A back-channel story suggest that Biden promised that a much-needed $11-13 billion line of credit would be extended to Turkey by the International Monetary Fund.
Joe Biden got what he needed before the NATO summit this week by somehow turning Turkish President Recep Tayyip Erdoğan inside out and getting him to rebuff Vladimir Putin by announcing that he would support NATO membership for Sweden. The public story for Biden’s face-saving coup was talk about agreeing to sell American F-16 fighter bombers to Turkey.
I have been told a different, secret story about Erdoğan’s turnabout: Biden promised that a much-needed $11-13 billion line of credit would be extended to Turkey by the International Monetary Fund. “Biden had to have a victory and Turkey is in acute financial stress,” an official with direct knowledge of the transaction told me.
Turkey lost 100,000 people in the earthquake last February, and has four million buildings to rebuild. “What could be better than Erdogan”—under Biden’s tutelage, the official asked, “finally having seen the light and realizing he is better off with NATO and Western Europe?” Reporters were told, according to the New York Times, that Biden called Erdoğan while flying to Europe on Sunday. Biden’s coup, the Times reported, would enable him to say that Putin got “exactly what he did not want: an expanded, more direct NATO alliance.” There was no mention of bribery.
A June analysis by Brad W. Setser of the Council on Foreign Relations, “Turkey’s Increasing Balance Sheet Risks,” said it all in the first two sentences—Erdogan won re-election and “now has to find a way to avoid what appears to be an imminent financial crisis.”
The critical fact, Setser writes, is that Turkey “is on the edge of truly running out of usable foreign exchange reserves—and facing a choice between selling its gold, an avoidable default, or swallowing the bitter pill of a complete policy reversal and possibly an IMF program.”
Another key element of the complicated economic issues facing Turkey is that Turkey’s banks have lent so much money to the nation’s central bank that “they cannot honor their domestic dollar deposits, should Turks ever ask for the funds back.”
The irony for Russia, and a reason for much anger in the Kremlin, Setser notes, is the rumor that Putin has been providing Russian gas to Erdogan on credit, and not demanding that the state gas importer pay up.
Putin’s largesse has been flowing as Erdoğan has been selling drones to Ukraine for use in its war against Russia. Turkey has also permitted Ukraine to ship its crops through the Black Sea.
All of this European political and economic double dealing was done openly and in plain sight. Duplicity comes much differently in the United States.
This article was originally published on the author’s Substack.
The views and opinions expressed above are the author’s and do not represent those of the Free Turkish Press.
