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UPDATE: Thanks to Turkey observer Jinjirrie, who’s been following this issue closely in the Turkish media. She reports that the following story is from the right-wing Hurriyet newspaper, which would be seeking to embarrass the ruling party. If you add to this that the Israeli source in the Globes story also seems to be both far-right and anti-Erdogan, the entire thing would seem to be a ‘flyer’ to embarrass the Erdogan government.

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One of Turkey’s main newspapers reports that that nation’s government has told the Obama administration that Israel’s refusal to apologize for the Mavi Marmara killings will have serious repercussions. It is contemplating completely severing economic ties with Israel, which is a sizable trading partner:

According to Hürriyet, among the reprisals being considered by Turkey if Israel does not apologize are the downgrading of diplomatic relations between the two countries to the level of second secretary, suspension of all economic and political ties, and an older threat: a visit by Erdoğan to the Gaza Strip. There is also no doubt that Turkey will be an enthusiastic supporter of the Palestinians’ initiative to win UN recognition of a Palestinian state.

Trade volume in 2010 was $3.5 billion. In 2011, Turkey increased its level of exports to Israel by 20%. Turkey is Israel’s second largest trade partner overall after the U.S.* 2008 was the highest year of Israeli tourism with 500,000 visitors. Turkey has been one of the most popular tourist destinations for Israelis though lately the numbers have declined significantly. Though a trade ban would hurt both countries, it would hurt Israel not just economically, but it would add resonance to the BDS movement world-wide.

The Israeli government refuses to reopen its decision and has developed the cold-heart of Pharaoh as far as the matter is concerned. This Globes report truly paints a picture of Israeli disdain for Turkey’s prime minister that borders of the childish and petulant. I’d guess that Danny Ayalon had to be the source for this as he seems to be one of the most infantile and petulant officials in the foreign ministry:

Prime Minister Benjamin Netanyahu’s decision not to issue an apology is final. Jerusalem believes that such an apology will not lead to an improvement in relations with Ankara, and will only strengthen the political standing of Turkish Prime Minister Recep Tayyip Erdoğan. Turkey and Israel have made attempts to meet each other halfway in the past few months, but the perception grew in Jerusalem that Erdoğan was constantly upping the ante. His behavior on the international stage, not just on the narrow question of Israel-Turkish relations, indicates that he suffers from megalomania, according to Israeli assessments. Because of this, decision makers in Jerusalem came to the conclusion that an Israeli apology would fail to damp down the flames of the dispute with Ankara, and would instead give Erdoğan more mileage without Israel deriving any benefit.

When the likes of Danny Ayalon and Avigdor Lieberman are accusing others of megalomania you witness Israeli foreign policy at its most pathetic. This isn’t Andorra or Costa Rica we’re talking about. You don’t just thumb your nose at one of the most powerful players in your region as they have.

CORRECTION and UPDATE: I wrote to Israeli economist Shir Hever before publishing this post to check facts and he replied after I’d published. He’s corrected an error above which came from a faulty Turkish source, and he adds some very interesting background portraying the potentials complications for Israel should Turkey force Israel to go “cold-turkey” trade-wise:

…The [claim] about Turkey being the second largest market for Israel is simply not true (according to the ICBS many countries such as the Netherlands, Germany, UK and even Hong Kong are bigger trading partners). However, Turkey is a very important customer of Israeli chemical fertilizers, a very important [Israeli] export. Turkey also exports cars to Israel (cars manufactured in Europe or East Asia, but it’s cheaper to import them through Turkey, and high car prices are a very big problem in Israel at the moment). Most importantly – Turkish air space is absolutely vital for the Israeli economy. If Turkey wouldn’t permit Israeli flights through its air space (something which it has already threatened to do), that would have a very significant impact on Israel’s trade ties with East Asia. Look at the map, and you’ll see that Israel can’t really send planes eastwards (Iran, Iraq, Saudi Arabia, form a serious block). Without access to Turkish airspace, Israeli trade will become extremely slow, expensive, and limited westwards.