The Turkish meltdown is a golden opportunity for the Kremlin to further its goal of breaking up Nato and loosening the alliance that Washington has been trying to build to contain Russia’s European ambitions.

The Kremlin has long had a very angry bee in its bonnet about Nato’s expansion eastwards. The recent announcement that Macedonia is to join the military bloc caused outrage in Moscow. It was already protesting that promises made to Mikhail Gorbachev by virtually every Western leader at the start of the 90s have been broken. Russian President Vladimir Putin complained loudly about the breached pledges in his now famous 2007 Munich Security Conference speech and recently declassified documents confirm that Gorbachev was indeed given verbal promises, although nothing was put on paper.

Turkey has been a Nato member for six decades and it is a key piece in the West’s security arrangement as a leading foothold in the Middle East. It even hosts part of the US nuclear arsenal. However, with the EU failure to admit Turkey to its trade club, relations with Western powers have been decaying for years. Now they are approaching breaking point.

Turkish President Recep Tayyip Erdogan has had his issues with Russia, which imposed painful economic sanctions after Turkey shot down a Russian fighter-bomber over the Syrian-Turkish border in November 2016. But Moscow has been working hard to drive a wedge between the West and Ankara. US bullying since Donald Trump took office has gone up a notch and the thin-skinned Erdogan has not taken it at all well. In particular, Washington’s refusal to extradite Erdogan’s nemesis and Muslim cleric Fethullah Gulen from his home in Pennsylvania has been a major source of friction. Ankara’s aggressive political campaigning among expatriate Turks living in Western Europe, and Germany in particular, has been another source of strife. That and Erdogan’s treatment of basic human rights during the two-year-long state of emergency declared after the July 2016 attempted coup, which he blames on Gulen, led to some sanctions from Berlin and the grinding to a halt of Turkey’s application to join the EU.

Differences over Syria and Russian defence deals
Turkey’s interests in Syria, meanwhile, are totally misaligned with Washington’s: Ankara has been fighting Kurdish rebels that claim land in the east of the country, but to Turkey’s fury Washington has been backing (and supplying) the same forces as the most effective fighters against Islamic State (IS) terrorists in Syria and Syrian President Bashar al-Assad’s government forces.

Putin’s offer to supply both advanced Sukhoi fifth-generation fighter planes as well as Russia’s highly advanced S-400 SAM system, and Erdogan’s acceptance of the offer, could be the issue that breaks the camel’s back. There is nothing in Nato rules that preclude a country from buying non-Nato compatible weapons systems, but Washington has been very unhappy with the decision, threatening to cancel a contract to supply Turkey with advanced F-35 fighter jets if the Russian deals go ahead.

Trump upped the ante last week by slapping a 50% tariff on Turkish steel exports on the same day that the lira went into free fall. The Turkish economy subsequently tipped over into a full-blown currency collapse that threatens a debt and liquidity crisis, presenting Moscow with a golden opportunity.

”To further reduce imports of steel articles and increase domestic capacity utilisation, I have determined that it is necessary and appropriate to impose a 50% ad valorem tariff on steel articles imported from Turkey, beginning on August 13, 2018,” Trump said in a statement released by the White House on August 10.

Commerce secretary Wilbur Ross confirmed that the US will double the tariff on imports of Turkish steel to 50%, because “the previous level of 25% had not been enough to sufficiently reduce Turkish exports to the US.”

“Doubling the tariff on imports of steel from Turkey will further reduce these imports that the [commerce] department found threaten to impair national security,” Ross added.

Ankara suggests it may pull out of Nato
Ankara immediately started making comments that it may pull out of Nato as a result of the US actions and throw its lot in with Moscow, which would be a disaster for the West. There are also rumours coming out of Moscow that the Kremlin is offering a small bailout to Ankara if it agrees to order the bases in Turkey hosting US forces, such as the Incirlik air base, to close: Putin and Erdogan talked by phone on August after the US metal sanctions metal were announced.

Erdogan has hit back at Trump with an opinion piece in the New York Times, in which he wrote: “Before it is too late, Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives. Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies.”

The criticism of US “unilateralism” has been getting increasing play recently. Putin has long complained of American unilateralism and the central tenet of his foreign policy is to create a “multilateral” world, with a body like the UN coordinating international affairs – an objective that is shared by Beijing. Last week, the Kremlin openly criticised Washington for declaring “economic war” on Russia with another round of sanctions. Iranian Foreign Minister Mohammad Javad Zarif, meanwhile, lambasted Washington saying its planned ban on buying Iranian oil will fail because the world is “sick and tired of US unilateralism.”

"The countries currently the US is negotiating with have told Washington that they will continue their oil purchases from Iran," Zarif was quoted as saying. China, Turkey and EU member states are among nations that have so far made it clear to the US that they will continue buying Iranian oil and conducting other business with the Islamic Republic.

Echoes of Vilnius 2014
The situation now looks very similar to the run-up to the EU’s Vilnius summit in 2014 where the EU was trying to persuade then Ukrainian president Viktor Yanukovych to sign off on an Association Agreement that would have tied Ukraine into the European trade system and taken it out of Moscow’s orbit. At the eleventh hour Yanukovych refused, partly because the EU would not drop its insistence that Yanukovych release opposition leader and former prime minister Yulia Tymoshenko from jail and partly because the EU didn't offer any cash up front to close the deal. Instead Yanukovych accepted an offer from Moscow for a $15bn bailout, of which $3bn was paid immediately in the form of eurobonds that are now in dispute.

Erdogan’s spokesman, Ibrahim Kalin, drove home the growing danger to Nato with a tweet over the weekend stating that "the US runs the risk of losing Turkey as a whole. The entire Turkish public is against US policies that disregard Turkey's legitimate security demands. Threats, sanctions and bullying will not work. It will only increase Turkey's resolve.”

An alliance with Moscow makes a lot of sense for Ankara, especially as Erdogan becomes increasingly more authoritarian. After the late June presidential election triumph that saw Erdogan’s power greatly expanded by a newly introduced executive presidency, the prospects for more clashes with Brussels over Turkey’s already poor human rights record only increased. And the US’s increasingly aggressive use of trade as an economic weapon for its own commercial benefit is creating an “axis of the sanctioned” that also includes China and Iran—with Beijing’s backing this bloc could offer a formidable challenge to Washington’s current hegemony. At a practical level, Russia is already one of Turkey’s largest export markets, but what is missing from this equation, and will give Ankara pause for thought, is its need to finance its $200bn current account deficit.

With Erdogan apparently in denial – he said over the weekend that Turkey would soon emerge from the currency chaos and called on Turks to sell their dollar and gold savings for lira – a Russian bailout becomes increasingly attractive by the day. Turkish officials were in Washington last week and met with the IMF, but given that any bailout loan would need de facto approval from Washington, which sits on the IMF executive board, Russia is one of the few countries Ankara can still turn to for help with its emergency. And if it does turn to Moscow, Putin can be expected to extract his pound of flesh.