Turkey faces showdown with US over Russia missile deal
Turkey is running out of time to avert a showdown with the United States over its plans to buy Russian air defences and spurn a counter-offer from its Nato partner, raising the chance of US sanctions against it.
Ongoing disputes over strategy in Syria, Iran sanctions and the detention of US consular staff remain unresolved, and the issue of missile defence threatens to widen the rift.
This week, despite the central bank maintaining interest rates well above inflation, Turkey's currency has fallen 1.5pc - largely due to renewed concerns over relations with Washington, traders said.
President Recep Tayyip Erdogan's government has missed a "soft deadline" set by Washington to decide whether to buy a $3.5bn (€3.1bn) missile shield system. The formal offer expires at the end of this month, US officials have said.
Without publicly rejecting the US proposal, Mr Erdogan has repeatedly said he will not pull out of a contract for Russia's S-400 defence system, due to be installed in October. Washington says Ankara cannot have both.
If it goes ahead with the Russian deal, Turkey also risks losing delivery of Lockheed Martin F-35 stealth fighter jets and could face sanctions under a US law known as Countering America's Adversaries Through Sanctions Act.
But Mr Erdogan has ruled out cancelling the deal with Russia, an increasingly powerful regional force which is building a nuclear power plant in Turkey and a gas export pipeline across Turkish territory to Europe.
"There can never be a turning back," Mr Erdogan said of the S-400 deal. Ankara may even seek to procure Russia's next generation S-500 system, he said.
Defence Minister Hulusi Akar said that US officials had told Turkey it would be impossible for Congress to approve the sale of F-35 jets if Ankara buys the S-400, but that Turkey was working to overcome those problems.
Turkey said it had already paid Moscow some of the bill, and analysts said Mr Erdogan, who is campaigning for local elections on March 31, would find it hard to back away from the Russian deal now.
That means the chance of US sanctions is increasing, defence analyst Can Kasapoglu said, adding that "diplomatic room for manoeuvre is narrow".