Russia withdraws from South Stream Pipeline project

[Martinus]

I guess Hungarians just have a genetic desire of being someone's bitch.

[Tamas]

I guess Hungarians just have a genetic desire of being someone's bitch.

The weak part of the country does, yes. But that is a general Eastern Euro trait I believe.

[Martinus]

Don't think so. For example, an argument "We should stand with X because they are strong and Y is weak" would not fly in Poland at all. In practice, it may be the case, but openly admitting that would be a political suicide.

[The Minsky Moment]

Edrogan's nuttiness aside, I thought that Turkey was doing well economically?

It is. Though they've gone off the boil a bit since the crash and had some very weird policy flips in that period too. But they're done with the IMF program, very solid growth, low unemployment and for Turkish standards low inflation.

Admittedly part of that's because Turkey used to be a basketcase. In the late 90s, early 2000s Turkey would have inflation at almost 100% and at times spent 90% of revenue covering the interest on their debts. But to an extent they've done the easy bit (admittedly something that eluded many other Turkish governments). Getting from GDP per capita of around $10 000 and 17th biggest economy in the world to $25 000 and in the top ten (what Erdogan says Turkey should aim for in the medium-term) is more difficult. I think they weathered the cash very well but I remember there were some very, very odd decisions made by the Turkish central bank at the time or maybe just after.

There are worries though. There's a lot of structural reform that's still necessary, Erdogan seems to almost ideologically believe in low interest rates (and a lot of decisions are politicised) and, like with other developing countries, a lot of the money in Turkey has sort of sloshed there from the rest of the world and could very rapidly slosh out again if things went awry.

I would put more emphasis on the qualifications in the second two paragraphs than on the positive judgment in the first.

The interest rate obsession is more than just a belief, it is a full-fledged nutty conspiracy theory with a very serious political consequence in political pressure being exerted overtly to subvert the central bank and undermine its credibility.  The current account remains a problem although it looks like low energy prices are going to bail them out.  The trend growth rate is down and unemployment has been trending up.

[Malthus]

Russia also wants to quadruple trade with Turkey, and they're building Turkey's first nuclear reactor.

Russia wants to shackle itself to as many corpses as possible.

Edrogan's nuttiness aside, I thought that Turkey was doing well economically?

A large part of the growth was fueled by (partially public funded) construction projects of which Erdogan's cronies profited disproportionally, but that has been stagnant for a while now.

Between Erdogan's rhetoric, Turkey's inaction towards IS and economic cuddling up to Russia, I wonder if this will set Turkey on a long term course away from the West and towards the nascent Eurasian Union. With Turkey's accession to the EU being very unlikely at this point, I wouldn't be surprised if they joined the new club if offered the chance.

Heh, I wonder how Putin's neo-Romanov-ness is going to fly with Erdogan's Islamicism.