The protests erupted following the arrest of Ekrem Imamoglu, accused of corruption and aiding the PKK, a designated terrorist group. The opposition, particularly the Republican People’s Party (CHP), views these charges as a political maneuver to sideline Imamoglu, Erdogan’s main rival, ahead of the 2028 elections. This has led to mass demonstrations across Turkey, with tens of thousands protesting, marking the largest such events in over a decade.
Economic Effects on Turkey
The unrest has triggered a market meltdown, with the BIST-100 index plunging 15% and the Turkish Lira falling 4% in a week. The central bank responded by selling $10 billion in reserves and hiking interest rates to 46%, aiming to stabilize the economy amidst growing uncertainty.
Impacts on Europe
For Europe, as Turkey’s largest trading partner, the instability poses risks to trade and investment, given the €206 billion trade volume in 2023. Additionally, political turmoil could exacerbate migration issues, with Turkey hosting over 3.6 million Syrian refugees, potentially straining EU resources and policies.
Turkey’s Recent Violent Protests
The recent wave of violent protests in Turkey, commencing on March 19, 2025, has captured global attention due to their scale and implications. These events, triggered by the detention of Istanbul Mayor Ekrem Imamoglu, reflect deep political and economic tensions, with significant repercussions for both Turkey and Europe. This analysis delves into the causes, economic impacts, and broader effects, drawing on recent reports and data.
Background and Causes
The protests were ignited by the arrest of Ekrem Imamoglu, a 54-year-old politician from the CHP, who has served as Mayor of Istanbul since 2019. On March 19, 2025, Turkish authorities detained him on allegations of corruption and providing assistance to the Kurdistan Workers’ Party (PKK), an organization designated as a terrorist group by Turkey and its Western allies.
Imamoglu’s notable victories against Erdogan’s allies in the 2019 and 2024 municipal elections, securing control of most major Turkish cities, positioned him as a significant challenge to Erdogan’s dominance. The opposition, supported by the CHP and other groups, has described the charges as politically motivated, aimed at blocking Imamoglu’s potential candidacy in the 2028 presidential elections . This perception fueled widespread public outrage, leading to demonstrations in cities like Istanbul, Ankara, and Izmir, with the largest crowd gathering outside the Istanbul Metropolitan Municipality’s headquarters. These protests, the largest in Turkey in over a decade, saw tens of thousands defying government bans on gatherings, with university students playing a major role.
Economic Impact on Turkey
The political unrest has precipitated a severe economic crisis, evident in the financial markets’ response. The BIST-100 index, Turkey’s benchmark stock index, experienced its worst weekly drop since October 2008, plunging by 15%, with the banking index falling 9.37%. Concurrently, the Turkish Lira slumped by 4% in the week, trading at 38.0050 against the USD, down 6.7% year-to-date, and reaching above Wednesday’s record low of 42. The cost of insuring Turkey’s debt widened by 18 basis points to 322 bps, the highest since March 2024, according to S&P Global Market Intelligence data. In response, the Central Bank of the Republic of Turkey (CBRT) suspended its one-week repo auction, raised the overnight lending rate to 46%, and sold approximately $10 billion in foreign exchange reserves to stabilize the currency. Overnight interest rates climbed 134 basis points to 43.64%, dashing hopes of an April rate cut, with expectations now leaning toward a resumption in June. Finance Minister Mehmet Şimşek described these fluctuations as “temporary,” but the measures are expected to increase funding costs, potentially stifling investment and production.
| Economic Indicator | Impact |
|---|---|
| Turkish Stocks (BIST-100 Index) | 15% weekly plunge, trading 7.82% lower |
| Turkish Lira | 4% weekly slump, down 6.7% year-to-date |
| Cost of Insuring Turkey’s Debt | Widened by 18 bps to 322 bps, highest since March 2024 |
| Central Bank Actions | Sold ~$10 billion in FX, raised overnight lending rate to 46% |
| Overnight Interest Rates | Climbed 134 bps to 43.64% |
| Policy Rate Expectations | Expected to remain at 42.5% in April, cutting cycle may resume in June |
This table summarizes the immediate economic impacts, highlighting the severity of the market rout and the central bank’s interventions.
Implications for Europe
The economic and political instability in Turkey has significant ramifications for Europe, given the deep economic and political ties. Turkey is the EU’s 5th largest trade partner, with bilateral trade reaching a record high of almost €206 billion in 2023, comprising €111 billion in EU exports to Turkey and €95.5 billion in imports. The depreciation of the Lira could make Turkish exports cheaper, potentially increasing competition for European producers, while making EU imports more expensive for Turkey, possibly reducing demand. This trade disruption could affect European businesses, particularly in sectors like manufacturing and automotive, where Turkey is a key partner.
Beyond economics, the political unrest could strain EU-Turkey relations, impacting cooperation on critical issues such as migration. Turkey hosts over 3.6 million Syrian refugees, and any deterioration in the domestic situation could prompt increased migration flows to Europe, challenging the EU’s border and asylum policies. The EU-Turkey refugee deal, where Turkey agrees to prevent irregular migration in exchange for financial aid, could face renewed pressure, especially given reports of xenophobic violence against Syrians in Turkey, such as attacks in Kayseri and Antalya. Additionally, European leaders, previously critical of Erdogan, have been notably silent, possibly due to strategic interests like potential Turkish peacekeepers in Ukraine.
The Turkish diaspora in Europe has also responded, with mass demonstrations reported in London and Germany, calling for greater action against Turkish government crackdowns. This international dimension adds another layer of complexity, potentially influencing European public opinion and policy towards Turkey.
| European Impact Area | Details |
|---|---|
| Trade and Economy | €206 billion trade volume in 2023; potential disruptions affecting EU markets |
| Migration and Refugees | Hosts 3.6M Syrian refugees; risk of increased migration flows to EU |
| Political Relations | Strain on EU-Turkey relations, impacting cooperation on migration and security |
| Diaspora Response | Protests in London and Germany, influencing European policy and opinion |
This table encapsulates the multifaceted impacts on Europe, highlighting the economic, migratory, and political dimensions.
Conclusion
The protests in Turkey, rooted in the contentious detention of Ekrem Imamoglu, have far-reaching consequences. They reflect a broader struggle for democratic principles and political freedom, while their economic fallout threatens Turkey’s financial stability and Europe’s economic and security interests. The interplay between domestic politics and international relations underscores the need for continued monitoring, as the situation evolves with potential long-term implications for regional stability.
Key Citations
- Tense protests grow in Turkey over Istanbul mayor’s detention Reuters
- 2025 Turkish protests Wikipedia
- Hundreds arrested in third night of Turkey protests BBC
- Thousands rally in Istanbul as Erdogan issues warning against protests over mayor’s arrest AP News
- Thousands join march in Turkiye’s Istanbul to protest mayor’s arrest Al Jazeera
- Turkey’s protests over Istanbul mayor grow into ‘fight about democracy’ The Guardian
- Hundreds arrested in Turkey in protests against the detention of Istanbul’s mayor NPR
- Thousands protest against arrest of Istanbul mayor seen as key Erdoğan rival Euronews
- European Union Exports to Turkey Trading Economics
- EU trade relations with Türkiye European Commission
