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C O N F I D E N T I A L LONDON 000811 
 
SIPDIS 
 
E.O. 12958: DECL: 04/04/2019 
TAGS: PREL PINS EU NATO TY DA FR RS IZ IS AJ JA
SP, SW, UK 
SUBJECT: TURKISH PM ERDOGAN ON ECONOMY AND POLITICS 
 
REF: A. LONDON 0781 
     ¶B. ANKARA 0485 
 
Classified By: Political Minister Counselor Greg Berry for reasons 1.4 
(b) and (d). 
 
¶1. (SBU)  Turkish PM Erdogan spoke at a Chatham House event 
April 3, in which he commented on the accomplishments of the 
London Economic Summit, Turkey's economic progress, and his 
party's recent election "success."  In response to questions 
from the audience, he was vague on Turkey's relations with 
Israel, condemned the continuing assertion of an Armenian 
genocide as a impediment to peace between Turkey, Armenia and 
Azerbaijan, and ruled out a Kurdish state in Iraq.  He also 
made it clear that Turkey would not support the Danish PM's 
candidacy for the Secretary Generalship (SYG) of NATO.  End 
Summary. 
 
World Economic Crisis is Advanced Countries' Fault 
--------------------------------------------- ----- 
 
¶2. (SBU)  Erdogan's prepared remarks focused exclusively on 
the London Economic Summit and Turkey's position.  He began 
by blaming the crisis on the U.S. and other advanced 
countries in Europe and the Far East, and complained that the 
developing countries have to "pay for the mistakes of the 
advanced countries."  He claimed that in Turkey for instance, 
the "advanced countries' crisis" had slowed several years of 
economic growth, during which the average income in Turkey 
had grown from 3,300 USD when his party came to power to 
11,400 USD at the end of 2008; the downturn had also returned 
unemployment in Turkey to 10 percent after years of 
improvements in employment.  Erdogan said that in the U.S. 
and the UK, "everyone was opening investment banks like 
grocery stores."  A lot of "illegal" activities were funded 
by these banks who were "rashly" permitted to operate, he 
charged. 
 
G20 to the Rescue 
----------------- 
 
¶3. (SBU)  Erdogan praised President Obama's decision to 
intervene in the U.S. economy, saying the President "had no 
choice" and agreeing with the president that "the problem was 
global and required global solutions."  Erdogan also praised 
the G20 for putting an end to these "illegal" banks. Erdogan 
was confident that the measures agreed at the London summit 
would produce "positive results."  He said he looked forward 
to attending the follow-up summit in November 2009 where any 
"adjustments" deemed necessary could be negotiated. 
 
Turkey Well Placed to Face Crisis 
--------------------------------- 
 
¶4. (SBU)  Erdogan claimed that Turkey was "better prepared" 
to weather the economic crisis because Turkey had been making 
many changes to its economy both as a result of its own 
crisis in 2003-2005, and as part of its reforms to meet the 
EU accession requirements.  Social Security, labor law, 
banking and investment reforms  have all contributed to 
Ankara's economy being "stronger" and less likely to be 
impacted by the "advanced countries' economic crisis." He 
cited a variety of economic statistics to argue how 
successful the Turkish economy was in comparison to 
"advanced" economies like Spain, Sweden and Japan.  Turkey's 
10 per cent unemployment was less than Spain's 15 per cent he 
noted, while Sweden and Japan had seen greater contraction of 
their industrial productions than Turkey's 21 percent.  He 
announced that Turkey will pay struggling companies 50 
percent of their total wages to forestall layoffs for the 
next year, after which the GOT will revisit this program. 
 
Turkey Still Open for Business - "Guarantees" Investments 
--------------------------------------------- ----------- 
 
¶5. (C)  The Prime Minister said his country has continued to 
see growth during the period of the crisis, although it has 
slowed.  He said Turkey has taken steps to strengthen 
confidence including offering loans to small to medium-sized 
enterprises (SMEs), and targeted tax reductions to encourage 
investments.  He said the GOT "is there to guarantee that 
foreign investors ... have no fears" about investing in 
Turkey.  Erdogan said that privatization would continue, 
despite criticism that his government was "selling Turkey to 
the highest bidder." He also said, in reference to growing 
doubts about the Islamicization of his government (ref A) 
that his government, party, and he himself, saw the economy 
as having no religion. "Money is like mercury" he said "it 
goes where it can." 
 
Recent AKP "Victory" Shows Erdogan Government has Mandate 
--------------------------------------------- ------------ 
 
¶6. (C)  Erdogan then turned to his Justice and Development 
Party (AKP)'s recent electoral "success" in local and 
regional elections, and which he claimed set the stage for a 
general election victory in 2011.  While acknowledging that 
his party lost "a little" of the overall vote, he pointed out 
that his party still garnered more votes than his two nearest 
opposition parties combined (ref B). And while he also 
admitted losing "one or two municipalities," his party still 
controlled 10 of the 11 largest cities and 39 smaller cities. 
 He blamed the economy for the few losses his party did 
suffer.  He added that while "all the governments of Europe 
are on shaky ground" because of the economy, his government 
was strong and will still be in power because the people 
continue to support stability, reform, EU accession and the 
democratic process. 
 
EU Should Recognize Turkey's Efforts / International Standing 
--------------------------------------------- ----------------- 
 
¶7.  (C)  Erdogan lashed out at the EU, claiming the EU had 
made "unprecedented" demands on Turkey for accession, but 
Turkey had cooperated "fully" and worked diligently and 
constantly on many areas of Turkish society.  Turkey has a 
"justified expectation that the EU recognize this progress." 
He stated that Turkey was a growing power which takes its 
international responsibilities seriously, and which is taken 
seriously, as exemplified by its election to the UNSC.  He 
then offered a laundry list of Turkey's active and 
responsible international engagement, including mediation in 
the Israeli-Syrian negotiations, peace talks in the Caucasus, 
the Balkans, and in energy talks.  Given all of this, the 
EU's continued skepticism about Turkey's membership in the EU 
is "unjustified," he said.  Erdogan ended his remarks with a 
veiled accusation: "(Unlike European countries) Turkey is a 
strong, young and vibrant nation, that is well-poised to be 
successful after the world economic crisis abates. The EU 
should consider its position, recognize this and move 
appropriately." 
 
Armenia and Azerbaijan 
---------------------- 
 
¶8. (SBU)  After his prepared remarks, Erdogan turned to a 
variety of questions posed by the audience. On Armenia, he 
blamed the Armenian Diaspora's continued insistence on 
"talking about a Genocide that did not happen" as interfering 
in what could be a settlement of almost all problems between 
Turkey and Armenia.  The other hurdle to relations is 
Nagorno-Karabakh, which Erdogan said was the responsibility 
of the "troika" of France, Russia and the U.S. to resolve. 
Erdogan said the three governments have not been taking their 
responsibilities seriously.  He said that the "troika" should 
accelerate their work to find a peaceful solution. 
 
No Kurdish State - Iraq "Sad" 
----------------------------- 
 
¶9. (C)  Erdogan said that Turkey "has no understanding" of a 
so-called Kurdish state.  Iraq, he said, is a country with no 
religious or ethnic identity.  If there were to be a Kurdish 
state, there could also be a Shi'a state and an Arab state 
and a Sunni state - "but there would definitely also be a 
civil war."  He then called the condition of Iraq "sad"  and 
blamed the "last seven years" on the destruction of its 
infrastructure as well as "inability of the authorities" to 
rebuild despite "billions of dollars invested." Erdogan said 
that Turkey wants to see a "happy" Iraq and that it is not 
"happy, but sad."  He hoped that measures to improve Iraq 
would be accelerated. 
 
GOT Willing to Work with Israel 
------------------------------- 
 
¶10. (C)  Asked whether the GOT would have difficulty working 
with the new Israeli government given recent statements by 
the new Israeli Foreign Minister, Erdogan skirted the issue, 
saying only that Turkey has "no problem" with any of its 
neighbors.  He said that Turkey had worked hard as the 
mediator of the Israeli-Syrian peace talks and were in the 
fifth session when the Gaza fighting "ended that."  He said 
Turkey was ready to act as mediator again if both countries 
asked for such mediation. 
 
Denmark Unforgiven - Rasmussen Will NOT Have Turkey's Vote 
--------------------------------------------- ------------- 
 
¶11. (C)  Finally, Erdogan was asked by a Danish journalist if 
Turkey would support Danish PM Rasmussen's candidacy for the 
SYG of NATO.  Erdogan replied that the SYG of NATO must show 
strength, not weakness, and Denmark has been "weak" in 
failing to silence a terrorist radio station in Denmark. 
(Embassy note. He is referring to a radio station run by a 
Kurdish group which Denmark refuses to label as a terrorist 
organization.  End note.) NATO also stands for peace, and 
Denmark has incited conflict by its tolerance of anti-Islamic 
cartoons. GOT would, therefore, not be able to support 
Rasmussen's bid. 
 
Visit London's Classified Website: 
http://www.intelink.sgov.gov/wiki/Portal:Unit ed_Kingdom 
 
LEBARON