Saturday, February 25, 2017

The Turkey-Germany Meeting

It was not front page news, and really was ONLY reported two days after the fact.

The Deputy Prime Minister of Turkey came visiting to Germany's Minister of Finance (Wolfgang Schauble).  The main topic?  Opening some door where the economy of Turkey could be assisted by Germany.

If you haven't followed Turkish events over the past year....there's been a spiral of tourism and a fair number of hotels and tourist-related situations have simply been shut down....not enough tourists to operate.

Chief reason?  On one side is the terror acts by the jihad folks which has been seen for a couple of years, but for 2016....it jumped a notch or two.  It doesn't matter who you talk to in Germany, Italy or France....most everyone has seen the headlines or watched the news and obviously know that terrorism is now a trending topic.

On the other side?  The coup of 2016....where Erdogan (the head of government) mounted a massive arrest campaign and has made life miserable for probably one-third of Turkey's citizens (some would argue that virtually everyone is miserable now as we enter the ninth month of this episode.  A lot of German tour companies had insurance to cover things like coups so they offered cancellations for July and August of 2016 to folks, and a lot accepted.   So far, there's no indication that the German crowd is returning.

This means that hotel owners are facing bank loans on the construction of their hotel, and meeting obligations is practically impossible.  Added to this....employees are dismissed from non-functional hotels. In the past, unemployed hotel folks could look around and find easily another place to work....but this is affecting the entire nation.

I doubt if Erdogan comprehended this fragile part of the Turkish economy.  That was pure cash coming into Turkey, and all you had to do was smile, get people into the country without hassle, and seem to operate a half-way republic.  This was not rocket science.

So you can imagine this meeting with the deputy under Erdogan and Schauble.

If you've never studied Wolfgang Schauble.....it's a bit entertaining.  He's 74 years old.  He claims at the end of 2017....he will retire.  He claims that....anyway.

He is probably one of the most clever and insightful Germans alive.

Up until October of 1990....most Germans felt that Schauble would follow Helmet Kohl, and be the next head of government.  But in October of 1990....at the age of 48....Schauble was the target of an assassination.  He was severely wounded, and since has been wheel-chair bound.  He went through a recovery period, and lessen his status in the party.  This was the period where Merkel moved ahead, and the rest is history.

Schauble is also one of the more blunt Germans in existence....who happens to run the finance ministry....so he's counting every single 'nickel and dime' in existence.  He takes the financial situation of Germany serious and hands out advice when people asks....but it tends to be tough advice.

No one says much over what Schauble and the Turkish deputy minister talked about.  Maybe a short-term loan got brought up, but I doubt that Germany really wants to enter this type of situation because there is no recovery period planned out in Turkey....so one loan only opens the door to a second, third and fourth loan.

Schauble probably mentioned that the whole coup thing is crap, and that the arrests of thousands (tens of thousands really) has soured every single German.  People read the news and they think the nation of Turkey is not safe.  Just releasing fifty or a hundred detainees won't be enough.  Letting the newspapers operate....won't be enough.  I would imagine Erdogan is reviewing the options this weekend after this meeting and trying to find some minor way of making Turkey seem like it was in June of 2016....before the coup.

Frankly, you have to undo the whole coup business....to get the German and European tourists to come back.  You need to make this happen in the next thirty days, or the whole window of vacation planning for 2017 is screwed-up.  Most Germans (other nationalities as well) tend to plan and pay for their vacation in January through the end of March.  I would take a guess that sixty-percent of folks know where they are going in August, and it'll be finished with reservations very shortly.  From the remaining folks....half will wait until May (90 days away) to make reservations.  The remaining crowd are the type who will make reservations within 30 days (usually the younger crowd).  The clock here is ticking.....if something doesn't show by early spring, then the tourist season for Turkey in 2017 is finished off.

If you were wondering about the Russian influence on this?  Prior to the Syrian war.....lots of Russians also went to Turkey for vacations.  I'd take a guess that between May and September, at least a hundred planes a week brought Russians into Turkey.  Some Russians still come but it's nowhere what it was prior to 2014.  A fair amount of negativity still rests between Russians and Turks over the Syrian conflict.

If I were a betting person, I'd guess that Erdogan will have some small group of arrested folks released (maybe a thousand).  In this case, it's too little and too late to affect 2017.  I have my doubts on 2018 being any better.

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