The crisis in relations between Berlin and Ankara deepened on Thursday as Germany's foreign minister warned investors against doing business in Turkey and advised Germans it was no longer safe for them to travel there.
Sigmar Gabriel said Berlin would henceforth be pursuing a "new policy on Turkey", including reconsidering economic aid and export credit guarantees it provides for the country.
“We can’t go on as before,” he said at a press conference. “We have to be clearer than before, so the authorities in Ankara understand that their policies are not without consequences.”
The escalation in tensions was sparked by Turkey's arrest of German human rights activist Peter Steudtner, who has been charged with supporting a terrorist organisation, earlier this month. Angela Merkel, the chancellor, this week demanded his release.
But relations have been deteriorating for months amid growing German concern at Turkey’s drift to authoritarianism in the aftermath of last year’s attempted coup.
Berlin has repeatedly protested about the continued detention of Deniz Yücel, a German-Turkish reporter for German newspaper Die Welt, on terror-related charges. In June, Germany decided to withdraw its troops from Turkey's Incirlik air base and move them to Jordan after Ankara blocked members of the Bundestag from visiting them.
The two countries also locked horns during the run-up to Turkey's constitutional referendum in April, when several German cities barred campaign appearances by Turkish politicians. Recep Tayyip Erdogan, Turkish president, accused them of Nazi-like practices, prompting outrage in Berlin.
Warning for citizens
Mr Gabriel said Germany was changing its consular advice for citizens intending to travel to Turkey, saying that the Steudtner case showed “German citizens in Turkey are no longer safe from arbitrary arrest”.
Germany would also review the export credit guarantees it gives German companies doing business in Turkey, as well as investment credits, he said.
“We cannot advise anyone to invest in a country when there is no legal certainty and where companies, even entirely respectable companies, are labelled as terrorists,” he warned. “I can’t see how we as a government can guarantee German corporate investments in Turkey when we’re seeing arbitrary, politically motivated confiscations [of property] there.”
Mr Gabriel added that Germany would also discuss with its EU partners the possibility of cutting pre-accession economic aid to Turkey, provided as part of its efforts to join the bloc.
He said he also supported a proposal from Martin Schulz, leader of the Social Democrats, the junior partner in Dr Merkel's coalition government, to suspend talks on expanding the customs union between Turkey and the EU.
Mr Gabriel said that his comments reflected a joint position agreed with Dr Merkel.
Mr Gabriel's intervention could have an immediate impact on Turkey's economy. Its €26 billion tourist industry depends heavily on German sun-worshippers, who make up 15 per cent of the country's tourism arrivals. While Turkey has seen an uptick in visitors from Russia, the second largest source, after healing relations with President Vladimir Putin, German tourists have already started to shun Turkey, choosing Greece and safer parts of Egypt instead, according to Turkish tourism operators.
One Turkish resort owner catering to the German market, who requested anonymity, said he was concerned the higher cost of insuring and running package tours now that Germany had changed its consular advice would make them uncompetitive.
Germany is also Turkey’s top trading partner, with Turkish exports to the country worth about €13 billion and German imports worth just over €18 billion. Businesses are concerned about the impact of a change in Turkey’s status on trade ties between German and Turkish companies, especially those engaged in logistics and transport.
German leaders have in the past been restrained in their criticism of Turkey, a fellow Nato member. Germany has also been a big beneficiary of the EU-Turkey refugee deal last year which sharply reduced the number of migrants crossing Germany's borders.There are also some 3 million people of Turkish origin living in Germany, making up the country's largest minority group.
Activist arrests
Mr Steudtner was one of 10 human rights activists detained in Istanbul on July 5th at a workshop on digital security and information management. Four were later released pending trial, but the other six, including Mr Steudtner, were remanded in custody, with the judge ruling they presented a flight risk.
Those arrested include Alie Gharavi, a Swedish national, and Idil Eser, director of Amnesty International Turkey.
The detentions were part of a continuing purge of those suspected of involvement in last year’s failed putsch. More than 100,000 public sector employees have been dismissed, tens of thousands arrested and hundreds of media outlets and non-governmental organisations closed down.
Margaritis Schinas, chief spokesman for the European Commission, said the arrests were alarming, adding that they continued a "deeply worrying pattern" of imprisonments of journalists, human rights defenders and opposition figures. "We call for the immediate release of these people," he said.
Turkey gave no immediate response to Mr Gabriel’s proposed sanctions, but Turkish officials have previously said Dr Merkel’s criticism of Mr Steudtner’s arrest amounted to interference in Turkey’s judicial process.
Coveney criticism
On Thursday, Minister for Foreign Affairs Simon Coveney strongly criticised the detention of the six human rights defenders. “The arrest of these human rights defenders in Turkey marks a new low in the deeply troubling trend on fundamental freedoms that we are witnessing in Turkey,” he said in a statement. “The targeting of human rights activists is not an activity we expect to see in a country which respects basic human rights and the rule of law, and I call on the Turkish authorities to release those arrested.”
Copyright The Financial Times Limited 2017