As Erdoğan's anti-European -or rather, anti-Everyone else- rhetoric gets stronger, he's showing a complete nonchalance towards possible consequences for his actions that have been pointed to him by European leaders. Erdoğan's tavern talk might please the Turkish conservative crowd who's had an "Us Against Them" mindset ingrained in them after years of Ottoman rule and positioned Europe as the enemy, but their implications might be in for a rude awakening.
The political climate in Turkey has been toxic under Erdoğan's authoritarian tendencies and it without a doubt affects Turkey's place as an intriguing market for investments. Turkey's foreign direct investment has plunged more than 50% compared to last year and its credit ratings are dropping on just about every index. While the U.S. Dollar gains value against currencies all over the world, it gains more on the Turkish Lira than just about any other relevant currency. Only the Mexican peso, which is losing value in light of Trump's election; the Brazilian real, which is losing value due to mass corruption scandals and political gloom; and the South African rand, which is losing value due to controversies surrounding Jacob Zuma and the attempted impeachment against him, are bigger losers than the Turkish Lira. USD/TRY parity jumped from 2.8 to 3.5 in the last five months and the tide isn't expected to turn any time soon, as tensions between the EU and Turkey continue to rise. European Parliament voted to suspend talks with Turkey on EU membership on November 24th, and the first embargo towards Turkey came from Austria, whose parliament voted to impose an arms embargo the day after the European Parliament vote. The two actions received a response from Erdoğan that can be described as shrugging his shoulders violently. It would be one thing if he simply left it at shrugging his shoulders -and EU membership negotiations really do more harm than good to his country- But he moved onto threatening European countries by opening the borders and letting the refugees move to European soil, using the EU incentive to use Turkey as a buffer zone for migrants as a blackmail. It's a tough pill to swallow for Europe, but such aggressive behaviour is risking the possibility of serious sanctions and Turkish economy might be too fragile to withstand such a battle.
It's patently obvious that Erdoğan has a fair bit of confidence in himself and his country's economy. However, history shows that Erdoğan's power trips tend to cause quite a bit of harm to Turkish economy. The months following Turkey's shooting down of a Russian fighter jet in Syria oversaw Erdoğan being very adamant in his stance towards Russia; however after the sharp decline in tourism -due to Russians being the leading visitors of Turkish tourist destinations- and exports acted as a slap to the face on the Turkish economy, Erdoğan soon had to back off and apologize to Putin. Turkish economy won't see a turning point towards positivity as long as Erdoğan continues to ignore worldwide public and political opinion and adamantly defends fanatical positions. And a buck of trend doesn't seem very near.
Erdoğan may trust the fanatical devotion of his voter base to get him through anything, and granted, he has survived quite a bit of scandals and flip-flops, but Turkish political history shows that if there's one thing that will make the Turkish conservative voter jump ship, it's an economic crisis. Nobody will care about a "religious revolution" when their businesses are getting shut down. And Erdoğan should be well aware of this, considering the fact that he first came into power in 2002 following a period of inflation in the 90s during a coalition led by conservative parties that culminated in an economic crisis in 2001 by promoting a pro-Western, pro-privatization agenda.