The German think tank, the German Institute for International and Security Affairs (SWP), has outlined Berlin’s and Brussels’ expectations regarding Ankara.

An assessment by Yaşar Aydın, titled Türkiye on the Road to Autocracy, looks at the Turkish government’s options from Berlin’s perspective following the arrest of Istanbul Metropolitan Municipality (İBB) Mayor Ekrem İmamoğlu.

Aydın highlights the economic dimension of the Erdoğan administration’s operations against opposition-held municipalities, noting that municipalities run by the CHP (Republican People’s Party) house 62% of the total population, generate 73.4% of the GDP, hold 84.5% of total private savings, and account for 79.6% of Türkiye’s total exports.

Aydın states, “Furthermore, the average per capita income in CHP-run municipalities exceeds that of AKP-run municipalities.”

The author suggests this situation gives the CHP a strategic advantage in exerting decisive influence over the economic cycle and thereby creating an alternative sphere of power, emphasizing that construction companies previously doing business with the AKP can now also work with CHP municipalities, making them more “self-confident” in their relations with Erdoğan.

The SWP author adds, “This new economic power of the CHP is particularly important as high credit interest rates have been curbing investment and orders in the construction sector for about two years.”

The SWP analysis argues that the economic instability arising from İmamoğlu’s arrest has significant costs for the government, pointing to both the depletion of Central Bank reserves and rising interest rates.

Aydın argues that Türkiye faces three scenarios going forward: 1. Consolidation of autocracy; 2. Dissolution of the People’s Alliance; 3. An agreement on early elections.

Aydın suggests the first option would create economic instability in Türkiye, arguing that the country needs external resources for economic growth, but the arrest of the largest city’s mayor would create an unfavorable investment climate.

In the second option, he warns that the MHP (Nationalist Movement Party) leaving the People’s Alliance and forming a two-thirds majority with the CHP and DEM Party to dissolve parliament would cause instability. The SWP analyst, pointing out that a CHP-DEM-MHP alliance would be a kind of “motley crew” coalition, does not find this option favorable for Berlin and Brussels either.

According to Aydın, the best option for the EU and Germany is an early election by agreement. In this scenario, İmamoğlu is released from pre-trial detention, and charges against him are dropped, provided the CHP agrees to the dissolution of parliament and new elections.

According to Aydın, this series of events could lead to a more stable political transition process where Türkiye establishes a new electoral system and politically repositions itself under a new president and a CHP-led alliance.

Furthermore, an orderly transfer of power accompanied by political and economic stability would offer an opportunity to reset EU-Türkiye relations and could strengthen the EU’s geopolitical position.

According to the SWP analyst, there are “regional responsibilities” that the EU and Germany expect Türkiye to fulfill, and stability in Ankara is therefore important. These responsibilities are described by SWP as: regulating and countering migration flows; deterring Russia; and helping to stabilize Syria.

According to Aydın, while the US has so far voiced little criticism regarding recent developments in Türkiye, the reactions from EU institutions and Germany have been relatively measured.

Aydın writes: “Two approaches are being debated in Germany: i) avoiding closer security cooperation with the current government, and ii) maintaining relations with the Erdoğan administration through quiet diplomacy that encourages adherence to the rule of law and democratic principles. The second approach is based on the assessment that the EU depends on a stable Türkiye, both as an important NATO partner, especially for deterring Russia, and as a buffer to control migration flows to Europe.”

According to Aydın, while this assessment is correct, it overlooks an important point: In the current geopolitical situation, Türkiye continues to need NATO’s protection to ensure its national security and the EU’s presence as an economic partner and a market for Turkish goods and services to keep its economy on a growth path.

According to SWP, this fact is also highlighted by Türkiye’s continued active efforts to play a key role in the European security architecture, and the same applies to the Turkish defense industry: despite technological advancements, Ankara remains dependent on the EU in many areas.

Aydın states, “It is unrealistic to completely escape this dependency through cooperation with other states or blocs. Indeed, the sustainable development of Türkiye’s defense industry will continue to require close cooperation with EU member states.”

The author concludes: “In this context, Germany and the EU can exert influence on Türkiye by setting the following conditions for increased security cooperation, further integration into the European security architecture, and more cooperation in defense: Türkiye must return to the rule of law, halt its slide towards full autocracy, and respect human rights.”

Aydın writes that Germany can use negotiations on the modernization of the customs union and visa facilitation as leverage against Türkiye, pointing out that both issues are of great importance for Türkiye, which is trying to improve its domestic investment environment. He notes that the Turkish economy is closely intertwined with the EU economy, and regaining economic dynamism largely depends on deepening these ties.

The SWP analyst’s thesis is as follows: “Türkiye and its industrial sector aim for greater integration into European supply chains; however, if the country continues to slide towards autocracy, its chances of benefiting from reshoring will significantly diminish, creating a substantial economic incentive to reconsider the autocratic path. The EU and Germany can raise the prospect of further integration of supply chains while warning the Turkish government against progressing towards autocracy.”

The European Commission is considering adjusting sustainability rules to help defense companies secure private financing and raise cash from investors.

This could provide relief to arms manufacturers and other defense companies across Europe who have blamed environmental, social, and governance (ESG) investment criteria for deterring large private investments, as part of broader EU-backed efforts to boost arms production across Europe.

Commission spokesman Thomas Reigner told Euractiv on Monday that the Commission is evaluating the “adjustment of the sustainable finance framework” as part of efforts to increase financing for the sector.

Reigner stated that the EU executive body is laying the groundwork for a defense simplification package known as “Omnibus” to create “conditions for rapid industrial ramp-up across Europe.”

According to a document Euractiv saw, European Commission President Ursula von der Leyen planned to raise the issue of access to finance at an event with European defense companies on Monday, on the occasion of the launch of the EU’s strategic dialogue with the defense industry.

Relaxing ESG restrictions could pave the way for private investments in areas such as ammunition production. Both defense ministers and the defense industry have repeatedly called on the EU to improve access to credit from banks and financial institutions.

Specifically, they criticized the bloc’s current sustainable investment classification for not listing arms manufacturers and preventing banks from lending to these companies. They demanded that defense companies be reclassified as “harmless” under the criteria.

In its recently published white paper on defense policy, the Commission promised to remove “obstacles related to access to finance, including ESG investments,” for defense companies but provided few details at the time.

The European Investment Bank (EIB) had previously changed its investment practices to allow more cash flow to the arms industry. The EIB’s criteria for dual-use products, such as cybersecurity systems and drones, which have both civilian and military purposes, have been progressively relaxed over the past year.

In March, the EIB called for a “simplification exercise” to ease specific lending conditions for the European defense industry.

Following the EIB’s lead, Euronext, Europe’s largest stock exchange group, also announced that it will review its mission statement to ensure better access for defense companies to private investment opportunities.

ESG-focused investors are debating whether defense companies can truly be considered sustainable due to concerns that they may contribute to deadly conflicts and serve undemocratic regimes.

Italy and Greece met on Monday for an intergovernmental meeting on “combating migration.”

Greek Prime Minister Kyriakos Mitsotakis described the summit as “significant and decisive” rather than a “routine” diplomatic meeting during a joint press conference.

Italian Prime Minister Giorgia Meloni also stated that the two countries, which share a similar “geostrategic perspective” in the Mediterranean, are in close cooperation, particularly on important issues such as defense and migration.

Mitsotakis argued that after years of pushing for changes in EU migration policy, the Greek government had found the “right partner” in the Meloni government to address this issue with the “right approach.”

Meloni emphasized that their goal is to consolidate a new EU approach to migration management and noted that the focus has shifted in recent years from “internal redistribution” to “securing external borders, expulsions, and cooperation with countries of origin and transit.”

Meloni asserted that Italy and Greece bear the “burden of being primary arrival countries” but added that both are now part of the solution, not the problem.

At the joint press conference with Meloni, Mitsotakis also announced the signing of two important agreements concerning the electricity interconnector with Italy and railway infrastructure.

Mitsotakis stated that the number of agreements signed indicated the need for the Greece-Italy High-Level Cooperation Council to convene more frequently.

The Greek leader described the railway agreement signed between the two countries as a resumption of bilateral cooperation in this sector.

“Greece is investing over 400 million euros in the railway network, while Italy will contribute 360 million euros for the purchase of new trains and the construction of new depots,” Mitsotakis said.

The Mitsotakis government had become the focus of public anger following the tragic train accident in Tempe.

Regarding energy, Mitsotakis emphasized the goal of tripling the electricity interconnection capacity between the two countries and stated that Greece is an electricity exporting country.

He added that the Italian electricity grid operator Terna and its Greek counterpart IPTO had been instructed to advance the project, which is expected to cost 1.9 billion euros, stating, “The instruction we gave to Terna and IPTO is to advance the project as soon as possible.”

The two companies later signed an agreement valued at approximately 2 billion euros for a new submarine electricity connection between Italy and Greece.

Regarding the war in Ukraine, Mitsotakis stated that Athens and Rome are fully aligned in their determination to achieve an unconditional 30-day ceasefire as soon as possible with the support of all European countries.

Meloni described the agreement as a “strategic boost” to bilateral cooperation and noted a strong alignment between the two countries on defense and migration.

“Our relations are excellent. Without the two countries, Europe would not be in this situation today. We are both EU and NATO members and sit side-by-side in the European Council. Next year, we will take over the EU Presidency from each other,” Meloni said.

Meloni stated that defense cooperation and combating irregular migration would be priority issues and added, “There is strong common ground with the Greek Prime Minister in these areas.”

“We aim to continue working with Kyriakos to reshape Europe’s overall approach. We have managed to shift our focus to protecting external borders, targeting human traffickers, and strengthening cooperation with transit countries.”

Reiterating support for a “just and lasting peace in Ukraine,” Meloni expressed hope that Russia would respond positively to calls for an unconditional ceasefire and a meeting between Zelenskyy and Putin.

Regarding Gaza, Meloni called for immediate humanitarian assistance and supported efforts led by Arab countries to create a broader security framework. She also confirmed that both countries support the Western Balkans moving towards EU membership.

Concerning economic cooperation, she highlighted the importance of the Blue Med and Green Med initiatives, which aim to more than double the energy connection between the two countries, as well as joint efforts in the fiber optic sector.