While the EU accession negotiations with Turkey are frozen, the economic and trade relations between the two – built mainly upon the Customs Union (CU) – remain vibrant. Nevertheless, the CU has been increasingly considered inadequate by various politicians and experts on both sides due to the rapidly changing economic and trade international environment. By and large, it is accepted that an upgraded/modernised CU can benefit the EU in political and regulatory terms, while Turkey can improve its welfare and its standing to international trade negotiations and competition. Greece, in turn, can also benefit economically from an upgraded/modernised CU in various sectors directly or indirectly, including agriculture, public procurement, FDI and tourism. However, there seems to be a widespread lack of willingness on the part of Greek politicians to consider giving the green light for negotiations between the European Commission and Turkey as well on the part of Greek bureaucrats, business elites and analysts pushing for a positive economic agenda with Turkey. The main reason is that security concerns override economic calculations. This is due to the fact that any investment of political capital by Greek politicians on this endeavour translates into instant losses in their public image due to Turkey’s aggressive behaviour towards Greece at the moment, while economic benefits deriving from an upgraded/modernised CU are only potential and long-term. Hence, Greek-Turkish relations are in a Catch-22 situation in that matter at hand. Greece will not support the opening of negotiations for the modernisation, while Turkey keeps threatening it, and Turkey will not abdicate from its aggressive and maximalist positions, while it feels alienated by the EU in global trade developments. Although security and political concerns in Greece override any discussions over economic relations with Turkey the governing party along with the parties of the major and the minor opposition appear receptive to sound out the possibility of an upgraded Customs Union provided that certain political conditions will be also attached to it, namely the incorporation of certain issues of particular importance to Greece, most notably related to security, defence, and migration.

You may find the Policy Paper, by Prof. Panayotis Tsakonas, Senior Research Fellow of ELIAMEP, Head of the Security Programme, and Dr. Athanasios Manis, ELIAMEP Research Fellow, here.

This Policy Paper was funded by the Centre for Applied Turkey Studies (CATS) of the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik/SWP).