Türkiye’s integration with Europe boosts investor confidence, economist says

Türkiye’s deeper economic integration with Europe could strengthen investor confidence and provide significant opportunities for both sides, according to economist Timothy Ash.

Speaking on CNBC-e, Ash emphasized that geopolitical shifts in Europe present a crucial moment for Türkiye to enhance its economic and strategic ties with the region.

Stronger economic ties with Europe could benefit Türkiye

Ash, a researcher at Chatham House’s Russia and Eurasia Program, noted that Türkiye has longstanding economic connections with Europe.

He highlighted that rising defense expenditures in Europe could positively impact Türkiye’s industrial and production capacity.

“If Europe moves towards growth and strengthens its integration with Türkiye, investor confidence will also improve,” Ash said.

He also stressed that Türkiye’s closer alignment with Europe, both in trade and the defense industry, is essential for economic stability and regional security.

Europe’s growth creates opportunities for Türkiye

During the interview, Ash stated that Türkiye could be a key partner in addressing Europe’s military-industrial production gap.

“Türkiye has the potential to be one of the most important partners in closing Europe’s defense production gap,” Ash said, adding that enhanced cooperation in defense industries could strengthen Türkiye’s strategic position in Europe.

Deeper collaboration with major European defense firms

Ash pointed to Türkiye’s progress in the defense sector, suggesting that the country could establish stronger partnerships with major European defense companies.

“The cooperation between Bayraktar and Leonardo is a start, but Türkiye could build deeper partnerships with major defense firms like Rolls Royce and British Aerospace,” he noted.

He also highlighted Türkiye’s participation in last week’s Lancaster House European security conference as a significant development.

“Europe can no longer exclude Türkiye. The U.K. and other countries now recognize how critical Türkiye is for European security,” Ash said.

Monetary policy remains key for investors

Ash emphasized that foreign investor interest in Türkiye remains closely linked to monetary policies and inflation trends.

“The Central Bank’s interest rate policy and inflation trajectory create uncertainty for investors,” he said, adding that foreign investors, particularly those holding Turkish government bonds, are cautious about the sustainability of current policies.

“If Türkiye can reduce inflation to single digits and maintain financial stability, investor confidence will increase rapidly,” Ash explained. He noted that strengthening Türkiye’s economic integration with Europe could lead to sustained foreign investment in the country.

Ash concluded by stressing that if Europe truly sees Türkiye as a partner, economic and trade cooperation must be deepened. “Türkiye should be part of Europe’s economic transformation,” he said.