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Turkey Letter: 1 August 2016

 

Foreign Policy

  • U.S. general seeks to soothe Turkey ties strained by coup purge
  • Turkey increases pressure on U.S. for Gulen’s extradition
  • Putin, Erdogan Mend Ties as Post-Coup Turkey Turns to Russia
  • Turkey and Germany Face New Diplomatic Spat
  • German Chancellor Angela Merkel Urges Restraint Pursuing Turkey’s Coup Plotters
  • EU Pushes Back on Turkish Threat to Scrap Refugee Agreement
  • Turkey Restores Access to Key Airbase After Brief Ban, IHA Says

Economy & Energy

  • Turkey’s investment grade hangs in balance as post-coup purges deepen
  • Central Bank Maintains Turkey Inflation Outlook on Food, Oil
  • Turkey Extends Crackdown on Dissent to Analysis by Brokers
  • Erdogan’s Putsch Purge Spreads Into Media, Energy, Finance
  • Russia Says No Extra Risk in Turkey Unrest to Gas Pipe Talks
  • Turkey-Risk Model Shows Nation’s Markets Going From Bad to Worse
  • Akfen Said to Weigh Turkish Asset Sales in Post-Coup Test
  • Abraaj Unswayed by Turkey Turmoil Plans as Many as Five Deals
  • Turkish tourist arrivals plummet 40 percent in June, biggest drop in 22 years
  • Bond Slump Sends Turkey’s Yields Up Most Among Peers in July
  • Turkey Joins Global Tax Crackdown With ‘Last Exit’ Amnesty

Domestic Politics

  • Turkey culls nearly 1,400 from army, overhauls top military council
  • Erdogan says to close military schools, rein in armed forces
  • With Army in Disarray, a Pillar of Modern Turkey Lies Broken
  • Turkey’s Powerful Spy Network Failed to See Coup Coming
  • In quest to punish coup plotters, Turkey squeezes out room for dissent
  • Turkish authorities to shut down dozens of media outlets
  • President Erdoğan withdrawing lawsuits filed for insults
  • Gov’t, opposition to begin work on small-scale charter changes

Foreign Policy

U.S. general seeks to soothe Turkey ties strained by coup purge

America’s highest-ranking military officer sought on Monday to soothe strained ties with NATO ally Turkey, which was angered by the West’s response to a failed military coup and by an apparent U.S. reluctance to hand over the cleric it says was responsible.

Reuters, U.S. general seeks to soothe Turkey ties strained by coup purge, August 1, 2016


Turkey increases pressure on U.S. for Gulen’s extradition

Turkish leaders on Tuesday stepped up their calls for the United States to punish Fethullah Gulen, the reclusive cleric living in Pennsylvania whose organization is said to be behind the failed July 15 coup attempt that sought to topple President Recep Tayyip Erdogan and his government.

Washington Post, Turkey increases pressure on U.S. for Gulen’s extradition, July 26, 2016


Putin, Erdogan Mend Ties as Post-Coup Turkey Turns to Russia

Turkey and Russia will seek to speed up the repair of frayed relations when Recep Tayyip Erdogan meets Vladimir Putin for talks in St. Petersburg next month in the wake of the failed military coup against the Turkish president.

Bloomberg, Putin, Erdogan Mend Ties as Post-Coup Turkey Turns to Russia, July 26, 2016


Turkey and Germany Face New Diplomatic Spat

Tensions between two key players in Europe’s migrant crisis deepened as Turkey summoned one of Germany’s top diplomats there after the handling of a large demonstration in Cologne angered Turkish officials.

Wall Street Journal, Turkey and Germany Face New Diplomatic Spat, August 1, 2016


German Chancellor Angela Merkel Urges Restraint Pursuing Turkey’s Coup Plotters

German Chancellor Angela Merkel on Thursday urged Turkey to show restraint in pursuing coup plotters, voicing concern about a widening crackdown in the country.

Wall Street Journal, German Chancellor Angela Merkel Urges Restraint Pursuing Turkey’s Coup Plotter, July 28, 2016


EU Pushes Back on Turkish Threat to Scrap Refugee Agreement

The European Union rejected Turkey’s warning that it may scrap a refugee accord unless the EU allows visa-free travel for Turkish citizens, saying the bloc’s conditions aren’t negotiable.

Bloomberg, EU Pushes Back on Turkish Threat to Scrap Refugee Agreement, 1 August 2016


Turkey Restores Access to Key Airbase After Brief Ban, IHA Says

Turkish authorities restored access to and from a key air base used in operations against Islamic State militants, local media reported on Sunday, one day before the U.S. top military official is scheduled to visit the country.

Bloomberg, Turkey Restores Access to Key Airbase After Brief Ban, IHA Says, July 31, 2016


Economy & Energy

Turkey’s investment grade hangs in balance as post-coup purges deepen

A crackdown in Turkey after a failed coup could further weaken its institutions and threaten its investment grade status, investors fear, as dismissals and detentions stretch from the judiciary into the private sector and even the central bank.

Reuters, Turkey’s investment grade hangs in balance as post-coup purges deepen, July 28, 2016


Central Bank Maintains Turkey Inflation Outlook on Food, Oil

Turkish central bank Governor Murat Cetinkaya kept his estimates for year-end inflation unchanged from April and said lower-than-predicted food prices will offset the impact of rising energy costs.

Bloomberg, Central Bank Maintains Turkey Inflation Outlook on Food, Oil, July 26, 2016


Turkey Extends Crackdown on Dissent to Analysis by Brokers

Turkey is widening its crackdown on dissent to include comments on the damage caused by the failed coup of July 15. The head of research at one of Turkey’s largest brokerages was stripped of his license over a report analyzing the impact of the putsch. The Capital Markets Board said Mert Ulker failed to “fulfill his responsibilities” in publishing his analysis for Ak Investment, the brokerage arm of Turkey’s second-largest bank. He also faces criminal charges, including under articles of the penal code against insulting the president, the nation or its institutions.

Bloomberg, Turkey Extends Crackdown on Dissent to Analysis by Brokers, July 27, 2016


Erdogan’s Putsch Purge Spreads Into Media, Energy, Finance

Turkey’s post-putsch purge of dissent reached deeper into the economy as authorities shuttered scores of media outlets, detained the head of a major company and banned the chief strategist of a leading brokerage.

Bloomberg, Erdogan’s Putsch Purge Spreads Into Media, Energy, Finance, July 28, 2016


Russia Says No Extra Risk in Turkey Unrest to Gas Pipe Talks

Russia and Turkey have resumed talks on a possible natural gas link through the Black Sea even as analysts see risks for the slated route to southern Europe amid political turmoil in Turkey.

Bloomberg, Russia Says No Extra Risk in Turkey Unrest to Gas Pipe Talks, July 26, 2016


Turkey-Risk Model Shows Nation’s Markets Going From Bad to Worse

Turkey’s failed coup and President Recep Tayyip Erdogan’s crackdown could hardly have come at a worse time for investors worried about the riskiness of the country’s bonds. Now the picture may get even dicier.

Bloomberg, Turkey-Risk Model Shows Nation’s Markets Going From Bad to Worse, July 27, 2016


Akfen Said to Weigh Turkish Asset Sales in Post-Coup Test

Turkey’s Akfen Holding AS is exploring a potential sale of its stakes in the country’s main airport operator and a major port, in what could be a test of investor appetite for infrastructure after a failed coup attempt shook the markets, people familiar with the matter said.

Bloomberg, Akfen Said to Weigh Turkish Asset Sales in Post-Coup Test, July 28, 2016


Abraaj Unswayed by Turkey Turmoil Plans as Many as Five Deals

Abraaj Group Ltd., one of the largest private-equity investors in developing markets, plans to make as many as five purchases in Turkey over the next two years as it prepares for the country’s rebound from a failed coup.

Bloomberg, Abraaj Unswayed by Turkey Turmoil Plans as Many as Five Deals, July 27, 2016


Turkish tourist arrivals plummet 40 percent in June, biggest drop in 22 years

The number of foreign visitors to Turkey plummeted more than 40 percent in June, official data showed on July 28, marking the biggest drop in at least 22 years, as tensions with Russia and a series of deadly bombings kept tourists away.

Hurriyet Daily News, Turkish tourist arrivals plummet 40 percent in June, biggest drop in 22 years, July 28, 2016


Bond Slump Sends Turkey’s Yields Up Most Among Peers in July

Declines in Turkey’s bonds in July drove yields to the biggest increase in emerging markets after a failed coup sparked a government crackdown and a credit downgrade by S&P Global Ratings sent the lira to a record-low.

Bloomberg, Bond Slump Sends Turkey’s Yields Up Most Among Peers in July, July 29, 2016


Turkey Joins Global Tax Crackdown With ‘Last Exit’ Amnesty

A proposed amnesty will provide Turks with a final tax-free opportunity to repatriate money held overseas ahead of the culmination of a G-20 effort to shut global loopholes, according to Finance Minister Naci Agbal.

Bloomberg, Turkey Joins Global Tax Crackdown With ‘Last Exit’ Amnesty, July 29, 2016


Domestic Politics

Turkey culls nearly 1,400 from army, overhauls top military council

Turkey dismissed nearly 1,400 more members of its armed forces and stacked the top military council with government ministers on Sunday, moves designed by President Tayyip Erdogan to put him in full control of the military after a failed coup.

Reuters, Turkey culls nearly 1,400 from army, overhauls top military council, July 31, 2016


Erdogan says to close military schools, rein in armed forces

Turkey will shut down its military academies and put the armed forces under the command of the defense minister, President Tayyip Erdogan said on Saturday in a move designed to bring the military under tighter government control after a failed coup.

Reuters, Erdogan says to close military schools, rein in armed forces, July 30, 2016


With Army in Disarray, a Pillar of Modern Turkey Lies Broken

As a rebel faction of Turkey’s military began a violent attempt to topple the elected government, the country’s top officer, Gen. Hulusi Akar, was held at gunpoint in his office in the capital and told for the first time about what was happening.

New York Times, With Army in Disarray, a Pillar of Modern Turkey Lies Broken, July 28, 2016


Turkey’s Powerful Spy Network Failed to See Coup Coming

Juggling terror threats from Islamic State and Kurdish separatists, Turkey’s vast intelligence service struggled to make sense of clues before plotters sprung to action on July 15.

Wall Street Journal, Turkey’s Powerful Spy Network Failed to See Coup Coming, July 29, 2016


In quest to punish coup plotters, Turkey squeezes out room for dissent

The room for dissent in Turkey had already been under threat. But in the wake of the failed military coup, the space in which political opponents could criticize the government has all but disappeared.

Washington Post, In quest to punish coup plotters, Turkey squeezes out room for dissent, July 25, 2016


Turkish authorities to shut down dozens of media outlets

Turkey’s government has ordered the closure of dozens of media outlets — including news agencies, television channels, radio stations and newspapers — as part of its widespread crackdown in the wake of a failed coup attempt on July 15.

Washington Post, Turkish authorities to shut down dozens of media outlets, July 27, 2016


President Erdoğan withdrawing lawsuits filed for insults

Turkish President Recep Tayyip Erdoğan has said he is withdrawing all lawsuits against people charged with insulting him.

Hurriyet Daily News, President Erdoğan withdrawing lawsuits filed for insult, July 30, 2016


Gov’t, opposition to begin work on small-scale charter changes

Turkey’s ruling and opposition parties have agreed to begin work on a small-scale constitutional change by appointing each one a representative to decide the scope of the amendment, in a sign of continued political dialogue in the capital following the July 15 failed coup attempt.

Hurriyet Daily News, Gov’t, opposition to begin work on small-scale charter changes, August 1,2016