Clare Nuttall in Bucharest -

Nato Secretary-General Jens Stoltenberg has said the alliance will protect Turkey if the conflict in Syria spills across the border, as Islamic State fighters close in on taking the Syrian border town of Kobane.

At a press conference in Warsaw on October 6, Stoltenberg told journalists, "Turkey should know that Nato will be there if there is any spillover” from the fighting in Syria.

"The main responsibility for Nato is to protect all allied countries,” Stoltenberg said, according to Reuters. “Turkey is a Nato ally and our main responsibility is to protect the integrity, the borders of Turkey and that is the reason why we have deployed Patriot missiles in Turkey.”

After a three-week siege of Kobane, a town close to Syria’s border with Turkey, the IS flag was seen flying over the eastern part of the city on October 6. There are reports of street fighting overnight in Kobane, with parts of the city already under the control of IS fighters, according to the BBC. If the town falls, IS will control a long stretch of the border between the two countries.

Since the siege of Kobane, around 160,000 people, mainly Kurds, from the city have fled into Turkey, adding to up to 1.5m Syrian refugees already in the country. In recent days there have been several clashes between the local Kurdish population, angered by Ankara’s lack of action to defend Kobane, and Turkish security forces.

On October 2, the Turkish parliament has approved a motion to allow a military force in Iraq and Syria against the IS. Some three-quarters of MPs voted in favour, signalling a major change in Turkey’s stance on intervention. The vote would allow Turkish forces could now be deployed in both countries, alongside around 40 other members of a Nato-led coalition, as well as allowing foreign troops access to Turkish territory. However, it is not yet clear how the Turkish government will choose to act.

Turkish Prime Minister Ahmet Davutoglu said in an interview with CNN on October 6 that Turkey will only send ground troops to Syria if the US agrees to aim for regime change - namely the removal of President Bashar Al-Assad - in Syria.

The Turkish government had previously seemed reluctant to get involved in the conflicts in Iraq or Syria - both because of fears of retaliation by militants and from concerns over how this would affect the relationship with the domestic Kurdish population. However, there has been a significant change of mood within the country in recent days, due both to the release of 46 Turkish hostages held by IS and the advance of the conflict towards the Turkish-Syrian border.

So far, the Turkish economy and its attractiveness to investors has not been significantly affected by the events in neighbouring countries; domestic political uncertainty in the run-up to the August presidential election has been of more concern.

On October 3, Fitch Ratings affirmed Turkey's long-term foreign and local currency issuer default ratings at 'BBB-' and 'BBB', respectively, with stable outlooks.

However, the ratings agency noted that, despite “encouraging signs” of economic rebalancing at home, “Turkey's buffers against potential volatility in global investor risk appetite remain relatively thin in the light of the capacity for domestic policy reversals, doubts over the durability of economic rebalancing and rising geopolitical risk.” Exports to Iraq, Turkey’s second largest trading partner, have also slumped in recent months.