Türkiye Earthquake Could Result in Loss of Up to 1% of Country's GDP in 2023

This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
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Türkiye Earthquake Could Result in Loss of Up to 1% of Country's GDP in 2023

This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)
This handout photograph taken and released by Turkish agency DHA (Demiroren News Agency) shows smoke rising from burning containers at the harbor of Iskenderun in Hatay, a day after a 7.8-magnitude earthquake struck the country's southeast, on February 7, 2023. (Photo by Handout / DHA (Demiroren News Agency) / AFP)

The potential economic effects of the earthquake in Türkiye could result in a loss of up to 1% of the country's gross domestic product this year, the European Bank for Reconstruction and Development (EBRD) said in a report published on Thursday.

The bank added this is a "reasonable estimate" due to the expected boost from reconstruction efforts later this year, which will offset the negative impact to infrastructure and supply chains, Reuters said.

"The earthquake affected to a large extent agricultural areas and areas where there is light manufacturing, so spillovers to other sectors are limited," EBRD chief economist Beata Javorcik told Reuters.

Türkiye and neighboring Syria have been rocked by a devastating earthquake on Feb. 6 which has killed more than 41,000 people and left millions in need of humanitarian aid, with many survivors having been left homeless in near-freezing winter temperatures.

Growth for Türkiye, the single biggest recipient of EBRD funds, has been revised down to 3% from 3.5% in 2023, without considering the impact of the earthquake in the estimates.

The bank added that growing external financing requirements and political uncertainty associated with elections in 2023 create significant economic vulnerabilities.

Türkiye’s earthquake has thrown into disarray plans for elections to be held by June, sparking frantic debate within President Tayyip Erdogan's government and the opposition over a possible delay.

"As depreciation of the Turkish lira outpaced inflation since 2015, Türkiye’s exports have been growing fast, benefiting from lower costs expressed in US dollars," the report added.

Türkiye’s lira hit a fresh record low on Wednesday.



Greenland Independence Is Possible but Joining the US Unlikely, Denmark Says

The Greenlandic (L) and Danish flags are pictured at the Ministry of Finance in Copenhagen on January 8, 2025. (AFP)
The Greenlandic (L) and Danish flags are pictured at the Ministry of Finance in Copenhagen on January 8, 2025. (AFP)
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Greenland Independence Is Possible but Joining the US Unlikely, Denmark Says

The Greenlandic (L) and Danish flags are pictured at the Ministry of Finance in Copenhagen on January 8, 2025. (AFP)
The Greenlandic (L) and Danish flags are pictured at the Ministry of Finance in Copenhagen on January 8, 2025. (AFP)

Greenland may become independent if its residents want, but is unlikely to become a US state, Denmark's foreign minister said on Wednesday after US President-elect Donald Trump refused to rule out force to take control of the Arctic island.

Greenland's leader held talks on Wednesday with the Danish king in Copenhagen, a day after Trump's remarks thrust the fate of the mineral-rich and strategically important island, which is under Danish rule, to the top of world headlines.

Trump, who takes office on Jan. 20, said on Tuesday he would not rule out using military or economic action to make Greenland part of the United States. The same day, Trump's eldest son, Donald Trump Jr., made a private visit to Greenland.

Greenland, part of NATO through the membership of Denmark, has strategic significance for the US military and for its ballistic missile early-warning system since the shortest route from Europe to North America runs via the Arctic island.

The president-elect has indicated he would pursue a more combative foreign policy that disregards traditional diplomatic formalities.

Greenland, the world's biggest island, has been part of Denmark for 600 years although its 57,000 people now govern their own domestic affairs. The island's government led by Prime Minister Mute Egede aims for eventual independence.

"We fully recognize that Greenland has its own ambitions. If they materialize, Greenland will become independent, though hardly with an ambition to become a federal state in the United States," Danish foreign minister Lars Lokke Rasmussen said.

He told reporters the United States' heightened security concerns in the Arctic were legitimate following increased Russian and Chinese activity in the region.

"I don't think that we're in a foreign policy crisis," he said. "We are open to a dialogue with the Americans on how we can possibly cooperate even more closely than we do to ensure that the American ambitions are fulfilled."

Still, although Denmark itself played down the seriousness of Trump's threat to its territory, the returning president's openly stated ambition to expand US borders has jolted European allies less than two weeks before he takes office.

France's foreign minister, Jean-Noel Barrot, said Europe would not let other nations attack its sovereign borders, although he did not believe the US would invade.

German Chancellor Olaf Scholz expressed surprise at Trump's comments about Greenland and Canada, underlining that European partners unanimously uphold the inviolability of borders as a cornerstone of international law.

STRAINED RELATIONS

Greenland's relations with Denmark have lately been strained by allegations of colonial-era mistreatment of Greenlanders. Egede has said the island is not for sale, while in his New Year speech he stepped up his push for independence. Denmark says the territory's fate can be decided only by Greenlanders.

Danish Prime Minister Mette Frederiksen said on Tuesday she could not imagine Trump's ambitions would lead to US military intervention in Greenland. Denmark's military capabilities there are limited to four inspection vessels, a Challenger surveillance plane and dog sled patrols.

Responding to Trump's threat of tariffs against Denmark, which according to analysts at Danske Bank could potentially be "quite harmful to Danish companies, Frederiksen said she did not think a trade war with the United States was a good way forward.

Denmark is home to Novo Nordisk, Europe's most valuable company, which makes weight-loss drug Wegovy that has become hugely popular in the United States, the Nordic country's biggest trading partner.

The Danish royal palace gave no details ahead of King Frederik's meeting in Copenhagen on Wednesday with Greenland's Prime Minister Egede.

While many Greenlanders dream of independence from Denmark, the king remains popular on the island, having spent extended periods there, including a four-month expedition on the ice sheet. Last month, the royal court modified its coat of arms, enlarging a polar bear that symbolizes Greenland.

"I'm sure the king is really the person best placed in Denmark to deal with this issue right now because he has a long history with Greenland," Damien Degeorges, a Reykjavik-based consultant specializing in Greenland, told Reuters.

"He's popular in Greenland. So he can clearly be helpful to the Danish-Greenlandic relationship."

Trump already raised the issue of the US taking over Greenland during his first presidency, but his latest remarks still left many Danes baffled.

"I find it extremely ridiculous," said Jeppe Finne Sorenson, a data engineer in the Danish capital. "We have an alliance, we're allies. So this doesn't really respect that."