A muted response from Ankara towards the US announcement that it is to arm the Syrian Kurdish YPG was the backdrop to a recovery of the Turkish lira in the afternoon hours of May 10.

Those expecting an angry outburst from Turkish President Recep Tayyip Erdogan were instead presented with a relatively mild reaction relayed by Turkey’s foreign minister, Mevlut Cavusoglu.

In a live appearance on Turkish TV, Cavusoglu said nothing about the arming pf the YPG being a betrayal of a Nato ally – as it is perceived to be by many Turks – but merely stated: “Both the PKK [Kurdistan Workers’ Party] and the YPG are terrorist organisations and they are no different, apart from their names. Every weapon seized by them is a threat to Turkey.”

Observers said the moderate response was probably part of a strategy to avoid raising tensions ahead of Erdogan’s planned May 16-17 visit to Washington, where he will meet US President Donald Trump, a man whom he has openly praised.

The US wants to bolster the YPG ahead of what it sees as possibly conclusive battles with Islamic State in Syria, but Turkey regards the desire of the group, also known as the People’s Protection Units, for an autonomous Kurdish zone in northern Syria as dangerous. It would consider such an entity as a major national security threat, as it would bolster the hopes of the PKK to carve out an independent Kurdish state in southeast Turkey.

Ankara called loudly on the Obama administration to break with the YPG, arguing such a terrorist-linked group could not be allowed to establish a Kurdish canton on Turkey’s border, thus the lira tumbled during the early hours of May 10 over expectations that Trump’s move to arm the YPG in preparation for an assault on the IS stronghold of Raqqa might lead to a diplomatic stand-off.

However, with bilateral tensions not escalating, the lira gained back some ground later in the day to trade at 3.5913 against the dollar, down 0.90% d/d, as of 15:50 local time.

Placing hopes in Trump

Ankara hopes to have better ties with Washington under Trump than it did under his predecessor. The Turkish government and the Obama administration were long at loggerheads over American support for the YPG. Under Obama, Washington also failed to comply with Turkey’s request to extradite the man Ankara claims was behind last year’s failed coup, Islamic cleric Fetullah Gulen. On May 8, Turkish  Justice Minister Bekir Bozdag met with US Attorney General Jeff Sessions in Washington, reiterating the demand for the extradition.

Turkish PM Binali Yildirim said on May 10 that arming the YPG – which, along with its umbrella force, the Syrian Democratic Forces (SDF) – is regarded by the US administration as the most reliable ground force in the battle against Islamic State – would mean consequences and a negative result for the US. However, the US administration “still has the chance to consider Turkey's sensitivities on the PKK”, he added, according to Reuters.

The PKK, which the US also classifies as a terrorist organisation, has fought an insurgency in Turkey since 1984. Turkey is worried that American arms destined for the YPG would eventually end up in the hands of PKK militants, who may go on to use them in attacks against Turkish security units.

However, the US said that after the battle for Raqqa is over, it will seek to retrieve certain weapons from the YPG. “We want to reassure the people and government of Turkey that the US is committed to preventing additional security risks and to protecting our Nato ally,” chief Pentagon spokesperson Dana White said in a statement on May 10.

The weapons and equipment provided will include small arms, machine guns, construction equipment and armoured vehicles, a US official told CNN.

Not ‘make or break’

Looking at the scheduled Erdogan-Trump meeting, Wolfango Piccoli of Teneo Intelligence commented on May 10 in an emailed note: “The long-awaited meeting between Erdogan and Trump is unlikely to solve any of the issues that have strained US-Turkey ties. Regardless, the meeting will not be a ‘make or break’ moment in the bilateral relationship.”

Piccoli said he expected that arming the Kurds will indeed further strain already tense US-Turkish relations. Even, he added, although Erdogan has little room for manoeuvre, any retaliation by the Turkish president, such as by denying the US crucial access to Incirlik airbase in southern Turkey, is not Teneo’s base-case scenario as things stand.

As well as the arming of the YPG and the Gulen extradition request, Erdogan will have another substantial matter on his agenda when he meets Trump. Turkey would also like to see the extradition of Mehmet Hakan Atilla, a former deputy CEO at Halkbank, who was arrested in New York on March 28 on charges of conspiring with Turkish-Iranian gold trader Reza Zarrab to help Iran evade sanctions.