Fuat Aksu,"Confidence Building, Negotiation And Economic Cooperation Efforts In Turkish-Greek Relations (1990-2004",Turkish Review of Balkan Studies, Annual 2004, ss. 31-109

CONFIDENCE BUILDING, NEGOTIATION AND ECONOMIC COOPERATION EFFORTS IN TURKISH-GREEK RELATIONS (1990-2004)

Fuat AKSU*

INTRODUCTION

There are a good number of publications covering the long-standing and problematic Turkish-Greek relations. However, studies focusing on the economic aspect of the relations between the two States are few. This is quite understandable since the conflict issues between the two countries have been considered within the framework of “national interests” and “security” concerns. Only during the recent years when confidence-building measures (CBMs) were brought to life and negotiation grounds were made to create negotiation grounds did the need for fostering economic relations prevail.

As a matter of fact, Turkey had long before suggested to build up the relations on economic basis rather than reverting to security issues and had started efforts in that direction since 1983. Namely, during the Prime Ministry of Turgut Özal, due to the negative impact of the then Turkish-Greek tension on Turkey’s foreign policy strategies, Turkey had concluded that Turkish- Greek relations had to be based on economic cooperation in priority. However, Turkey’s efforts in this respect were not taken into consideration by Greece and were in vain. As will be taken up in detail, later on in this study, Turkey has done her share in trying to build up relations on economic cooperation basis and create a sustainable security environment. Moreover, Turkey dared for attempts in this respect sometimes even staking domestic concerns, while Greece still carried on its septic and reluctant attitude. In a way, relations between Turkey and Greece adopted a “Cold War” like manner rather than a “détente” period, until the last quarter of 1980s.

As for the last quarter of 1990s, bilateral relations exhibited sound and solid developments, resulting in dialogue and negotiation. The initiation of “security and confidence building measures” proved the beginning of a genuine “détente” period in the relations. It was apparent that finally both parties had sensibly revised their comprehensions of “national interests” and “security” concerns.  In line with such developments, hopes for negotiation bloomed. Despite the improvements, the basic question encompassing this study still prevails:

To what extent the level of economic cooperation yields an impact over the unraveling of basic problematic relations and over the increase and the release of the persisting tension in Turkish-Greek relations? Putting it more clearly, will the improvement in economic relations contribute to the solution of numerous matters of conflict between them, ranging from “national sovereignty” to “vital interests”.[1]

Morrow, Siverson and Tabares all claim that among the states having discordant relations, one of the basic issues of conflict on foreign trade analysis is that; political relations between the states, might directly or indirectly influence their foreign trade relations.[2] According to these writers,

• conflict and anticipation of conflict reduce trade flows between the states,

• pairs of democratic states  will  trade more than  the other pairs of states,

• a state will be reluctant to trade capacity with another state that may use its added wealth to increase military capacity against it.

Accordingly, it is drawn that political strife may force the states to delimit their foreign trade mutually, in cases when conflicts can turn into warfare. The economically stronger one might use this advantage as leverage or a deterrent factor over the other.[3] On the other hand a probable confrontation between the states may also lead them to delimit their trade mutually so that they can minimize the possible risks, likely to occur due to the interruption of specific trade (like energy supply) flow.

In this study, firstly, the general trend of relations between the two Countries will be focused on and secondly confidence-building attempts, their repercussions upon their relations will be taken up inclusively. Later on, how the consequences of the “détente” period effecting the trade relations will be studied. During the study of the relations between Turkey and Greece, emphasis will be given particularly on the development of economic relations and then the question of how can such progressive efforts step-up the foreign policy strategies of both States will be raised. As it is frequently iterated, will the improvement in economic relations contribute to the dissolving of enduring conflict issues between the Two? In the past of Turkish-Greek relations, one can hardly meet any case when an approach in economic relations has made an overall positive impact towards the healing of the general trend of the relations. This is because all conflict issues between them are directly relevant to the sovereignty rights and vital interests of both.[4] Consequently, it would not be wrong to conclude that the development in the economic and commercial relations between Turkey and Greece could only partly contribute to the unraveling of major conflict issues between them and not fully. In fact, the period after 1980 displays the same nature of their relations. During this period the threat conceptions were minimized mutually or at least stabilized, and a common ground based on confidence and security could be created, convenient for discussing and searching for ways of compromise and solution on conflict issues. During the first years of 2000s positive steps have been taken raising wishful expectations for the future. However, it is not yet definite how much distance is taken in the course of the dialogue and discussions in this context. It is a fact that the dialogue atmosphere is making a positive impact on two nations’ relations and the mutual understanding between them generally. Considering this fact, it can be concluded that economic relations and cooperation is being improved between Turkey and Greece to some extent.

THE GENERAL VIEW OF THE RELATIONS

Turkish-Greek relations gained a new dimension at the brink of 21st century. With consistent and different issues of conflict emerging starting with 1950s, the developments which created positive changes in their relations in the beginning of 2000s came as both sides broke enduring taboos in their traditional and rather negative approach towards each other. Turkish-Greek relations were customarily conceived as a chain of troublesome disputes by anyone having a slightest notion of the long lasting antagonism between them. Ever since 1950s, while topics of dispute between them constantly increased, all efforts of peace mediations failed. At every conflict situation, the usual steps were followed. Upon the emergence of a new dispute, both sides used to declare their own stance on the matter. The tension used to climb even more, whenever a similar case occurred in the past, and the tension would get closer and closer to confrontation. Diplomatic exchange of views, efforts of mediators, persuasive attempts of third parties all would fail. Finally the block leaders used to intervene when the two came to the brink of war. The tension used to be frozen and the issue was put aside, common declarations used to be announced by the third parties promoting the building of CBMs between the two and a reluctant dialogue process used to be started. This was the process applied at every conflict situation, yielding no solid result.

This repeated process at every dispute, which brought Turkey and Greece to the brink of war again and again. The failure of all diplomatic attempts and mediations, pointing at specific cases in order to persuade the other towards concessions, makes one think of a habitual systematic attitude they have both adopted in the course of time. In fact, the claim of a right suddenly used to turn into a matter of independence or clash of interests, no matter how innocent it could be. This fact can be easily observed in minority, Cyprus and Aegean issues where the kind of the dispute is an ignored detail, whether it is political, legal or technical.

Finally, during the 1990s, fundamental changes occurred on which Turkey and Greece could build up a genuine dialogue process in their relations. However, also during this stage new problems came up between the Two, in addition to the traditional ones.[5]

• In 1994, the UN Law of the Sea was ratified by Greece and Turkish Grand National Assembly (TGNA) immediately delivered all rights to the then government of Turkey, to take every action (including military), in case Greece attempted to enhance its territorial limits in the Aegean from 6 to 12 miles, depending upon the terms of the new UN Law of the Sea.

• Relevant to the above case, when the Kardak Rocks crisis broke out in 1996, it gave rise to arguments on the statue of rocks and islets on the Aegean Sea and Turkey refused Gavdos to be included in the NATO maneuvers claiming that the final statue of the islets were not yet determined.

• In 1997, Cyprus Greek Administration declared the launching of S-300 Russian missile systems on the island and upon the strict rejection of Turkey; they had to transport and store the missile system on the island of Crete.

• In 1999 when the PKK leader A. Öcalan was given shelter at the Greek Embassy in Kenya-Nairobi, Greece’s connections with terrorist organizations were revealed to the world.

The fact that all these tensions did not turn into war is due to the interventions of allied relations of the two states and the mediation of the third actors.[6] Namely, Kardak Rocks crisis did not turn into war because of the USA’s mediation. Also, the EU Parliament declared on 15 February 1996 and Council of Ministers declared on 15 July 1996 that the borders of the EU ended up with Greece’s internationally recognized borders on the Aegean and called on Turkey to consider International Law.

As for 1997, when the sides were more cautious so as to not to give rise to tension which could interrupt the efforts to build up the dialogue process, we also noted the support of the third actors like the USA, NATO and the EU. Also in this context, during the Madrid NATO summit in July 1997, Madrid Declaration was concluded between Turkey and Greece, thanks to the efforts of the US Secretary General M. Albright, signed by Demirel and Simitis.

Following that step on 12 February 1998, Turkish Foreign Minister İsmail Cem proclaimed Turkey’s proposal to Greece.[7] In it, it was suggested that CBMs were to be put forth and common topics of possible cooperation to be determined and it was also stressed that cooperation on those issues had to be mutually promoted. In fact, the last phase of Turkish-Greek relations exhibits such reconciliatory efforts. In this context, the new era of relations will also considerably contribute to the conflict solution methods. For the time being, cooperation is started on topics to the common interest of both countries rather than on major conflict issues. Actually, similar attempts were also started formerly from time to time, but no considerable result was reached.[8] However, this time the conjuncture is quite different since there are a good number of expectant actors to benefit from this rapprochement. Consequently, if and whenever the sides try to hinder the dialogue process, they keep facing national and international pressure.

The Character of Turkish-Greek Relations in the Aftermath of 1990

Between 1990 and 2000 serious tensions broke up jeopardizing the “status quo”, the sustainability of interests and the balance of power between Turkey and Greece. The pressure exerted towards the two by the third parties during these tensions proved that the side effects of a possible war between the two would no doubt yield negative impacts both within and beyond their borders.

Regional clashes taking place in the Balkans and Middle East in the same span were no doubt adding to the strategic significance of both Turkey and Greece. If their relations could be relieved of tension, and normal contacts were formed, such improvement would create suitable ground for structural contemplations not only of the USA but also of the EU. Greece, being a member of the EU and Turkey being a candidate member of the EU, plus being a member of the European Council and NATO, meant the disputes could be carried into the EU.  This complex web of relations would create dilemma for the EU members, who would have to choose which side to side with in case of discord. In fact, during previous disputes between Turkey and Greece, third parties had intervened and forwarded support to one side and this brought only a temporary remedy to the issue rather than finding a permanent solution. For instance, as was observed during the Kardak Rocks crisis in 1996, the USA declared that it would decline any of the sides in case they reverted to military action and this was a real and major deterrent factor. The EU sided with Greece and stated that the case would be treated like a EU-Turkey issue and forced the sides for negotiation. In fact, the EU was taking a one sided stance to the problem. Nevertheless, the recent change in the international system has primarily provided means for both sides to revise and moderate their national drives and inspirations in their relations mutually. The military and political strategy of the Cold War era has been replaced with economical and political cooperation efforts, which have contributed to maintain and sustain stability in the relations. In this context the EU, SECI and the Stability Pact can be counted among the efficient attempts founded to build up regional cooperation and solidarity based on strong foundations, to reach structural dimensions.

The probability of the disputes between Turkey and Greece spilling over into the EU is irritating the Union as much as Turkey and Greece. It is a normal concern that the EU members can be troubled, fearing that the problems which the two might carry to the Union could create differences of opinion and harm the ongoing course, harmony and procedures in its body. On the other hand, this situation might also give rise to difference of strategies or policies between the other members who take sides either with Turkey or Greece. Upon Turkey’s determination to be a full member to the EU, Greece has chosen to go to the International Court of Justice (ICJ) for the solution of conflict issues.

Upon the declaration of Turkey’s candidate membership to the EU at the Helsinki Summit in December 1999, Greece showed good intentions to solve the topics of dispute through methods proposed by the EU. However, Greece also started declaring that they did not disregard other peace seeking attempts (such as dialogue and debate) within the negotiation process. These were all signs of a significant policy change and similar comments were also made by Turkey, favoring reconciliation efforts and bilateral negotiations. However, Turkey also expressed that ICJ could be the final authority to be consulted for the solution of conflict issues. Before the Helsinki Summit Turkey had already iterated that the remaining points of disagreement could be taken to the ICJ, after all other points were settled through dialogue. Nevertheless this commitment was written confirmed by Turkey during the Helsinki Summit which drew Greece towards dialogue and Turkey towards the ICJ alternative.[9]

In fact, the last quarter of 1990s comprised a turning point to Turkish-Greek relations. Although a series of tensions were faced in a short period, a dialogue and “detente” process was initiated. While on one hand the CBMs were brought to life, on the other, alternative solutions could be brought up and basic conflict issues was started to be discussed. The EU was considered a suitable ground to facilitate such attempts. Turkey and Greece tried to work out their problems in line with conditions which the EU imposed them. In the mean time, the earthquakes which struck Turkey and Greece one after another proved that the two nations still carried peace initiatives towards each other and thanks to the media in both countries, the politicians were drawn towards peaceful solutions and to abide with the dialogue process.

The Simitis Government’s determination to improve relations with Turkey was a strategic choice and this choice brought together the following advantages:

• From the aspect of domestic policy gains, dialogue with Turkey has been an eminent factor for Simitis Government to increase their support in the public opinion.

• Similarly Simitis, during his leadership struggle with A. Papandreou in PASOK, fortified his position among his political rivals and also could manage to hold back the reaction of fanatic Turkey reprobates.[10]

• Greece entered the EU common currency unit (ECU), which eased its stability efforts for sustaining economic development. The initiation of the dialogue process helped Greece to adopt a stronger stance against criticisms from the EU/USA axis particularly on terrorism issues.[11]

• Suitable background is formed to delimit its costly defense budget that was putting over weight on the general budget, to cover up the precautions (like excessive armament) needed in case of a threat from their neighbor Turkey.

On the other hand, Turkey made use of the sad but also sympathetic atmosphere created by the earthquakes and could persuade Greece towards dialogue. During the Öcalan crisis, it was apparent that Greece had relevance with the issue and eventually Greece was included in the list of countries supporting terrorism.[12] Finally, Simitis due to the government’s push and Turkey’s wish, plus the international public opinion’s pressure, declared that they were ready for dialogue with Turkey.

From another angle, in Greece, the government in power might be heading to sustain political stability through dissolving the conflict issues between Turkey and Greece, which serves within the Greek government’s framework of national/international interests. In the mean time, Greece needed to get rid of the enmity against Turkey, which was totally binding itself in domestic and foreign policy movements. Moreover, this enmity process had begun to delimit Greece’s relations with the third countries too.[13]

Greece’s negative attitude towards Turkey’s access to the EU, showed in actions such as vetoing financial aid packages for Turkey, gave Greece an image of a trouble-maker member.[14] On the other hand, USA’s building stronger ties (with proper timing) towards Turkey when whenever the country is rejected by the EU also created a perception that the USA was siding with Turkey against Greece. The USA increased its pressure towards Greece in this respect.[15] The pressure regarded Greece’s policy in the Balkans also. It began to be discussed after Greece’s negative identity was taken up by NATO circles too. As from the economic dimension, Greece’s efforts for entering the European common currency union, led Greece to remove its veto on Turkey’s candidacy to the EU.

TURKEY’S APPLICATION FOR FULL MEMBERSHIP TO THE EU: HELSINKI SUMMIT

While on one hand Greece was frequently mentioning in formal declarations that they did not reject Turkey’s full membership to the EU, on the other hand whenever realization of the same issue was discussed, they suggested that structural features of Turkey did not fit into the EU criteria, and they tended to link the possibility of membership, to the developments in line with the EU criteria. In fact, this attitude was repeated by Greek authorities during the Helsinki Summit on 10-11 December 1999 and it was precariously considered whether Greece’s veto could be avoided or not. However, Greek veto was avoided after the views of both countries could be dissolved on a common ground.  Shortly before the summit, the Greek Foreign Minister G. Papandreou had said: “Almost everyone accepts Turkey’s candidacy, but Turkey is extremely eager. Our dialogue with Turkey on the EU has reached to the final step. Whatever the result of the Helsinki Summit will be, we should enhance with friendly cooperation in a way that will be to the mutual benefit of both nations…

Turkey is bound to maintain the required standards of the EU. Until this moment, we could not settle on our problems. However if Turkey is granted the candidacy position we shall be pleased with it. EU membership is a good chance for Turkey as well as bearing a reform character. I hope a positive result can be reached at the Helsinki Summit. If Turkey becomes a candidate, they will have to conform to the Copenhagen Criteria on Cyprus and Aegean issues.”[16] Turkish Foreign Minister also made a speech in the following contents before the summit: “Incase the EU refuses Turkey and divides Aegean into two, it will potentially create a controversy between Turkey and Greece. Therefore, while reaching a decision, the EU should consider this. We do not expect extra sympathy from anyone, we only expect that the same conditions asked from others to go for us too. It is included in the Agenda 2000 of the EU that we will have to conform to the same conditions. But if different reservations are put and extra conditions are required, just for Turkey’s candidacy, this cannot be acceptable.”[17]

These declarations made before the Summit raised hopes for grounds for negotiation, and it was expected that Greece would not forward its veto. In fact, on 10-11 December, when discussions focused on problems between Turkey and Greece, such topics were tried to be pacified and it was concluded on Turkey’s candidacy. In the concluding document, it was indicated that Turkey and Greece should resolve the disputes among them until 2004, as it was already included in the Agenda 2000 document. In case they cannot reach to a consensus by then, the issues would be taken up at the European Council the same year. However, this timing gave rise to different interpretations.[18] Greece remarked that 2004 is the deadline for the conflict issues to be taken to the ICJ, In this context Simitis said: “We wish to settle the continental shelf issue with Turkey and I do not think that other disputes will come up in the course of time, but if it does we can consider those also. There is quite a long time until 2004 and we expect to take positive steps until then. If there are still points of dispute in 2004, then we can consult to ICJ.”[19]

Turkish Foreign Minister Cem also made comments in the same context: “the 2004 is not the deadline to go to the ICJ but a time when the EU will review the case. The EU has put this clearly and formally. We repeated many times that we would take the conflict points to the ICJ, after all negotiation ways are tried. We have always chosen to solve the disputes through discussion and negotiation. The text also considers the possibility of discussion.”[20]

The Agenda 2000 document, concluded in July 1997, denotes all procedures in line with the EU enlargement process, includes articles referring to border disputes, which all candidates have to settle before their full access into the EU. According to the said text: “Enlargement  does not mean the border disputes will be transferred to the EU. Enlargement efforts are expected to create positive and empowering drives for the states to settle their border disputes. Some states which applied for candidacy still have disputes between them or with the third countries on various issues. The Commission requires that the states should settle all major border conflicts between them or with the third countries. This acquires priority before adaptation. On the contrary, the sides should agree to take their dispute to the ICJ.

… All countries should confirm in advance that in case such a dispute is faced in the future, they will be ready to accept the compulsory judgment authority of the ICJ, pre-conditionally.”[21]

Considered in this context, Agenda 2000 requires that Turkey settle all its disputes with Greece and in case of arbitration, accepts unconditionally the power and the authority of ICJ and will act in accordance with the verdict of the Court. While the EU membership is in question, the prevailing conflict issues between Turkey and Greece are; Aegean issues, particularly continental shelf, drawing back of Turkish troops from Cyprus and Turkey’s rejection for Cyprus being a full member to the EU.[22]  During his visit to Turkey on 20 January 2000, G. Papandreou made statements about Cyprus, meaning that the full membership of (Northern) Cyprus to the EU, will occur before Turkey.[23] Moreover Papandreou remarked: “The membership of (Northern) Cyprus will be advantageous for Turkey”, “Turkish Cypriots will be represented in the EU, Turkish will be an official language of the Union, and Turkey will gain familiarity in the Union, and this will serve like a side road on the way to its access.”[24] Turkey had already declared that in the core that she did not object to the ICJ alternative. In the opinion of Turkey, the sides should start the negotiation process, before that stage, first they should find out precisely on what points they cannot reach a consensus, whether these problems exist in reality and if so the essence and the nature of the problem and then take those items to the ICJ.  In fact, Greece is delimiting the conflict issues to continental shelf only, and calls it as the only matter to be taken to ICJ. However, Turkey, apart from the continental shelf, considers the problems in the Aegean as; expansion of territorial waters, limits of FIR regions, militarization of the islands and the undetermined statue of the islets and rocks.

When taken up from another point of view, whether the conflict matters can be settled in the foreseen time span or not, this is closely relevant to the attitude of the sides on the ICJ issue and the future and the success of the Common Defense and Foreign Policy that the EU is trying to build up. It should be noted that the decision of the European Parliament backing Greece during the Kardak Rocks crisis of 1996, gives an idea as to the direction of their choice in case of a controversy between Turkey and Greece. Similarly, Northern Cyprus being accepted as representing the whole island and its access into the EU as the only Cyprus identity is another hint of the same backing.   Consequently, this means the EU has started taking sides in the Turkish-Greek conflict.[25] This attitude leads us to think that Greece preserves it weight on the EU and raises the suspicion that the EU will continue with a similar approach.[26]

CONFIDENCE BUILDING MEASURES AND TURKISH-GREEK RELATIONS[27]

The efforts for conflict solution between Turkey and Greece should be taken up in two separate pre-studies. First is to take measures to avoid escalation of the problems so that mutual confidence can increase. The other is activity where common interests emerge before focusing on major conflict issues. Within a process were disputes turn into hot-confrontation and diplomatic attempts fail, the sides incline towards “de facto” solutions which increase the risk of clashes. To avoid such an undesired situation, priority is now given to building up the relations on mutual confidence basis, rather than beginning with the permanent and satisfactory solution of the major problems. This order of dealing with the issues creates the necessary confidence-building atmosphere.

The legal and/or the political nature of the conflict issues, as well as their military/security dimension, indicates to the sides which strategy and tactics to be chosen plus the stance to be taken. Particularly, if the sides fail to find diplomatic solutions and revert to de-facto solutions, causing the tension to climb, there will be an increased the risk of war, and the sides could get used to conflict situations.[28] From this angle, the Athens and Istanbul Agreements served as “confidence building measures”, arranging the common efforts to avoid conflicts becoming clashes. The Madrid Declaration also constitutes a vital phase of this process and sets up “CBMs ”.

The Decade of 1980-1990

The efforts to resolve Turkish-Greek conflict issues through negotiations and efforts to avoid interventions which can cause tensions to climb during de facto situations have always been on the agenda.[29] Efforts to avoid tensions turning to hot confrontation have been supported by the allies of both Turkey and Greece as well as international organizations. However, the decade between 1980 and 1990 was a time when the negotiation process was interrupted, tension increased and hot-confrontation prevailed. In this decade the PASOK government under the leadership of A. Papandreou, was rather reluctant on dialogue and iterated frequently that threat against the territorial integrity of Greece came from Turkey. No doubt, such a discourse clogged the roads to dialogue. In 1987 when tensions were faced on the continental shelf issue, CBMs came to fore again. After 1983, Prime Minister Turgut Özal insisted on building up the relations on economic cooperation so that mutual confidence could be maintained.[30] In his opinion political problems were impeding the chances of cooperation between the two. If economic cooperation could be improved, that would impress the public opinion of the two nations and consequently would moderate the approach of politicians too. He strongly believed that this alternative had to be tried.[31]

However, the dialogue process could be started only after the continental shelf conflict in 1987. On 30-31 January 1988, the Prime Ministers of Turkey and Greece came together in Davos Summit, where they both tried to seem willing for starting the dialogue process though the meeting took place soon after the tension. It was observed that the Turkish side was more willing to start the dialogue process. In this context the Decree of 1964[32] was annulled on 5 February 1988 and on 9 February 1988 a Greek representative arrived in Turkey to participate the “Land Transport Commission Meeting” after five years from the last visit of Greece to Turkey. Before Prime Minister Özal’s visit to Athens on 29-31 May, it was decided that within June, the “Political Commission” formed to discuss the problems between Turkey and Greece, would hold its first meeting in Athens and the other Commission, assigned to promote trade, economy and tourism was going to convene in Ankara.[33] Although the Davos Summit restarted the dialogue process, it took time for the relations to improve. The fruits of the process started to ripen only in 1999 and 2000. During the Economic Commission meeting held on 24-26 May, 1988, the sides concluded on the initiation of negotiation topics like; economic, industrial, technical and scientific cooperation, avoiding double taxation, mutual promotion and preservation of investments. The Commission also considered improving land, air and railway transport as well as the implementation of communication systems between them. In addition to these issues the Commission also agreed on fostering and improving cooperation on agriculture, trade and industry plus health, tourism and environment issues.[34] As for the workability of decisions taken by the Economic Committee, this was greatly tied to the success of the Political Committee meeting to be held in Athens with the presence of T. Özal, during his visit to Athens on 13-14 June 1988. The Political Committee’s decisions have been a vital step to lessen the risks of hot- confrontation after 1984 and 1987 continental shelf crises.

Athens and Istanbul Agreements

It is remarkable that priority is given to CBMs to abolish the threat perceptions that damage the relations every now and then. For the dialogue process to be restarted, the sides, on 27 May 1988, under the signatures of Mesut Yılmaz and Papulias have concluded on the following items:

“The two parties have agreed on the following confidence building measures:

• Both parties recognise the obligation to respect the sovereignty and the territorial integrity of each other and their rights to use the high seas and international airspace of the Aegean.  

• In conducting national military activities in the high seas and the international airspace, the two parties shall endeavour to avoid interfering with smooth shipping and air-traffic as ensured in accordance with international instruments, rules and regulations. This would contribute to the elimination of unwarranted sources of tension and reduce the risks of collision. 

• The two parties have agreed that the planning and the conduct of national military exercises in the high seas and the international airspace which require the promulgation of a NOTAM or any other notification or warning should be carried out in such a way as to avoid also to the maximum extent possible the following:

1. The isolation of certain areas

2. The blocking of exercise areas for long periods of time

3. Their conduct during the tourist peak period (1 July-1 September) and main national and religious holidays.

It is understood that the planning and execution of all national military activities will be carried out in accordance with the existing international rules, regulations and procedures.

With a view of achieving the above, and without prejudice to the existing international regulations and procedures, the two sides will proceed, when required, to due communication through diplomatic channels.

The provisions of the memorandum of understanding shall have effect and be implemented in full conformity with the provisions of the Davos joint press communiqué.”[35]

Following Prime Minister T. Özal’s visit to Athens, the Istanbul Agreement was signed on September 8, 1988. According to this agreement: 

“1.      The military and other activities carried out by the ships and aircraft of both countries on the high seas and international airspace will be conducted in accordance with international law and international custom, instruments, rules, regulations and procedures.

2.      In accordance with the above:

A.                     The naval units of the parties will abide by the following guidelines:

·       They will refrain from acts of harassment of each other while operating in the high seas in accordance with international law and custom.

·       They will act in full conformity with international law, rules, regulations, and procedures as well as military custom and courtesy.   

·       Naval units engaged in the surveillance of ships of the other party during firing operations and other military activities in accordance with international law, instruments, rules, regulations and procedures shall maintain a position which will not hamper their smooth conduct.

B.                     The air force units in conducting military activities in the international airspace will abide by the following guidelines:       

·       They will act in full conformity with international law and in particular international custom, instruments, rules, regulations and procedures.

·       Pilots of aircraft of the parties shall display utmost caution when in proximity of aircraft of the other party and shall not manoeuvre or react in a manner that would be hazardous to the safety of the flight and/or affect the conduct of the mission of the aircraft.

3.      To promote the climate of confidence, whenever there are claims of acts contrary to the above, the sides will in the first place inform each other through diplomatic channels prior to releasing official statements.”[36]

Despite all these measures, claims of air space violations persisted on both sides. Consequently, the break out of further tensions in 1994 and 1996 proved that the confidential ground the parties had tried to build up was still unsettled and shaky.

Madrid Declaration

The Madrid Declaration announced after the Kardak Rocks crisis in 1996 had been efficient to bolster the “status quo” needed for a relationship to be built on confidence basis. With the Madrid Declaration of 8 July 1997, the Parties agreed to  pursue efforts to promote bilateral relations based upon:

“-Mutual commitment to peace, security, and the continuing development of good neighbourly relations;

-Respect for each other’s sovereignty;

-Respect for the principles of international law and international agreements;

- Respect for each other’s legitimate, vital interests and concerns in the Aegean, which are of  great importance for each country’s security and sovereignty rights;

-Commitment to refrain from unilateral acts on the basis of mutual respect and willigness to avoid conflicts arising from misunderstanding; and

-Commitment to settle disputes by peaceful means based on mutual consent and without use of force or threat of force.”[37]

The most significant aspect of the Declaration[38] was that it banned Greece from taking unilateral action and Turkey from exerting military force as a threatening element.

This commitment brought up arguments in Turkey as to whether there was a deliberate change in the basic understanding of the sides, particularly on the point that if Greece extended its territorial limits to 12 miles in the Aegean, this would be considered as “casus belli”.[39] Another approach towards “confidence building measures” was the Foreign Minister M. Yılmaz’s package of suggestions on 12 February 1998.[40] He suggested that Parties defined their problems together, that  the Madrid Declaration evolve into a formal agreement, CBMs to be improved and activated in the Aegean, and the Wise Men Group from Turkey and Greece to be assigned for discussing and defining issues of conflict.

In case these suggestions were approved by Greece, representatives from Turkish and Greek Foreign Ministries were going to convene in Ankara and Athens by March 1998. However, on 24 February 1998, Greece sent a responding memorandum and refused the suggestions in question.

In this context, the proposal of “the development and implementation of CBMs in the Aegean, as an integrated whole in collaboration with the Secretary General of NATO” suggested during the NATO Foreign Ministers meeting in Luxemburg on 28-29 May 1998 was considered, thanks to the constructive attempts of NATO Secretary General J. Solana. Finally on 4 June 1998, CBMs were proclaimed.[41] These measures were meant to avoid risk of confrontation of the military forces of both countries during routine military practices in the open-seas region and international aviation zone in the Aegean and to sustain mutual respect for sovereignty and territorial rights. In this manner, when violation of rights and the occurrence of casualties were avoided, the risk of military confrontation in the Aegean would be minimized. However, it is questionable to what extent the Parties have been loyal to CBM and criticisms carried on in this respect.

Temperate Dialogue Process: Exchange of letters between Cem and Papandreu

Soon after the Öcalan crisis on May 24 1999, Foreign Minister İsmail Cem wrote a letter to his Greek counterpart Papandreou. Cem’s intention was to prepare ground for restarting the dialogue process which had been interrupted with the events of confidence-breaking Öcalan crisis. In the letter Cem expressed his views for the improvement of bilateral relations and mentioned about Turkey’s sensitivity, saying: “Our initial step should be to address the problem of what is perceived in Turkey as links that exist in Greece with terrorist organizations and their systematic encouragement. This is a matter of crucial importance for us and recent events have made it imperative that this issue be handled in an explicit manner and at the bilateral level between our two countries.

I, therefore, suggest that Turkey and Greece conclude an agreement to combat terrorism. Resolution of this issue would permit us to approach our known differences with greater confidence. The substance of this agreement may be inspired by accords we have already signed with some of our other neighbors, but is should also be specific to the nature of the problem as it affects our relations. We have some further ideas in this respect which we are ready to share with you.”[42]

This approach of Turkey received positive response from Greece and Papandreou. In his reply dated 25 June 1999, he expressed his appreciation that the wording of the attempt for improving the relations came from Turkey and added that Greece’s anticipations were in the same direction. Papandreou also stressed in his reply that Greece was willing to determine the conflict matters within the scope of International Law and agreements and listed the topics relevant to the interest of both Greece and Turkey as: cultural affairs, tourism, environmental issues, organized crime, economic cooperation and ecological problems.[43]

Within the moderate dialogue process, the sides have concentrated on matters other than major conflict issues between them and tried to foster cooperation. This made an impact that CBM had to be implemented in determination and created optimism for the realization of the second phase of relations to be based on that cooperation. In fact, the formal visits exchanged between the two and the noted willingness displayed for the concluded agreements to come into force are notable efforts in this respect.

Confidence Building Measures and Turkish-Greek Economic Cooperation Efforts

How did the political problems effect economic relations? Have the conflict issues influenced the foreign trade between Turkey and Greece negatively? How was the trend in mutual trade particularly during recession years and in the years following those? The answers to these questions will also contribute to the understanding of the positive impact of economic relations over the whole bunch of relations.

For long years, the development of economic relations between Turkey and Greece has been rather weak due to the existence of political/legal conflicts between them. Though the trade figures kept on growing gradually, it was possible to catch the same trend in economic cooperation. The stability was not reached due to political conflicts and this phenomenon made negative impact on joint investment and flow of currency. During the 1980s Turkish and Greek governments took controversial stance in viewing conflict issues between them. During this period, contrary to the Turkish approach by T. Özal, who deemed economic cooperation to be a stepping stone to the improvement of the relations in general. However, the PASOK government under the leadership of A. Papandreou put forth conditions for the initiation of the dialogue process. Greece being a member of the EU and Turkey being a candidate influenced competition between the two.

The solid steps taken towards the development of foreign trade and economic cooperation were achieved to a great extent in the period after 1999, after the CBMs came to life. The dialogue process started for the solution of conflicts between Turkey and Greece, as well as the process leading to the EU membership, were supported with the cogent attempts by both parties. This course was traced in economic cooperation efforts too. When considered from a general perspective, trade between Turkey and Greece was not much affected by the interruption of the dialogue process and controversy. Shortly, since the amount of trade was rather low, it was not a deterrent factor for resolving the major conflict issues. Their trade relations were neither negatively nor positively influenced by the dialogue process. However when their foreign trade figures increased, their mutual trade amounts would increase in parallel. Moreover, joint investments and endeavors for economic cooperation remained rather small. Accordingly, it is remarkable that after 1999, with the real initiation of the dialogue process, in line with the political improvements, the efforts of the businessmen and industrialists started to boom for maintaining better cooperation.

In fact, one of the suggestions included in the CBMs which turned into an agreement in 2000 aimed to foster common efforts of cooperation between Turkey and Greece, in the field of economy.[44] The Economic Cooperation Agreement concluded in Athens on 4 February 2000 envisaged; the Parties for the sake of promoting economic cooperation agree to join efforts on the fields including ship building and repairing, energy, agriculture and agro-industry, construction plus its consultancy services, transport, including maritime transport, telecommunication, banking including other financial services, tourism, vocational and management training, environment issues and health.(Article 2)

Under this framework the Parties mutually encouraged private sector firms and organizations for fostering economic cooperation, and agreed to develop a favorable climate for investment, facilitate the exchange of commercial and economic information, support exchanges and contacts of business delegations and representatives, promote the organization of fairs, exhibitions and symposia. They confirmed to make every effort to maintain the required conditions for the improvement of trade relations.(Article 3)

Moreover the Parties agreed to build up the Turkish-Greek Joint Economic Commission to facilitate and improve their economic cooperation. This commission was intended to propose the measures to be taken for the full implementation of the above Agreement, establish the general guidelines for economic cooperation, identify and promote opportunities to increase cooperation in the investment field and will serve as a consultation forum between the Parties on specific matters.(Article 5)

TURKISH-GREEK ECONOMIC RELATIONS: THE PERIOD AFTER 1990

It will be helpful to analyze Turkish-Greek relations by amount of foreign trade, flow of currency, joint investments, movements of people and dimensions of economic cooperation. When Turkish Greek relations are studied in periods, considering the difference in the amounts of trade, it is not be wrong to conclude that since 1970s economic relations augmented. Both sided admit that in spite of the positive increase in the recent years, it is still possible to elevate the figures even more. However, despite the increase in trade figures, Parties rather avoid the dispersion of cooperation fields and seem particularly reluctant to make border trade and bring investment facilities for the realization of solid projects. Efforts to dissolve such difficulties were considered during the 1988 Davos Summit. In fact after this summit the Turkish-Greek Business Council was founded to enable the businessmen to convene so that they could focus on forming joint projects.[45]

Turkish-Greek Business Council gathered meetings focusing on joint investment fields, investment facilities, finding and proposing solutions to conflict issues, organized conferences in third countries and searched for prospects of joint investment projects and thus contributed to the development of economic cooperation. However these attempts were not fruitful since political unrest hindered rapprochement, and the level of economic cooperation did not reach desired dimensions. On the other hand, 1970s and 1990s displayed considerable difference in the aspect of conflicts making an impact upon economic relations. Despite the decrease in foreign trade capacity during the troublesome years of 1974-1975, in the 1990s, it increased regardless of the controversy in political relations. (See Table I)

How did the political issues effect the economic relations between Turkey and Greece? Did the political problems influence foreign trade negatively? It is a fact that political relations between Turkey and Greece displayed ups and downs in line with the course of disputes. This situation can be easily observed between 1970-1980, being a period of tensions. For instance in 1975, a year after the Turkish intervention to Cyprus, the trade figures had fallen from 36 million $ to 986 thousand $. In 1976, it increased to 6,5 million $, and in 1977 to 16,8, in 1978 trade dropped back to 7,9, in 1979 rebounded to 30,9. The total rose in 1980 to 73,5, and fell in 1981 to 69,7. In 1982 trade jumped to 144,2 but shrank in 1983 to 78,6 million $.[46] In the period after 1990 Turkey and Greece came to the brink of war when the Kardak Rocks crisis broke out. However, during the crisis year, 1994 and in the following years, the trade figures continued to increase. Finally, the foreign trade capacity kept on growing in the recent years (see Table I).

On the other hand, one can observe change in the kinds of goods and services exported and imported between 1996 and 2000. As for the export items from Turkey to Greece; while agricultural products and metal products exhibited slight change, there was considerable change in the share of industrial products.[47]

As can be seen in table 1, though frequent disputes broke up in the period after 1990, the foreign trade was not influenced much by this politically shaky situation. The first half of the 1990s despite the concluding of Athens and Istanbul declarations plus the Madrid Declaration, was spent for efforts of trying to build up mutual confidence. Particularly Greece’s claims about Turkey’s violating national air space limits of Greece and FIR violations brought up the need for CBMs. During 1994-1995 after Greece’s approval of the UN Law of the Sea, Turkey declared to it would consider “casus belli” Greek attempts to widen its territorial waters limit to 12 miles in the Aegean. Following that in 1996 Kardak Rocks crises broke out and was settled in 1997-98. Than the tension involving the deployment of S-300 missiles to Cyprus came to fore. Finally in February 1999 the Öcalan crises constituted the climax of all tensions. Although all these negative impacts influenced economic relations, on the whole the foreign trade figures increased considerably. Another reason for this increase is of course Turkey’s entering in to the Customs Union with the EU at the end of 1995.