Egypt tests Europe’s ability to influence events in its southern neighbourhood. In January 2011, the protestors in Tahrir Square brought down President Mubarak, despite lukewarm support from Western countries. After Mubarak’s removal from power, the EU adopted a new policy based on the ‘more for more’ principle; the more a country enacts democratic reforms, the more EU aid it can expect. In November 2012, after the elections that led to Mohamed Morsi’s brief presidency, the European Union announced a package of grants and loans totalling nearly €4.2 billion. The following week President Morsi announced his autocratic grab for Egypt’s constitutional powers. When European officials complained about the violation of religious or women’s rights in Egypt, Muslim Brotherhood officials would retort by pointing at rising Islamophobia in Europe. Now, in spite of intense American and European diplomatic pressure, the interim government has used disproportionate force to disperse the pro-Morsi sit-ins, killing more than 800. A cycle of violence has ensued as dozens of policemen and security officers have been killed in response. Egypt now balances on the precipice of further violent conflict.

Europe’s diplomatic relations with Morsi’s government were troubled, but things are no easier now. The liberals and the moderates in the current government  ‒ those that the EU and Washington considered allies  ‒  have either been co-opted or outflanked by the hardliners. Prime minister Hazem el-Beblawi, a liberal economist, supported the crackdown against the sit-ins and has suggested the Muslim Brotherhood’s licence to operate as a political party could be revoked. Another moderate and key interlocutor of the West, Mohamed ElBaradei, is no longer influential after he resigned in protest at the violence and even faces legal charges over that decision. Meanwhile, Tamarod, a grass roots protest movement which appeared to share Western values, is becoming more nationalist and has called for tearing up Egypt’s peace treaty with Israel and an end to American military aid.

Following last week’s violence, the EU has decided to stop the sale of all ‘arms that can be used internally’. In practice the EU measure is likely to halt the export of small arms, munitions and possibly armoured personnel carriers. The army and police are too powerful for the EU’s decision to influence the internal balance of power. And if the Egyptian military run out of guns and bullets, there are many more suppliers able to replenish its stocks. Given the proliferation of arms from places like Libya, the same also holds true for the Islamists. And so, the EU’s decision will do little to bring the parties back to the table. It seems calculated to make clear that Europe disapproves of the violence, but not of the new regime.

If it had wanted to make a stronger point, the EU could have suspended aid, withdrawn its ambassadors, made a common demarche on the Egyptian ministry of foreign affairs or slapped economic sanctions on the assets and movements of senior government or military officials. Of course, the EU could still do all these things, but it seems unwilling to antagonise the Egyptian government. Egypt is too important for several European interests; a secure Suez Canal, enduring Arab peace with Israel and the fight against militant Islam.

Behind closed doors US and European security and intelligence communities will have welcomed Morsi’s replacement by General Abdel Fattah al-Sisi. Morsi’s government looked the other way while lawlessness flourished in the Sinai peninsula. Militants have bombed the natural gas pipeline to Israel and Jordan thirteen times in the past two years. The peninsula has become a conduit for Libyan arms to Hamas and Syria’s rebel groups (intelligence agencies have been particularly concerned about the spread of shoulder-fired missiles that can shoot down helicopters and planes). In the Sinai, there are nearly daily attacks against the police and army (in mid-August 24 police officers were killed in an ambush). Despite their restrictions on arms exports, most European governments probably hope that Egyptian security forces have enough weapons to reimpose order in Sinai.

But the overthrow of Morsi is unlikely to bring peace. Al Qaeda’s chief, Ayman al-Zawahiri, has called on his followers to resist the interim government in Cairo. The Egyptian economy is on life support. Sectarian attacks on Coptic Christians and their churches have increased. The Suez Canal – a maritime chokepoint that carries roughly 8 per cent of global seaborne trade  ‒  is at risk. This puts Europe in the uncomfortable position of giving preference to its security interests over its liberal values, without being sure that it can protect either.

The larger story of Europe’s pursuit of influence in Egypt relates to the changing balance of power in its southern neighbourhood. With America unwilling to get involved, European countries have tried, with mixed success, to take the lead on issues in Libya, Mali and Syria. In Egypt the EU now finds itself competing with the Gulf countries for influence. Saudi Arabia, Kuwait and the UAE – primarily concerned with domestic support for the Muslim Brotherhood – have welcomed the assault on the Brotherhood and have given the interim government a cheque worth $12 billion, almost €9 billion.  Reasoning that Cairo, if it wanted, could simply ignore Europe and rely on the Gulf states, the EU has decided to keep its aid and trade relationship intact. It is betting that by denouncing the violence, stopping arms sales but maintaining other ties, Brussels will be able to keep doors in Cairo open.

One positive for the EU in the Egyptian crisis is that member-states are allowing Catherine Ashton to coordinate EU policy. She was the first European leader to visit Egypt after the fall of Mubarak, and the only senior foreign official to have visited Morsi after his detention. This gives her credibility in Europe and in the region. European governments should mandate Ashton, and the EU’s Special Representative for the region, Bernardino Leon, to coordinate efforts with the Gulf states and the US and reach out to the interim government to help establish a national political dialogue.

Europe’s influence also relies on the power of its markets. Europe’s aid package is less than half of the Gulf states’ financial commitment, but Egypt needs foreign investment and deeper trade relations, rather than a line of credit. Once stability has been restored, the EU should be prepared to help the country deal with its vicious cycle of unemployment, inflation, capital flight, rising debts, falling currency reserves and increasing budget deficit (running at roughly 12 per cent of GDP) by further opening its markets to Egyptian goods. In time, the Egyptian government will have to reduce its subsidies on fuel and bread – actions that could spark popular unrest. The EU has also made macro-financial assistance to Egypt – worth €500 million – conditional on the successful negotiation of an IMF loan. European leaders should continue to push the interim government to strike a deal even though the political environment is not ready for this yet.

While the Brotherhood is suppressed, the military is the most organised political institution in the country. Under current conditions, a rush to the ballot box would almost certainly mean victory for the military’s candidate, perhaps al-Sisi himself, and enrage the Brotherhood’s supporters. At a conference in Cairo in March, one of the speakers, since elevated to a very senior position in government, said that if Morsi’s government failed, it would mean the bankruptcy of political Islam in Egypt. His words now read like a policy prescription. The interim government has detained 75 senior members of the Muslim Brotherhood, including Morsi himself. Under the existing electoral law, given their criminal indictments, many of the Brotherhood’s leadership would not be eligible to participate in the elections. By purging the Brotherhood, General al-Sisi hopes to stop his opponents from playing a meaningful role in Egypt’s politics.

The EU has an interest in a pluralist democracy, not in military rule sanctioned through quick elections. However difficult it may be, to give the opposition parties a fair chance it would be sensible to gather all parties (including the Brotherhood) in a process that lets them determine the timing of the elections. The recently created European Endowment for Democracy could also use its admittedly limited funds to support some of Egypt’s nascent political parties.

If the military insist on pushing the Brotherhood underground, however, this is likely to create security problems of its own. As avenues for democratic participation are closed to the Brotherhood, the likelihood increases that its supporters will resort to violence (as happened in Algeria in 1991 when the military intervened to deprive Islamists of their election victory, sparking civil war). The Brotherhood’s hardliners will gain influence, condemning the US and Europe as anti-Islamic and hypocritical for condoning the overthrow of a democratically elected government. The Brotherhood could also reverse its earlier renunciation of violence. Political Islam in Egypt would become more anti-Western and less amenable to democratic ideas, opening the way for a rise in violent extremism, including against Western interests, in a region that is rife with conflict. Tragically, Europe’s access to Cairo’s powerbrokers would then become even more important, even as its policy choices become more unpalatable.

Rem Korteweg is a senior research fellow at the Centre for European Reform.

The protests that started in Istanbul’s Gezi Park two weeks ago have spread across Turkey and show little sign of dying down. They signify a clash between a modernising Turkish society and a still rigid and old-fashioned political system. The protests have resulted in the tragic loss of several lives and are endangering Turkey’s hard-won economic stability as investors take fright. But they also have a silver lining. They might force the government to reconsider its rejection of pluralism. And they might even help to revive Turkey's moribund accession process to the EU.

Turkey's government has spent millions of euros over the last decade on European advertising campaigns to update its image and lessen public opposition to its EU membership bid. The Gezi Park protestors have had a more profound impact on Turkey’s international image in just a few weeks. European news bulletins and social media have been showing a new generation of Turks who, in articulate English, explain how much they value democracy, personal freedoms and tolerance between people with different lifestyles. The colourful banners of Taksim Square have replaced the stock images of mosques, Anatolian peasants or monumental Bosphorus bridges. The huge change that has taken place in Turkish society over the past two decades is suddenly evident to European voters, many of whom previously equated Turkey with Islamism, Kurdish terrorists and mass migration. The images from Gezi Park resonate particularly with younger Europeans who see it as Turkey’s version of the Occupy movements, the Spanish ‘Indignados’ and German ‘Wutbürger’. It is these younger Europeans who will vote on Turkish EU accession if and when the accession negotiations are finished.

The Twitter effect is a new element in the Turkey-EU relationship. The laughable failure of Turkey’s mainstream press to cover the protests accurately has driven people to rely on Twitter and Facebook as their main source of news. Twitter could not have asked for a better marketing campaign than Erdogan’s ranting against “lies on social media”. Turkey is also a trending topic in social media conversations within the EU: here, comments are at the same time becoming more in favour of Turkish accession (because of its people) and more sceptical of it (because of its government).

The EU’s dilemma is how to encourage Turkish society without rewarding the government. The conditionality of the accession talks is a blunt weapon. Germany or another member-state might be tempted to block the opening of the next chapter in the negotiations (on regional policy) to express disdain about government’s brutal reaction to the protests. But such sanctions would only feed the paranoia that Erdogan’s party is spreading about alleged international plots against Turkey. They would reduce the EU’s leverage still further.

Instead, the EU should hug Turkey closer at this great moment in Turkey’s democratic journey. The EU is right to criticise police violence and repression of the media in unequivocal terms – and it should also engage in an intense dialogue with the Turkish government about how to increase pluralism and personal freedoms. There are chapters in the negotiations that could help to guide Turkey through this major transition – such as Chapters 23 and 24 on fundamental rights, justice and home affairs – which Cyprus and other EU countries should unblock.

In a way, the Gezi Park protests are a victory of the accession process so far. Erdogan rose to power by reassuring Turkey’s more liberal, secular classes that he was serious about EU accession and the democratic and economic opening this entailed. Especially during his early years in power, Erdogan significantly strengthened the freedoms of assembly, association and expression. Today’s protests are the result of this enormous opening of the Turkish political space.

Walking around Taksim Square before it was cleared by the police, I saw the vast variety of political opinions and causes represented there: pictures of imprisoned Kurdish leader Abdullah Öcalan were held up next to a banner for the Muslim Anti-Capitalist League; environmentalists sat in their tents alongside self-declared Communists; youngsters played music while headscarved mothers pushed prams round the park. The atmosphere was festive and friendly, a remarkable display of tolerance and mutual respect. Most of the protesters eschewed violence even in the face of police brutality. The dozens of causes gathered there have conflicting ideologies and visions for Turkey. What unites them is a desire for more pluralism and space for dissent. The fact that these small, diverse organisations immediately sprouted when a breath of oxygen came into the public space is testament to the vibrancy of Turkish civil society.

The problem is that Erdogan’s old-fashioned leadership is more and more at odds with this more pluralist and modern society. The battles between police and protestors are part of a much bigger battle between ‘leader knows best’ politics and modern social participation. Many, if not most, Turks still favour strong leadership and the education system promotes a reverence for Mustafa Kemal Atatürk as the father of the nation.

But Erdogan’s reaction to the protests has made the paternalistic style look like Victorian parenting techniques in a modern family. Erdogan initially refused to enter a dialogue with the rebellious children until they stopped disobeying him. Turkey’s citizens, however, are no longer content to be infantilised. They do not want the prime minister to tell them to drink yoghurt, bear three children and stop drinking alcohol after 10 pm. Erdogan’s ministers, who blamed banks, speculators, a global conspiracy – anyone but themselves – for the protests only showed how out of touch they are with important parts of their own society. Erdogan would have done better to copy Spain’s Mariano Rajoy in his dialogue with the Indignados than Vladimir Putin lambasting Pussy Riot.

Erdogan’s AKP is not alone in having missed or misinterpreted Turkey’s social opening. The other big parties that have dominated Turkish politics for decades fared no better. The secularist centre-left CHP party – which Erdogan has accused of organising the protests – was nowhere to be seen in Gezi Park. Therefore, Gezi Park is also an expression of frustration about the AKP’s (or more precisely Erdogan’s) dominance of Turkish politics, not only over the last 15 years but also for the foreseeable future. It is an outcry of the many social groups who feel disenfranchised by the AKP’s ‘tyranny of the majority’.

The underlying problem is that the AKP fears pluralism. It equates criticism of the government with treachery to the Turkish state that needs to be punished. There is a chance that these protests will help Turkey to start accepting its diversity. If the protests keep spreading, Erdogan and his party will be forced to accept that the expression of opinions and beliefs that they dislike is part of any modern democracy. Europeans should help this process along, not reject Turkey at this critical moment.

Heather Grabbe is director of the Open Society European Policy Institute in Brussels. She was senior advisor to Olli Rehn when he was Commissioner for enlargement. She previously wrote on EU-Turkey relations while deputy director of the Centre for European Reform.