|
 But while neither side has shown any interest in a military
escalation, Russia has made clear it will exact economic revenge
through trade and tourism. Prime Minister Dmitry Medvedev said on
Wednesday that important joint projects could be canceled and
Turkish firms could lose Russian market share.
The downing of the jet on Tuesday was one of the most serious
publicly acknowledged clashes between a NATO member and Russia for
half a century, and further complicated international efforts to
battle Islamic State militants in Syria.
Russian President Vladimir Putin said the plane was attacked when it
was 1 km (0.62 miles) inside Syria and warned of "serious
consequences" for what he described as a stab in the back
administered by "the accomplices of terrorists".
U.S. President Barack Obama and French President Francois Hollande,
seeking to forge a broader alliance against Islamic State after
attacks in Paris this month, pressed Russia to focus on the jihadist
group and urged Moscow and Ankara not to let the situation escalate.
 Speaking at a business event in Istanbul, Erdogan said the Russian
jet had been fired at while in Turkish airspace but had crashed
inside Syria, although he said parts of it landed in Turkey and
injured two Turkish citizens.
"We have no intention of escalating this incident. We are only
defending our own security and the rights of our brothers," Erdogan
said, adding Turkey's policy in Syria would not change.
"We will continue our humanitarian efforts on both sides of the
(Syrian) border. We are determined to take all necessary measures to
prevent a new wave of immigration."
Turkey has been angered by Russian air strikes in Syria targeting
Turkmens near its border, who are Syrians of Turkish descent. It had
repeatedly warned Russia over airspace violations since October and
last week summoned the Russian ambassador to protest against the
bombing of Turkmen villages.
Putin has said Russian planes had in no way threatened Turkey, but
had merely been carrying out their duty to fight Islamic State
militants inside Syria.
Erdogan dismissed that version of events.
"It has been said that they were there to fight Daesh," he said of
Russian air strikes, and using an Arabic acronym for Islamic State.
"First of all, the Daesh terrorist organization does not have a
presence in this region of Latakia and the north where Turkmens are
based. Let's not fool ourselves."
He said Turkey had made a "huge effort" to prevent an incident like
the downing of the Russian aircraft, but that the limits of its
patience had been tested.
 Putin on Wednesday accused Turkey's political leaders of encouraging
the "Islamisation" of Turkish society, something he described as a
deeper problem than the downing of the jet.
ECONOMIC REVENGE
German Chancellor Angela Merkel said the downing of the jet had
complicated efforts to find a political solution in Syria and said
everything needed to be done to avoid an escalation.
"Of course every country has a right to defend its territory but on
the other hand we know how tense the situation is in Syria and in
the surrounding area," she told parliament, adding she had asked
Turkish Prime Minister Ahmet Davutoglu to "do everything to
de-escalate the situation".
[to top of second column] |
Increased tensions could have significant economic and political
repercussions which are in neither Moscow nor Ankara's interests,
analysts warned. But both Putin and Erdogan are strong-willed
leaders ill-disposed to being challenged.
"If Erdogan becomes involved a cycle of violence, FDI (foreign
direct investment), tourism, and relations with the EU and U.S. will
all be in jeopardy," risk analysis firm Eurasia Group said in a
note.
"Our bet is that the episode will not escalate ... National interest
will probably prevail over emotion, but given the players, that's
not a sure bet."
Turkey imports almost all of its energy from Russia, including 60
percent of its gas and 35 percent of its oil. Russia's state Atomic
Energy Corporation (Rosatom) is due to build Turkey's first nuclear
power station, a $20 billion project, while plans are on the table
for a gas pipeline from Russia known as TurkStream.
Turkish building and beverage companies also have significant
interests in Russia.
Shares in Enka Insaat <ENKAI.IS>, which has construction projects in
Russia and two power plants in Turkey using Russian gas, fell for a
second day on Wednesday. Brewer Anadolu Efes <AEFES.IS>, which has
six breweries in Russia and controls around 14 percent of the
market, also saw its shares fall on Tuesday.
Russians are second only to Germans in terms of the numbers visiting
Turkey, bringing in an estimated $4 billion a year in tourism
revenues. But Russian Foreign Minister Sergei Lavrov on Tuesday
advised them not to visit and one of Russia's largest tour operators
to the country said it would temporarily suspend sales of trips.
"Erdogan is a tough character, and quite emotional, and if Russia
pushes too far in terms of retaliatory action, I think there will
inevitably be a counter reaction from Turkey (like) tit-for-tat
trade sanctions, perhaps extending to things like the Russia nuclear
deal," said Nomura strategist Timothy Ash.
"But I think there is also a clear understanding that any such
action is damaging for both sides, and unwelcome. The ball is in
Russia's court now," he wrote in a note.
(Additional reporting by Can Sezer and Ayla Jean Yackley in
Istanbul; Maria Kiselyova in Moscow; Paul Carrel and Madeline
Chambers in Berlin; Writing by Nick Tattersall; Editing by Pravin
Char)
[© 2015 Thomson Reuters. All rights
reserved.]
Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
