This is how Turkish banks putineggano with Russia
After the summit between Erdogan and Putin in Sochi, five Turkish banks have adopted the Russian Mir circuit. All the details and objectives of Turkey and Russia
On the plane returning from his meeting in Sochi with his counterpart Vladimir Putin, the President of Turkey Recep Tayyip Erdogan announced that five Turkish banks have adopted the Mir, the payment circuit managed by the Russian central bank in force since 2017: it was developed by Moscow in response to the international sanctions imposed on it in 2014, after the annexation of Ukrainian Crimea.
THE ADVANTAGES OF MIR
Erdogan presented Mir as a win-win system for both Turkey and Russia. The first needs to encourage the entry of foreign currency – perhaps in the form of Russian tourists – in order to give stability to the lira, heavily devalued by the president's decision . The second, on the other hand, needs to mitigate the economic isolation carried on by the West after the aggression against Ukraine.
RUBLES FOR GAS
In Sochi, Erdogan and Putin also started the process to allow (partial) payments in rubles for Russian gas deliveries to Turkey. Moscow is a very important energy supplier for Ankara: in 2021 it supplied it with about 25 of the oil and 45 percent of the gas of the total imported.
THE AKKUYU NUCLEAR PLANT
Russia then, through the state-owned company Rosatom, is working on the construction of the Akkuyu nuclear power plant, on the Mediterranean coast of Turkey: once fully operational, it is estimated that it will allow 10 per cent of national energy needs to be met. However, the project sparked controversy after Rosatom removed a Turkish contractor.
Erdogan said he will visit the site soon, and that none of the parties involved will accept any delays in the works. By means of transfers worth billions of dollars to a Turkish subsidiary, Rosatom is also supplying Ankara with valuable foreign currency.
THE UKRAINIAN WHEAT
The president also said that the Turkish government is working on an agreement with Russia for the export of cereals. There are dozens of loaded ships blocked in ports on the Black Sea, Bloomberg reports: on August 1, Ukraine made its first shipment of cereals since the Russian invasion, and three other cargoes left its ports last Friday.
BECAUSE PUTIN NEEDS ERDOGAN, AND VICEVERSA
Despite having opposed the invasion of Ukraine , given the important trade exchange, Turkey has not aligned itself with the United States and Europe in imposing sanctions on Russia, preferring to pursue political and economic relations with Moscow.
Before Sochi, Erdogan and Putin met only about three weeks ago in Tehran, Iran. AsForeign Policy writes, the two do indeed have "good reasons to maintain a good working relationship". Through Erdogan, Putin manages to undermine NATO unity and policies, as well as securing a buyer for Russian hydrocarbons. Through Putin, on the other hand, Erdogan succeeds in pursuing a foreign policy unrelated to the constraints of the Atlantic alliance, as well as guaranteeing the satisfaction of Turkish energy demand.
THE TURKISH PLANS FOR SYRIA
Erdogan also needs to coordinate with Putin on Syria. In fact, the Turkish president's plans include the creation of a "security zone" that starts from the Turkish border and extends into Syrian territory for 30 kilometers, approaching the areas of the Russian and pro-Iranian forces present in the country. Ankara's main objective is to create a sort of "buffer" between itself and the Kurds – perceived as a threat to their state integrity – in order to break any continuity between the People's Protection Units (YPG) active in northern Syria and the Kurdistan Workers' Party (PKK).
Behind Erdogan's plans there may actually be domestic political motivations to strengthen his and his party's image ahead of the 2023 elections. Given the growing anti-immigrant resentment in Turkey – picked up above all by the ultra-right by Umit Ozdag, head of the Victory Party -, the president announced the relocation of one million Syrian refugees to the so-called "safety zones" in Syria.
As Foreign Policy summarizes, Erdogan wants to launch a military operation in northern Syria and wants to make sure that Putin's Russia will not intervene to counter it.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/turchia-russia-circuito-mir/ on Mon, 08 Aug 2022 07:45:00 +0000.