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“This is an example of a controlled crises. As a parent I used this tactic”

I also think that this is a calculated measure, to introduce real consequences for Erdogan’s bad actions, initially in just an isolated area of our relations (not multi-lateral NATO). It establishes a precedent, kind of like the camel’s nose under the tent.

The article highlights the effects on the Turkish Lira, which has been trending downward (down 20% this year), and hit a new low in response to the news of US sanctions. It chipped about 1.5 to 2% more off their currency. Ouch.

Markets have been watching for potential repercussions from Turkey’s defiance of the US, EU and NATO on many issues (invading and ethnically cleansing the Kurdish Afrin area of Syria, supporting islamist jihadis, buying non-NATO compatible Russian air defense systems, violating Iran sanctions, widespread domestic repression, etc.).

Further sanctions could spark a capital flight to safety. They already have a capital flight problem, and its getting worse.

The Turkish economy has had a long and strong run, that supported Erdogan’s multiple re-elections and consolidation of power - but it seems like the party is over. In addition to the currency taking a sustained dive, montag813 points out that interest rates have jumped to 19.48 percent on their 10 year bonds. Foreign direct investment continues its three year slide, and budget deficits are worsening.

According to Bloomberg (1 Aug ‘18), “The Borsa Istanbul 100 index has lost 36 percent in dollar-adjusted terms this year, the second-worst performance in the world after Venezuela.”

The economy is still reported as growing, but prospects are grim going forward, as high debt loads in dollars and euros are starting to drive more businesses to shut or move out. The risk of a hard landing for the Turkish economy is growing. There is also a pretty marked brain drain going on in Turkey, which exploded during the purges after the 2016 coup attempt, and still continues.

Erdogan seems to have seen the economic problems coming, and moved up elections to lock in his position for five years - but now he owns it. The economy is likely going to be a growing problem for him. If we can exert pressure on him through the economy, with the effect of sanctions, we might finally have an effective tool against his bad behavior.