Rising Tensions Between Greece and Turkey
By Jake Willms, Quantitative Analyst
With everything that is going on in the U.S. this year – stock market volatility, coronavirus social distancing orders, and the upcoming election to name a few – it is easy to lose sight of what is going on internationally. Here’s something you should be paying attention to.
The Eastern Mediterranean has recently become quite the crowded space. Aside for the normal flow of goods and Russia’s new naval hub, Greece and Turkey have begun to clash over their drilling sites. Each country has conflicting claims to their various “exclusive zones” within the waters where they own the rights to drill. Greece claims that each of their islands have their own unique continental shelf of exclusivity for drilling, and Turkey doesn’t seem to agree, despite the E.U. standing firmly behind Greece and issuing sanctions last July. Turkey claims this interpretation of law is unfair and allows Greece to unjustly lay claim to their own exclusive zones.
Relations between the two countries have continued to deteriorate over this disagreement. Earlier this week, both Greece and Turkey have increased their military involvement, conducting military exercises and sparking concerns within Europe. If things were to flare up, international markets could suffer as a result, and the U.S. could find trouble being neutral and maintaining their friendly relationship with both countries.
Many European countries have demonstrated success in dealing with the Coronavirus. With their economies starting to reopen, some investors think that European equities are attractive relative to those in the U.S. Still, if tensions keep rising between Greece and Turkey, things might turn sour. And fast.