Relations between Greeks and Turks often seem synonymous with antagonism, suspicion, and historical enmity. The two neighboring states have frequently been at odds over the Aegean Sea and Cyprus, and the two peoples share a mutual distrust as a result of a sour legacy and their competing interests. Yet, Greece and Turkey have also experienced periods of interaction and cooperation, which derives from their geographic proximity and a growing sense of interdependence. Since 1999, and following an intense post-cold war competition, Greece and Turkey have adopted a policy of rapprochement, signing numerous bilateral agreements and building economic and cultural links. In addition, the prospect of Turkey’s accession to the European Union, however distant and uncertain, provides some hope for more cooperation in the future between these two historical enemies.

Although security concerns are still a source of tension between Greece and Turkey, growing ties in the business, civil society, and cultural sectors are beginning to ease competition. At the same time, the impact of the European Union is increasingly felt in the business climate, and the relationship between the two states is becoming evermore entangled with the European future of Turkey. The decision of both countries to Europeanize their bilateral differences could have two conflicting outcomes: on the one hand, it might facilitate the process of rapprochement in the spirit of European integration; on the other, it could complicate and deteriorate the process under the shadow of European introversion and enlargement fatigue. Thus, it is important to analyze the Greek-Turkish relationship in light of the latest bilateral developments and the European Union’s engagement with the regions.

Emerging Cooperation Amid Unsolved Issues

For most of the 20th century, relations between Greece and Turkey were defined by the politics of hard power with national security interest dominating the agenda of their respective foreign policies. Since the early 1970s, the most divisive matters concerned the delimitation of continental shelf and territorial waters in the Aegean, the control of airspace, and the militarization of the Greek islands. The episode over the Aegean islets Imia/Kardak in 1996 brought the two countries to the verge of war. In effect, parts of the Aegean Sea and its airspace have developed into contested borders with no imminent possibilities for agreement. Even the means of solving the dispute differ from one country to the other. Greece recognizes only the dispute over the continental shelf and claims that the disagreement should be resolved at the International Court of Justice according to existing international law. Turkey looks at all bilateral matters as a package and favors bilateral negotiations and bargaining. One major bilateral concern has to do with what Greece assumes to be a violation of its airspace by Turkish airfighters. Turkey rejects the ten-mile airspace claimed by Greece, arguing that Greece is only entitled to a six-mile airspace, and therefore sends its aircrafts as close as six miles to the Greek coast. This practice results in aircraft incidents between the two states which have become something of a routine. To keep its military at the state of alertness necessary to catch up with the militarily superior Turkey, Greece spends between 4.5 percent and 5 percent of its GDP on military expenditures, the highest such percentage in Europe. Bilateral relations become yet more complex with the inclusion of the Cyprus dispute, which has been affecting Greek-Turkish relations with unabated intensity since the 1950s. The list of non-settled bilateral issues also includes problems which are remnants of the Ottoman past.

Against the background of unsolved political and historical strife, a positive climate of cooperation in the business, trade, cultural, and civil society sectors has been developing since 1999. The two governments have stipulated a number of high level agreements regarding the promotion of tourism, transport, environmental protection, cultural cooperation, trade, double taxation, shipping, refugee smuggling, drug trafficking, and fighting terrorism. As a result of these agreements, trade between Greece and Turkey has been on the rise, although its overall volume is still limited. Cooperation has also advanced in other areas, like tourist exchanges in the island regions, facilitated transport due to the recent introduction of a joint rail link between Thessaloniki and Istanbul, increased collaboration amongst NGOs, many academic exchanges, and joint popular culture projects. In addition, Greece and Turkey are cooperating in the context of sub-regional groupings in South East Europe, the Black Sea, and the Middle East.

The most important development, however, is the recent investment by Greece’s largest banks in the promising Turkish market. First, the National Bank of Greece, the country’s biggest financial group, agreed to pay an unprecedented 2.3 billion euros (US$2.9 billion) for a controlling stake in Finansbank, Turkey’s eighth-largest bank. The EFG Eurobank then became the second Greek bank to make an acquisition in Turkey, with an agreement to buy 70 percent of Tekfenbank. The third major bank, Alpha Bank, is also interested in obtaining a stake in the Turkish market. There are, however, only 10 Turkish companies investing in Greece as compared to 228 Greek firms in Turkey, with some small companies investing mostly in the food business.

These so-called “low politics” or “soft issue” developments have special resonance in the relations between the two countries in that they introduce new actors to the bilateral scene and lead to the creation of new networks of cooperation across borders and in different fields of action. New actors and new networks are bringing the two sides together, creating synergies and common interests and generating a new strategic dynamic for the development of further schemes. For Greeks, Turkey is a natural and familiar area to expand their activities. For Turks, Greece is a door to Europe and the West. Soft issue cooperation has a positive spillover, much needed on both sides, in the way in which the two peoples perceive the other.

It seems that economic considerations and public diplomacy are affecting the choices of political elites who are trying to avoid polarization, even when “hot incidents” occur in the Aegean. In both countries there are two opposing tendencies: on one end, a skeptical political class, a negative press, and a negatively predisposed public opinion which perceive the bilateral relationship from a security perspective as a zero-sum game; on the other, the flexible and practical political and economic elites and civil society groups who see this relationship as a positive sum challenge with win-win perspectives. The question is whether the logic of cooperation in economic, tourist, or civil society areas can generate the positive dynamic necessary for an agreement on the most controversial and divisive security matters and whether low politics cooperation is strong enough to push high politics in the direction of sustainable rapprochement. The discussion of security questions is a highly charged process on both sides and entails a high political cost, and any compromise would require a systematic preparation of the respective public opinions. While such a process has not yet started, it is the first time in the history of Greek-Turkish relations that low politics cooperation is taking on such momentum, which, in many ways, is the difference between the current political climate and past efforts at rapprochement.