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How Turkey might have ruined its relationship with the EU

  • Top European politicians including Christian Kern and Jean-Claude Juncker were less-than congratulatory towards Turkish President Recep Tayyip Erdogan following the result of last weekend's referendum on his presidential powers
  • Turkey's EU membership negotiations have been underway since 2005. Economic and security cooperation is key for both sides
  • Erdogan's talk of re-introducing the death penalty could be the nail in the coffin for Turkey's proposed EU accession
Turkish President Recep Tayyip Erdogan gives a referendum victory speech to his supporters at the Presidential Complex in Ankara, Turkey.
Elif Sogut | Stringer | Getty
Turkish President Recep Tayyip Erdogan gives a referendum victory speech to his supporters at the Presidential Complex in Ankara, Turkey.

Top European leaders were frosty when reacting to Turkey's referendum Sunday, in which President Recep Tayyip Erdogan bolstered his grip on power.

"(Turkey's EU) membership prospects are buried," Austrian Chancellor Christian Kern said in a statement Monday, while a spokesman for Jean-Claude Juncker, president of the European Commission, called on authorities Tuesday to investigate suspected voting irregularities.

With this following a diplomatic row over campaigning for the referendum's proposed changes in Europe ahead of the vote, it might seem that Turkey has few friends in Europe. Does Erdogan's now executive presidency mean that the European Union's scales of solidarity have tipped against Turkey once and for all?

EU relations: Toeing the line

Turkey's relationship with the EU requires a careful balancing act.

Talks to enable Turkey to join the 28 nation bloc have been in motion since 2005, though according to Robert O'Daly, regional manager for Europe at the Economist Intelligence Unit, prospects of these being successful are "extremely remote." For O'Daly, negotiations are in the doldrums as there is "no real commitment to progress with negotiations" yet "neither side wants me to formally break off."

But following Sunday's referendum, Erdogan discussed a potential fresh vote to re-introduce the death penalty in Turkey, a change which, if passed, would equal game over for EU membership talks. Theodore Karasik, senior advisor at Gulf State Analytics, takes Erdogan's move literally, telling CNBC via e-mail that if passed it will "cement Turkey in the Middle East and away from the European Union." Other analysts CNBC spoke to instead dismissed Erdogan's suggestion as mere rhetoric with little likelihood of actually materializing.

Both Turkey and the EU have vested interests in a successful partnership. The EU is Turkey's largest trading partner, accounting for 44.5 percent of the country's exports according to the European Commission. The two parties' customs agreement is currently being reformed to include agriculture and services. Also in Turkey's interests, the potential for visa free travel with the EU is also on the cards.

Meanwhile, the EU is reliant on Turkey's cooperation to boost security on the continent and address the migrant crisis.

Erdogan has himself suggested that Turkey votes on its potential EU accession. But for O'Daly, much of the president's anti-EU posturing pre-referendum boiled down to rhetoric aimed at whipping up nationalist support. "Erdogan will put all his time and energy into putting (domestic) reforms through," he added.

Leadership in the Middle East

According to Karasik, the referendum result is representative of a broader sea change in Turkish politics, and reflects President Erdogan's international ambitions.

"Erdogan is seeking to capture the hearts and minds of Sunni Muslims throughout the (Middle East) and into Africa," Karasik told CNBC via e-mail.

There is also potential economic opportunity in focusing on the Middle East. Michael Harris, adjunct professor at Syracuse University, described the region as a less competitive market than the EU. "If Turkish companies can get engaged, they should," he told CNBC via telephone.

Significantly, shifting focus eastwards could positively impact Turkey's now ailing tourism industry, which accounted for 12.5 percent of GDP in 2016 according to the World Travel & Tourism Council. Tourism from the Gulf and Iran has "opened up enormously" Harris said, useful as traditional European visitor numbers have plummeted due to security concerns.

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