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Turkey Letter: 14 December 2015

Foreign Policy

  • Opening of new chapter raises Turkey’s EU hopes
  • Readout of Vice President Biden’s Call with Prime Minister Davutoglu of Turkey
  • Top Turkish officials in Baghdad to defuse tension over troop deployment
  • Turkish Military Convoy Leaves Iraq Base
  • Islamic State oil is going to Assad, some to Turkey, U.S. official says
  • Run-In With Turkish Fishing Boat Angers Russian Military
  • Hopes Rise Over Cyprus Settlement, and With Them New Concerns
  • Erdogan Signals Possible Warming of Ties With Israel

Economy and Energy

  • Turkey Records Brisk Third-Quarter Growth
  • In Turkey’s economic plan, investors see drive for votes, not discipline
  • Central Bank foresees 6.5 pct inflation in 2016
  • Turkish Economy Grows Most Since 2014 on Household Spending
  • To hike or not to hike: Turkey’s central bank faces crucial test
  • European bank EBRD finalizes stake in Borsa Istanbul

Domestic Politics

  • Turkish President’s ‘double-referenda’ idea causes uproar
  • Turkish police, protesters clash in southeast as new curfews declared
  • Turkey fines Twitter for failure to remove ‘terrorist propaganda’: Official
  • Turkey Expands Rights of Alevis, a Muslim Minority

Foreign Policy

Opening of new chapter raises Turkey’s EU hopes

Turkey has set to revive its efforts to join the European Union by beginning to discuss and negotiate on a new chapter on Dec. 14, as part of a major deal to help Europe solve its migration crisis.

Hurriyet Daily News, Opening of new chapter raises Turkey’s EU hopes, December 14, 2015


Readout of Vice President Biden’s Call with Prime Minister Davutoglu of Turkey

The Vice President spoke again today with Turkish Prime Minister Ahmet Davutoglu regarding Turkey’s troop deployments in northern Iraq. The Vice President welcomed reports of the withdrawal of Turkish troops out of Camp Bashiqa as an important step to de-escalate recent tensions.

White House, Readout of Vice President Biden’s Call with Prime Minister Davutoglu of Turkey, December 14, 2015


Top Turkish officials in Baghdad to defuse tension over troop deployment

Two of Turkey’s top officials traveled to Baghdad on Dec. 10 in a bid to defuse a diplomatic standoff with the Iraqi government over the deployment of Turkish troops in northern Iraq, Prime Minister Ahmet Davutoğlu announced during a meeting with visiting Iraqi Kurdish leader Masoud Barzani on Dec. 9. Writing on Twitter this week, Brett McGurk, the special U.S. envoy for the anti-ISIL coalition, said Washington did not support military deployments inside Iraq “absent the consent of the Iraqi government.”

Hurriyet Daily News, Top Turkish officials in Baghdad to defuse tension over troop deployment, December 10, 2015


Turkish Military Convoy Leaves Iraq Base

Turkey on Monday pulled a small military convoy out of a training base in northern Iraq that has become a new flash point as regional powers exert their influence, but refused to buckle to increasing pressure from Baghdad and Moscow to remove all its troops.

Wall Street Journal, Turkish Military Convoy Leaves Iraq Base, December 14, 2015


Islamic State oil is going to Assad, some to Turkey, U.S. official says

Islamic State militants have made more than $500 million trading oil with significant volumes sold to the government of Syrian President Bashar al-Assad and some finding its way to Turkey, a senior U.S. Treasury official said on Thursday.

Reuters, Islamic State oil is going to Assad, some to Turkey, U.S. official says, December 10, 2015


Run-In With Turkish Fishing Boat Angers Russian Military

Russia summoned a Turkish military attaché on Sunday to warn of what it called provocations by a Turkish fishing boat near a Russian warship in the Aegean Sea.

New York Times, Run-In With Turkish Fishing Boat Angers Russian Military, December 13, 2015


Hopes Rise Over Cyprus Settlement, and With Them New Concerns

A resolution of the frozen conflict over the island could have big consequences, including for EU-Turkish relations.

Wall Street Journal, Hopes Rise Over Cyprus Settlement, and With Them New Concerns, December 11, 2015


Erdogan Signals Possible Warming of Ties With Israel

Turkish President Recep Tayyip Erdogan has signaled a possible warming of relations with Israel, saying in comments published Monday that the entire region would benefit from the normalization of ties.

Associated Press, Erdogan Signals Possible Warming of Ties With Israel, December 14, 2015


Economy and Energy

Turkey Records Brisk Third-Quarter Growth

Turkey’s economy expanded briskly in the third quarter of this year, beating expectations and growing at its fastest pace in more than a year. The economy was driven by resilient domestic demand, despite political uncertainties and mounting terrorist attacks.

Wall Street Journal, Turkey Records Brisk Third-Quarter Growth, December 10, 2015


In Turkey’s economic plan, investors see drive for votes, not discipline

Turkey’s new economic program is short on reform and long on populist measures aimed at winning support for a new constitution, investors have decided, leading them to dump Turkish assets for a second straight day on December 11.

Reuters, In Turkey’s economic plan, investors see drive for votes, not discipline, December 11, 2015


Central Bank foresees 6.5 pct inflation in 2016

The Turkish Central Bank has forecast the country’s inflation to stand at 6.5 percent at the end of 2016, according to the bank’s governor, Erdem Başçı. Addressing a press conference for the presentation of the bank’s 2016 monetary and exchange rate policy in Ankara, Başçı said the bank would maintain its tight monetary policy, while ensuring foreign exchange liquidity.

Hurriyet Daily News, Central Bank foresees 6.5 pct inflation in 2016, December 9, 2015


Turkish Economy Grows Most Since 2014 on Household Spending

Turkey’s economy expanded at its fastest pace since early 2014 in the third quarter, as household demand and public consumption shook off the political uncertainty of an election and a resurgence of violence with Kurdish militants.

Bloomberg, Turkish Economy Grows Most Since 2014 on Household Spending, December 10, 2015


To hike or not to hike: Turkey’s central bank faces crucial test

When Turkey’s central bank meets on Dec. 22 to set policy for the last time this year, something far more important than interest rates will be at stake: the bank’s own credibility. If the central bank follows through on previous hints and raises rates in tandem with the U.S. Federal Reserve, that would bolster investor confidence in both its independence and the new government’s economy czar, Mehmet Simsek.

Reuters, To hike or not to hike: Turkey’s central bank faces crucial test, December 8, 2015


European bank EBRD finalizes stake in Borsa Istanbul

The European Bank for Reconstruction and Development (EBRD) and Borsa Istanbul have finalized the bank’s purchase of a 10 percent stake in the Turkish stock exchange.The acquisition, which had been announced about six months ago, was signed by EBRD First Vice President Phil Bennett and Borsa Istanbul Chief Executive Officer Tuncay Dinç in the presence of Turkish Deputy Prime Minister Mehmet Şimşek at the bourse’s headquarters in Istanbul late Dec. 11.

Hurriyet Daily News, European bank EBRD finalizes stake in Borsa Istanbul, December 13, 2015


Domestic Politics

Turkish President’s ‘double-referenda’ idea causes uproar

President Recep Tayyip Erdoğan’s recent proposal for holding two referenda on the creation of a new constitution and a transition into a presidential system has drawn the ire of opposition parties of Turkey, while prompting Prime Minister Ahmet Davutoğlu to underline that any system change should not lead to a “hybrid system” in which responsibilities are muddled.

Hurriyet Daily News, Turkish President’s ‘double-referenda’ idea causes uproar, December 14, 2015


Clashes in southeast Turkey kill seven, new curfews declared

Seven people were killed in clashes with security forces in Turkey’s mainly Kurdish southeast, officials said on Monday, as authorities declared curfews across the restive region.

Reuters, Clashes in southeast Turkey kill seven, new curfews declared, December 14, 2015


Turkey fines Twitter for failure to remove ‘terrorist propaganda’: Official

Turkey’s communications technologies authority, the Information and Communication Technologies Authority (BTK), has fined micro blogging site Twitter 150,000 lira ($51,000.) for not removing content it says is “terrorist propaganda”, a BTK official told Reuters on Dec. 11

Hurriyet Daily News, Turkey fines Twitter for failure to remove ‘terrorist propaganda’: Official, December 11, 2015


Turkey Expands Rights of Alevis, a Muslim Minority

Prime Minister Ahmet Davutoglu on Thursday announced a set of reforms that will grant greater rights to the country’s Alevi minority, including the legal recognition of their houses of worship.

New York Times, Turkey Expands Rights of Alevis, a Muslim Minority, December 10, 2015