Over the past several years, Turkey has suffered economic harm due to “road accidents” in its foreign relations, courtesy of ill-conceived steps by the Justice and Development Party (AKP) government. The 2015 plane-shooting crisis with Russia was the most bruising in this respect. Turkey has yet to fully recover from Moscow’s economic sanctions, which included import bans on certain Turkish products, restrictions on Turkish businesses operating in Russia, visa restrictions for Turkish nationals and a drastic fall in the flow of Russian tourists to Turkey. With its economy taking serious blows, Ankara extended an apology to Moscow in June 2016, scrambling to rebuild bilateral ties. Despite certain improvements, however, the relationship has failed to return to its pre-crisis level.

Then, in early June, Turkey took sides in the crisis in the Gulf, standing by Qatar against the Saudi-led bloc of Sunni countries. This also brought the risk of economic harm. Turkey nowadays is trying to position itself as a mediator, keen to preserve economic opportunities on both sides.

Most recently, Ankara has been sparring with Germany, widely seen as the leader of the European Union, which Turkey has unsuccessfully sought to join. The AKP regime had long faced German criticism over human rights violations and the erosion of democratic values and the rule of law in Turkey. In mid-July, an incensed Germany toughened its stance and signaled it could draw the economic weapon after German nationals landed behind bars in Turkey on terror-related charges and Ankara seemed to implicate German companies in probes over last year’s coup attempt.

Given the extent of economic bonds, Germany does have strong leverage in this realm, but how much it could play its cards and, more importantly, how willing the German private sector would be to heed any punitive measures remains an open question.