The ambassadorial dispute between Turkey and Western countries over the criticism of the imprisonment of the philanthropist Osman Kavala has officially been settled.

There has been no talk of the expulsion of ten ambassadors, including Germany and America, since they tweeted, they adhered to diplomatic rules.

As a result, the first thing that stabilized was the value of the Turkish lira, which had collapsed at the beginning of the week.

With exchange rates of 9.46 lira per dollar and 10.99 lira per euro, the level before the outbreak of the most recent diplomatic crisis was reached again.

Andreas Mihm

Business correspondent for Austria, East-Central, Southeastern Europe and Turkey based in Vienna.

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The fundamental problems have not changed, however; they have only been highlighted once more by the most recent interventions by President Recep Tayyip Erdoğan, probably for domestic policy reasons.

Evidence of this can be found in the previously unpublished results of a current survey of German companies in Turkey.

According to figures from the “World Business Outlook Autumn 2021” of the German Chamber of Commerce and Industry, 73 percent of German companies in Turkey see the exchange rate as one of the greatest business risks for the next twelve months.

In second place, with 62 percent of the mentions, are the economic and political framework conditions of the trading partner, which is economically closely linked with the EU.

Most important export market

For Germany, Turkey ranked 17th for imports and 16th for exports in 2020.

From Turkey's point of view, Germany is the most important addressee for exports and the third largest supplier.

Around 7500 German companies employ 150,000 people in Turkey.

Regardless of all the hardships, business picked up last year as well as this year: From January to August 2021, German exports to Turkey increased by 9.0 percent compared to the same period of the previous year.

Imports even recorded a growth of 20.3 percent - which should also reflect the price advantage of Turkish exporters due to the sharp devaluation of the lira of 20 percent this year alone.

However, the devaluation also makes the import bill of Turkey, which is dependent on energy resources, more expensive.