Concerns are being raised in Israel that Turkey's political and financial crisis is threatening defence and aerospace deals with Tel Aviv and elsewhere.

A row between president Ahmet Necdet Sezer and prime minister Bulent Ecevit, centering on corruption issues, has caused the stock market to plunge 20%, currency to fall and raised fears that the International Monetary Fund will withhold a $7.7 billion loan.

Israeli companies are concerned the crisis could hinder a series of deals between Tel Aviv and Ankara. Turkey has acquired significant quantities of defence equipment from Israel, including munitions and aircraft upgrades. Israeli companies see further sales including an intelligence satellite, electronic warfare systems and the Arrow anti-tactical ballistic missile.

Israeli sources say that if Turkey quickly contains the crisis, then the effect may be minor, but a long period of instability will likely lead to the shelving of programmes. Several other programmes could also be at risk if the financial crisis develops from the USA including attack helicopter and airborne early warning aircraft purchases.

Source: Flight International