Economy
Türkiye calls for end to ‘senseless’ defense curbs among NATO allies
Türkiye urged NATO members Tuesday to eliminate defense trade restrictions and sanctions among allies, arguing that closer industrial cooperation is essential to strengthening military readiness and collective security.
“We must work together to eliminate trade restrictions and sanctions in the defense sector among allies,” Vice President Cevdet Yılmaz told the NATO Defense Industry Forum ahead of a gathering of NATO’s leaders in Ankara.
“If we want to enhance the alliance’s level of military readiness and strengthen our collective security, we must work together to remove these senseless sanctions and restrictions from the table.”
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a major NATO member.
Ahead of the NATO summit, its top officials reiterated that defense trade restrictions between NATO allies must be removed and expressed strong interest in joining Europe’s defense initiatives.
Calling for broader international collaboration, Yılmaz said Türkiye views defense cooperation not only through exports but also through joint production, design and technology development with allies.
He also urged greater integration of Türkiye into European defense structures.
“All bilateral restrictions among allies should be lifted, and Türkiye, which makes a significant contribution to NATO’s European pillar, should be able to participate in all European defense and security initiatives, particularly those of the European Union,” he said.
Without such cooperation, production capacity would expand more slowly and costs would rise, Yılmaz added, arguing that a more resilient Euro-Atlantic security architecture depends on aligning industrial capacity, technological expertise and operational experience toward common strategic goals.
“Türkiye is ready to play a role in this framework as a strong, reliable and contributing partner,” he said.
Türkiye aims to ‘play in 1st division’
Türkiye currently ranks 11th among global defense exporters and aims to enter the top 10 in the near future.
“Using a football analogy, Türkiye aims to play in the first division,” Yılmaz said.
Defense and aerospace exports have surpassed $11 billion over the past 12 months, with more than half of shipments destined for NATO allies and European Union member states.
The Turkish defense industry is now producing advanced systems across the air, land, naval, cyber and space domains.
Türkiye injected billions of dollars to transform from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
The country currently exports more than 230 defense systems to 185 countries.
As of Tuesday, Türkiye is hosting 32 NATO leaders, as well as officials from the Gulf and Asia-Pacific region, for a summit that it hopes will emphasize alliance unity and bolster deterrence.
U.S. President Donald Trump has threatened to pull his country out of the alliance while Washington has moved to withdraw troops, planes, ships and weapons from Europe due to tensions among allies over burden-sharing, defense spending and U.S. complaints about allies’ lack of involvement in Iran war.
Türkiye’s Yılmaz said the alliance was entering what he described as a new phase, or “NATO 3.0,” in which the burden of defense spending would be shared more equitably among members.
Last year, allies agreed on a defense spending goal of 5% of gross domestic product (GDP) by 2035.
“The next challenge is to transform higher defense spending into concrete capabilities and the industrial production capacity required to support them,” said Yılmaz.
He added that manufacturing capacity must be expanded rapidly and in a coordinated manner across the alliance.
‘Billions of dollars’ in pledges
As the summit kicked off, allies started to reveal large-scale defense pledges, with NATO Secretary-General Mark Rutte announcing new investments by member states.
The pledges included a push to spend $40 billion on NATO’s drone defense capabilities over the next five years and to train more soldiers as drone operators.
Tuesday’s pledges are “worth tens of billions of dollars and growing,” Rutte said.
The NATO chief also called for a “bonfire of red tape,” urging allies to slash administrative hurdles to rapidly expanding the alliance’s defense capabilities.
Russians are queuing up to adapt their cars to run on liquefied petroleum gas after Ukrainian attacks on refineries have created nationwide fuel shortages, increased gasoline prices and led to long lines at filling stations.
Egor Popov, whose Garant-Gas company fits equipment to convert cars to run on LPG in Moscow, said demand had multiplied.
“We have a waiting list until September,” he said.
Even before domestic gasoline prices rose to levels that have on occasions exceeded those in the United States and Europe, LPG in Russia was already relatively cheap and abundant, making Russia the global leader in its use in the form of propane or butane for fuelling cars.
According to the World Liquid Gas Association, the industry’s lobby group, Russia used around 3.5 million metric tons of LPG as car fuel in 2024.
According to Russian official data, motor fuel accounted for 54% of Russia’s LPG consumption last year. Just over a third was used as feedstock in the petrochemical industry.
Sergei Medvedev, who runs another company called Medvedev GBO that carries out refits, also said it was receiving far more inquiries than it could deal with.
“We had 276 calls in a day, but could only process around 30 or 40,” he said.
Medvedev added LPG had obvious advantages.
“No queues, with prices 50% or two thirds lower than gasoline at filling stations.”
Butane and propane, produced during natural gas processing and crude oil refining, are less emissions intensive compared with gasoline.
France’s rising borrowing costs are fueling concern among investors and economists that its public debt of 3.5 trillion euros ($4 trillion) could spiral higher just as political jockeying ahead of next year’s presidential election makes fiscal reform unlikely.
They cite the risk of a “snowball effect,” in which the average interest rate paid on government bonds exceeds economic growth, causing debt to rise relative to the size of the economy unless the government runs sustained primary budget surpluses.
“If nothing is done, the public debt could reach 203% of GDP by 2050. Strict budgetary discipline is therefore essential to stabilize public debt,” Organisation for Economic Co-operation and Development (OECD) Secretary-General Mathias Cormann told journalists in Paris last week.
Public debt topped 3.5 trillion euros in the first quarter, reaching 117.5% of GDP, according to official data. That is close to levels seen during the COVID-19 crisis and leaves France as the only eurozone country yet to reduce its debt burden from post-pandemic highs, the Cour des Comptes public audit office said.
France could in theory reverse the dynamic through stronger growth or primary budget surpluses. But with a fragile government that struggled to pass a 2026 budget through the deeply divided parliament, neither appears likely in the near term.
Credit rating firm Moody’s expects debt ratios to deteriorate further among Europe’s five biggest borrowers – Britain, France, Germany, Italy and Spain.
“The increase in interest payments relative to public debt will be greatest for France,” Moody’s Senior Vice President Sarah Carlson said at an economics conference in Aix-en-Provence last Thursday.
Keeping up with interest bill
Interest payments on the public debt reached 66 billion euros last year and are rapidly becoming the state’s biggest expense, likely to surpass the education and defense budgets.
The Cour des Comptes warned last week that the bill could approach 100 billion euros by 2029 as debt issued during years of ultra-low interest rates is refinanced at higher borrowing costs.
It has urged the government to detail how it will reduce the budget deficit from around 5% of GDP this year to the European Union’s 3% ceiling and eventually return to a primary surplus.
Without such a surplus, France risks having to borrow increasing amounts simply to cover interest payments as debt grows.
“If we aren’t able, we risk literally suffocating under the weight of interest,” said Carine Camby, a senior auditor at the Cour des Comptes.
Even then, reducing debt can take years. Italy, despite running primary surpluses for much of the past two decades, remains one of the most indebted advanced economies along with the United States and Japan.
Ahead of preparations to pass the 2027 budget in parliament this autumn, the premium investors demand to hold French rather than German bonds has returned to highs seen after last October’s suspension of a pension overhaul, overtaking the Italian-German spread.
Political constraints
The debt burden is becoming a political battleground ahead of next year’s presidential election, with leading centrist contenders Edouard Philippe and Gabriel Attal making fiscal discipline central to their campaigns.
A lawmaker from the far-right National Rally, Kevin Mauvieux, secured backing from the lower house’s finance committee on Thursday for a report sounding the alarm on the debt snowball effect.
“The longer we wait, the more painful the consequences will be,” he told lawmakers.
Finance Minister Roland Lescure responded by urging opposition parties, including the National Rally, to support the government’s 2027 budget when it comes before parliament in September.
Several minority governments have fallen trying to pass budgets since a snap parliamentary election in 2024 produced a hung parliament, keeping pressure on French bonds.
Economists expect bond-market volatility to remain elevated ahead of the election next year. Morgan Stanley recommended on Friday that clients reduce exposure to French debt, citing fiscal concerns.
NATO Secretary-General Mark Rutte called on Tuesday for a “transatlantic defense industrial revolution” and urged companies to take more risks with their investments.
“The hum of machinery must become a roar,” Rutte told the NATO Summit Defense Industry Forum in Ankara ahead of a gathering of the alliance’s leaders in the Turkish capital.
“Industry across all of the nations represented here must be ready to take more risk. The demand is there, and you know it.”
Rutte’s remarks came as allies started to reveal large-scale defense investment pledges at the industry forum, including an initiative to spend $40 billion on the alliance’s drone defense capabilities.
“NATO is rapidly expanding our ability to deploy and operate drones at scale. And at the same time, we are building robust counter-drone defenses to detect, identify, and neutralize drones,” said Rutte.
“Allies are investing over $40 billion in counter-drone capabilities over the next 5 years,” he said, as well as planning to step up operational training for soldiers.
NATO’s ability to deal with hostile drones was put to the test lately as Russian drones repeatedly violated allies’ airspace. NATO occasionally intercepted drones with fighter jets, raising questions about the efficacy of the alliance’s approach.
Several allies are also to jointly buy up to 10 Saab GlobalEye aircraft to replace NATO’s fleet of 14 AWACS early warning radar surveillance planes that are about 50 years old.
The announcements are part of NATO’s push to significantly increase defense expenditure.
‘Bonfire of red tape’
Rutte urged allies to slash administrative hurdles to rapidly expanding the alliance’s defense capabilities.
“We need a bonfire of red tape in our procurement and in our cross-border regulation,” he said.
“Both government and industry must continue investing in production capacity. Governments must also create the conditions for industry to expand and cooperate,” he added.
In 2025, European allies and Canada reported an annual increase in their defense expenditure of 20%, or an extra $139 billion, Rutte said, but industrial capacities would have to grow rapidly to meet the growing demand.
NATO is also to release “for the first time a consolidated demand signal outlining our requirements,” Rutte said.
NATO allies aim to spend 5% of gross domestic product (GDP) on defense and related expenses by 2035 in a bid to quickly boost defense capacity.
“We are moving in the right direction. The strategy is clear, but the match is far from over. And to win it, we need all team members to pull their weight,” Rutte said.
Türkiye stands ready to be one of the main forces behind the industrial transformation NATO needs, Haluk Görgün, head of the Presidency of Defense Industries (SSB), said Tuesday.
Görgün’s remarks came at the opening of the NATO Defense Industry Forum in Ankara ahead of a gathering of the alliance’s leaders in the Turkish capital.
The focus of the summit is a stronger Europe for a stronger NATO. The Trump administration has warned its allies that they must handle Europe’s security alone as the U.S. focuses on China and the Indo-Pacific region.
“The Turkish defense industry is ready to be one of the driving forces behind the industrial transformation that NATO requires,” Görgün said.
Serious upheavals, wars and security challenges across nearly every region of the world over the past three years have reshaped the global defense environment, he noted.
“What is certain is that we have very little time, that we must strengthen our industrial capacity, and that no single country can shoulder this burden alone,” Görgün added.
He said the forum was the “centerpiece” of this year’s summit, reflecting a growing understanding of the defense industry’s importance for the future of NATO allies.
He said NATO Secretary-General Mark Rutte’s decision to make defense industrial capacity a priority gave the forum special significance.
“Another factor that makes this forum truly unique is that it is being held in Türkiye,” he added, stressing the country’s unprecedented growth in the defense industry over recent years.
Görgün said Türkiye planned the forum in close cooperation with the NATO secretariat, adding that this year’s participant profile had reached “the highest level in terms of both content and quantity.”
Defense industry products
He also urged participants to view the capability demonstrations at the forum.
“I especially recommend that you do not miss the opportunity to get to know the Kızılelma up close,” referring to an unmanned combat fighter jet developed by Turkish defense firm Baykar.
Görgün told how NATO announced its Defense Production Action Plan at NATO’s 2023 Vilnius summit, agreed on the Industrial Capacity Expansion Pledge at the 2024 Washington summit and committed last year at The Hague to allocate 5% of its GDP to defense spending.
He said these steps showed the alliance’s growing consensus for industrial expansion.
“These goals will only become realistic if NATO members act in unison,” he said.
Görgün underlined that the Turkish defense industry offers highly mature solutions in key areas on NATO’s agenda, including armed unmanned aerial vehicles, deep strike, space technologies, air defense and countering drone threats.
“In fact, NATO forces are already successfully using our products in the field,” he said.
He pointed to Türkiye’s modern jet trainer Hürjet aircraft cooperation with Spain, electronic warfare and border security infrastructure partnership in Poland, and efforts to strengthen the land and naval inventories of Romania, Hungary and Estonia.
Görgün also cited work to enhance the trans-Atlantic resilience of the Bayraktar TB2 fleet deployed in Poland.
“The same UAVs gave Ukrainians psychological superiority on the battlefield” from the first days of the war in 2022, he said.
Türkiye has also provided continuous support through advanced air defense systems, munitions and armored vehicles, he added.
Görgün said Ankara wants to bring these capabilities to new initiatives under the NATO umbrella.
“We view such collaborations from a strategic perspective,” he said.
Türkiye and Canada have formally launched negotiations for a free trade agreement (FTA), Canadian Prime Minister Mark Carney’s office said Tuesday.
“The technical teams from both countries will undertake the necessary work to define the scope and ambition of the agreement and prepare for the first round of negotiations,” the office said in a statement.
The move follows an agreement last month by Canadian and Turkish trade ministers to begin exploratory discussions aimed at concluding a free trade deal.
The statement came shortly after President Recep Tayyip Erdoğan received Carney for talks ahead of the NATO summit in the capital, Ankara.
Erdoğan and Carney discussed bilateral ties as well as regional and global developments, the Directorate of Communications said in a statement.
During the meeting, Erdoğan said Türkiye and Canada should intensify efforts to strengthen cooperation in the new era ahead, particularly in trade, security, the defense industry and energy, adding that making use of cooperation potential would benefit both countries.
The president also reiterated Ankara’s support for strengthening NATO’s European pillar but stressed that such efforts should not replace the “trans-Atlantic bond.”
Erdoğan also said that non-EU allies should be included in the European Union’s defense initiatives, said the statement.
This is the first visit by a Canadian premier to Türkiye in 11 years.
At the summit, Carney is expected to further strengthen Canada’s contributions to the defense alliance, forge new partnerships and build shared security, including for Ukraine.
Türkiye on Tuesday dismissed as “disinformation” Israel’s claim that a U.S. sale of F-35 fighter jets and components to Ankara would disrupt the regional balance of power.
Ahead of a NATO summit in Türkiye, the Foreign Ministry slammed the claim made Monday by Israeli Prime Minister Benjamin Netanyahu.
“The baseless allegations recently circulated by Israeli officials in a coordinated manner and with calculated timing are part of a disinformation campaign,” the ministry said.
“Netanyahu and his partners in crime deliberately distort any criticism directed at them and seek to divert attention through a systematic propaganda effort.”
Netanyahu had on Monday urged the United States not to sell the jets to NATO ally Türkiye, claiming it would “upset the power balance” in the region.
President Recep Tayyip Erdoğan was due to receive his U.S. counterpart, Donald Trump, ahead of the summit starting Tuesday evening.
Earlier on Tuesday, reports said Trump is expected to endorse the potential sale of F-35 jets to Türkiye and tell Erdoğan he’s prepared to restore Ankara’s access to the multinational program building the warplane.
Last month, Trump promised to make Erdoğan “very happy” when asked about Türkiye looking to secure F110 jet engines and regain access to the F-35 program.
The move would be the biggest gesture yet from Trump to Erdoğan, whom he regularly praises and sees as a close ally. The two countries have enjoyed warmer ties since Trump returned to office last year.
Analysts say Türkiye wants to secure the new engines for use in its flagship Kaan stealth fighter project, as Ankara seeks to join the exclusive club of nations producing fifth-generation combat aircraft, which notably includes the United States, China and Russia.
In 2019, the U.S. removed Türkiye from the F-35 program, where Ankara was also a production partner, following its purchase of the Russian S-400 air defense system.
Washington claimed the system would endanger the jets and is incompatible with NATO systems, while Ankara repeatedly said there is no conflict between the two and proposed a commission to study the issue.
Türkiye also said it fulfilled its obligations on the F-35s and that its suspension broke the rules. Ankara maintains that the jets would strengthen not only Türkiye but also NATO.
The Turkish Foreign Ministry said Israel’s pushback could not “conceal the Netanyahu government’s genocide in Gaza, its policies of occupation and annexation, and its destabilizing actions in the region.”
The ministry added Türkiye wanted to see peace, stability and prosperity come to the whole region and that “with this understanding, we once again call on Israel to pursue a constructive and peaceful policy.”
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