votes to enter Parliament. It positions itself as the representative of the Kurdish people and has organic links with the Kurdistan Workers’ Party (PKK), which is recognized as a terrorist organization in Turkey and the EU, and also in the USA. Russia, however, does not take this view and does not list the PKK as such.

In the same vein, the destabilization of neighboring Syria and Iraq is proving the best possible way of increasing support for the PKK in the Kurdish regions of these states and for the possibility of consolidating their position there in order to create an autonomous region, in view of which the main goal adopted by the HDP will probably be to do whatever it can to secure the “legalization” of the PKK in other countries. If this were to happen, the establishment of strong links with the West and the EU could give the PKK great freedom of action in the region. In that case, it would not be possible to count on the HDP’s strong support for the Turkish Stream, which the USA and the EU are against.

Secondly, the coalition government may not have a long life, a reality that could lead to political uncertainty within the country. The short-term nature of the coalition government is primarily explained by the fact that all the parties that have entered Parliament have fundamental disagreements on many internal and external political issues. Early elections at the end of 2015, or at the beginning of 2016, therefore cannot be ruled out. This effectively means that no government that comes to power will be able to sign a final agreement on the construction of the pipeline, an inaction which in turn will have a strong impact on Turkey’s regional energy policy.

Thirdly, the main objective for any coalition government will be to normalize the internal situation, reduce social polarization and restore the economic situation. This is mainly explained by the complex internal political situation which has emerged in the last two years, beginning with the Gezi Park events and the corruption scandal that unfolded at the end of 2013, coupled with the subsequent steps taken by the state’s leadership in the legal sphere. The decline in foreign investment and the slowdown in GDP growth, together with the level of the country’s foreign debt, which reached its historic appex at 392.8 billion US dollars[3], are becoming one of the most tangible economic problems in Turkey. This will obviously lead to the possibility of the state’s policy moving into an “introverted phase”, while the process of making decisions on the Turkish Stream pipeline and other regional projects may be delayed.

External risks

In view of the difficult situation that has recently emerged in the region, Ankara’s foremost concern has been ensuring its own security, and this has been shaping the development of the state’s foreign policy. Firstly, the increased activity of ISIS directly south of Turkey’s borders with Syria and Iraq, and the existence of a number of economic and political factors are forcing the government to move closer to its western partners. This will obviously have an impact on the development of Turkish–Russian relations and will put Ankara into a difficult position, in which it will have to withstand the pressure being applied by the West while striving to keep Moscow a strategic partner.

Secondly, whether the Turkish Stream is built will mainly depend on the future relationship between Moscow and the West as a whole, and not so much on the bilateral relationship between Turkey and the Russian Federation. Ankara in turn is trying to include the EU in the negotiating process and to make it a part of the multi-billion project, but it is too early to start talking about the beginning of a serious energy partnership between Gazprom and the EU. Moreover, the existing “burden of responsibility” of the new government must be taken into account: in the near future, the new government is hardly going to want to be party (in one way or another) to direct and indirect changes to the energy map of the region, which encompasses Turkey and the EU. Nevertheless, the coalition will most likely not start aggravating the relationship with Moscow against the background of the continuing crisis in Ukraine, and will prefer to wait for a reduction in tension between Russia and the West before it starts making specific decisions on the Turkish Stream project.

Thirdly, Ankara’s relationship with its “near abroad” needs to be taken into account. In this context Greece and Macedonia are transit countries through whose territory it is proposed to lay the pipeline. It is clear that the political and economic situation in Greece and the ethnic and religious risks that have emerged recently in Macedonia could influence the fate of the Turkish Stream. In addition, the fact that the new coalition government and Moscow may have differing views of their relations with Athens and differing interpretations of the events in Macedonia cannot be ignored. Therefore, Ankara defining the state position on its new foreign policy, especially with regard to the Balkans, will be an additional factor making the negotiations difficult. It seems that concrete progress may be achieved only on the first string of the pipeline, which is due to bring Russian gas to Turkey from the Trans-Balkan pipeline crossing Ukraine’s territory.

Fourthly, it must be stated that Turkey’s lack of understanding of Moscow’s overall energy strategy and of the Russian position on the question of the proposed gas pipeline and its implementation will substantially complicate the negotiating process. Ankara does not have a clear picture of what plans Moscow is building in connection with the construction of the project. Turkey does not rule out the fact that the Kremlin could possibly move closer to the West and resume construction in the near future of the South Stream, which many experts in Ankara believe has not been cancelled but suspended. Here, it seems that Moscow cannot make fully effective use of the levers of “soft power” in joint Turkish–Russian projects. The construction of the nuclear power station in Mersin could be seen as a clear example of this. Moreover, it is impossible to say with any certainty that there is a positive perception of these projects both in Turkey’s bureaucratic apparatus and in its media and public. This is due to the fact that the oil and gas sphere is already making Ankara dependent on Moscow, and therefore there is a negative perception of the idea of increasing that dependence. There is also a view concerning the vulnerability of the nuclear power station being built by Moscow and the difficulty of ensuring environmental safety at its construction site. If Moscow cannot resort to the use of “soft power” on the issue of the Turkish Stream either, it may become more difficult to make specific decisions on the project, and the negotiating process itself may be exacerbated.

Fifthly, the interpretation of the very term “threat” could change in Turkey’s foreign policy rhetoric when the new government comes to power. The regional crises that have occurred in the recent past, namely in Georgia (2008-), Syria (2011-) and Ukraine (2014-), have shown that the existence of diametrically opposed points of view on their causes and on the methods of resolving them should not influence the bilateral relations between Moscow and Ankara. Today it can be stated that the existence of the aforementioned regional crises has demonstrated the need for a compartmentalization of relations, in which both states have reached an understanding of the importance of pragmatism in their bilateral relationship.[4] The leadership of the Kremlin and of the AKP have relied on this approach. Turkey’s influence in the South Caucasus, in the Black Sea region and in the Middle East is now diminishing in both economic and political terms. This process is recognized not only within the ruling elite but is also very actively discussed by oppositional voices, and that is precisely why the approach outlined above may be reviewed.

Despite the “institutionalization” of bilateral relations and the creation of mechanisms such as the High-Level Russian-Turkish Cooperation Council, one cannot say that they have had a positive influence on resolving regional crises. This fact may serve as a reason for the coalition government to embark on prolonging the process of making a final decision on the construction of the Turkish Stream.

The main issues which the sides will discuss in the context of implementing the project will be as follows: Turkey’s dependence on Russian gas, price-setting, Ankara’s role in distributing the gas, the state’s position on the quality of the regional energy hub and also the clear definition of the Turkish side’s responsibility for ensuring the safety of the Turkish Stream. Moreover, the negotiating process between the coalition government and Moscow in resolving regional conflicts in which Russia is directly involved may also influence the fate of the Turkish Stream.

Sixthly, there is a possibility of developing regional projects such as TANAP with the aim of reducing Turkey’s dependence on Russian gas from 60 per cent to a level that is less risky for Ankara. The new coalition government may work more closely with Baku on the question of pumping gas into TANAP, and may also increase the amount of said gas on the local market.

In addition, the energy balance in the region may change following a possible peaceful resolution of the Iranian nuclear issue as a result of the country’s talks with the P5+1. In this context Turkey is becoming the most favorable route for laying possible future pipelines from Cyprus and Israel to the European markets. Moreover, bearing in mind that the situation in Iraq may stabilize in the near future, Ankara’s role in transporting Iraqi gas to Europe could be discussed in a more positive light. Turkey is currently buying gas from Russia via two pipelines: the Blue Stream, on the bed of the Black Sea, and the Trans-Balkan pipeline, which passes through Ukraine.

It should especially be noted that the quantity of gas purchased by Turkish private energy companies via the Trans-Balkan pipeline is less than that which Ankara receives via the Blue Stream. Moscow assumes that the Trans-Balkan gas will flow through one of the four planned strings of the Turkish Stream, while one of the strings will be strictly geared towards the Turkish consumer and the other three towards the European consumer. This will be the point at which the requirements of Moscow and Ankara for implementing the project diverge.

If Russia does not extend its gas transit contracts with Kiev after 2019 and ceases to pump gas through the pipelines leading to Europe via Ukraine, the Turkish energy companies could obtain gas from other sources. Thus, instead of buying gas from the Trans-Balkan pipeline, Turkish private energy companies could obtain gas from other sources, primarily from neighboring states such as Azerbaijan and Iraq. Bearing in mind the high price of Russian gas, Turkish private companies, in view of the availability of a large number of diversified energy resources on the regional market, could take advantage of more favorable offers. The existence of another important factor, namely the reduction in oil prices on global markets, which leads to a reduction in gas prices, should also be taken into account. Considering this, the foreign political and financial situation could come together favorably for Turkish private energy companies, turning them towards the East and the South both literally and figuratively.

For this reason, even if Ankara regards the possible suspension of Moscow’s gas transit agreements with Kiev as risky, the consequences of this happening will in any event be overcome. In addition to this it should be noted that despite the continuing confrontation between Moscow and the West on the question of the Ukraine crisis, Ankara still hopes that this will not have a big impact on its energy cooperation with Russia, and it will continue to receive Russian gas via the Trans-Balkan pipeline under potential new agreements beyond 2019.

In conclusion, it should be stated that although the new political situation in Turkey following the June elections will not cause a critical shift in Turkish–Russian relations in either the positive or negative directions, the election results may lengthen the process of negotiations on joint regional projects, primarily on the Turkish Stream. The decisions made in the future will mainly be shaped by internal and external political risks. It is also obvious that Moscow needs to diversify its relations with its partners and also pursue an “inclusive” strategy with various political and public figures in Turkey, not focusing exclusively on the highest echelon of power. These, it seems, are the obvious realities which Moscow now needs to take into account in its relationship with Ankara.

Note: This piece first appeared in Russian on the web site of the Russian International Affairs Council (RIAC) on 10 July 2015.

[1] CHP Seçim Bildirgesi 2015 (Republican People’s Party’s (CHP) Election Manifesto, 2015), p. 65. // http://yasanacakbirturkiye.com/CHP-SECIM-BILDIRGESI-2015.pdf
[2] Milliyetçi Hareket Partisi 7 Haziran 2015 Seçim Beyannamesi (Nationalist Movement Party’s (MHP) 7 June 2015 Election Manifesto), pp. 244-247. // http://www.mhp.org.tr/usr_img/mhpweb/MHP_Secim_Beyannamesi_2015_tam.pdf
[3] Republic of Turkey Prime Ministry Undersecretariat of Treasury, Press Release, №: 2015/97, 30 June 2015. // https://www.hazine.gov.tr/tr-TR/Duyuru-Listesi-Sayfasi?id=5&nm=28
[4] For a detailed analysis: Özdal Habibe, Özertem Hasan Selim, Has Kerim, M. Turgut Demirtepe. «Turkey-Russia Relations in the Post-Cold War Era: Current Dynamics – Future Prospects». USAK Report No: 13-06. USAK Publications, Ankara, July 2013. pp. 1-74. // http://usak.org.tr/images_upload/files/türkiye%20rusya%20ing%20nete.pdf