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Turkey Letter: 23 May 2016

Foreign Policy

  • Merkel on Mission to Rescue Turkey Deal as Erdogan Tightens Grip
  • EU Looks to Tighten Rules Before the Visa Debate on Turkey
  • EU Ministers Press Greece to Accelerate Asylum Process, Send More Syrians Back to Turkey
  • Top US commander for the Middle East visits Turkey after Kobane
  • World Humanitarians Gather in Turkey to Take on Crises
  • David Cameron, Pro-Brexit Campaigners Spar Over Turkey
  • Reza Zarrab, Charged With Violating Sanctions on Iran, Seeks Bail Deal

Economy & Energy

  • Turkey’s Political Upheaval Unnerves Investors
  • How Turkey Can Lower Borrowing Costs Without Cutting Rates
  • Bond-Market Whisperer Seen Silenced in Turkey Cabinet Shake-Up
  • Turkish consumer confidence up slightly in May

Domestic Politics

  • Party in Turkey Elects Binali Yildirim, Erdogan Ally, as Prime Minister
  • Turkish Parliament Approves Stripping Lawmakers of Their Immunity
  • Erdoğan believes new gov’t will prioritize system change
  • MHP rejects reports of congress decision referral to Constitutional Court

Foreign Policy

Merkel on Mission to Rescue Turkey Deal as Erdogan Tightens Grip

German Chancellor Angela Merkel made yet another trip to Turkey as she strives to shore up a fragile refugee accord in the face of increasingly rancorous relations with President Recep Tayyip Erdogan.

Bloomberg, Merkel on Mission to Rescue Turkey Deal as Erdogan Tightens Grip, May 22, 2016


EU Looks to Tighten Rules Before the Visa Debate on Turkey

While the European Union is considering granting visa-free travel to Turkey and other countries outside the bloc, it is also trying to tighten the rules should that happen.

Wall Street Journal, EU Looks to Tighten Rules Before the Visa Debate on Turkey, May 20, 2016


EU Ministers Press Greece to Accelerate Asylum Process, Send More Syrians Back to Turkey

European interior ministers on Friday pressured Greece to speed up asylum procedures and send more Syrians back to Turkey.

Wall Street Journal, EU Ministers Press Greece to Accelerate Asylum Process, Send More Syrians Back to Turkey, May 20, 2016


Top US commander for the Middle East visits Turkey after Kobane

A top U.S. commander who secretly visited northern Syria on May 21 in order to witness efforts to build up local forces in the fight against the Islamic State of Iraq and the Levant (ISIL) has arrived in Turkey in a surprise visit, daily Hürriyet reported on its website.

Hurriyet Daily News, Top US commander for the Middle East visits Turkey after Kobane, May 23, 2016


World Humanitarians Gather in Turkey to Take on Crises

Leaders from around the world gathered in Istanbul, Turkey, on Monday for a long-awaited humanitarian summit with hopes of instituting concrete protocols for dealing with future refugee crises.

Voice of America, World Humanitarians Gather in Turkey to Take on Crises, May 23, 2016


David Cameron, Pro-Brexit Campaigners Spar Over Turkey

The debate over Turkey’s place in Europe on Sunday became the latest battle line to be drawn between British Prime Minister David Cameron and campaigners pushing for the U.K. to leave the European Union.

Wall Street Journal, David Cameron, Pro-Brexit Campaigners Spar Over Turkey, May 22, 2016


Reza Zarrab, Charged With Violating Sanctions on Iran, Seeks Bail Deal

The lawyer for Reza Zarrab, a gold trader based in Turkey who is jailed in Manhattan on charges of conspiring to violate United States sanctions on Iran, proposed on Wednesday that his client be released on $50 million bond with strict conditions to ensure that he would be present for trial.

New York Times, Reza Zarrab, Charged With Violating Sanctions on Iran, Seeks Bail Deal, May 18, 2016


Economy & Energy

Turkey’s Political Upheaval Unnerves Investors

Turkey’s political upheaval is stoking investor concern over the country’s economic stewardship, rattling markets Friday a day after President Recep Tayyip Erdogan’s long-standing ally was tapped to become the country’s next prime minister.

Wall Street Journal, Turkey’s Political Upheaval Unnerves Investors, May 20, 2016


How Turkey Can Lower Borrowing Costs Without Cutting Rates

Caught between a president demanding lower interest rates and investors eager for currency stability, Turkey’s central bank may try to please both as it seeks to reduce borrowing costs.

Bloomberg, How Turkey Can Lower Borrowing Costs Without Cutting Rates, May 20, 2016


Bond-Market Whisperer Seen Silenced in Turkey Cabinet Shake-Up

Four elections, multiple terror attacks, a new central bank governor and the ousting of a prime minister: Turkey and its investors have been through a lot together in the past two years. Despite the chaos, they found reassurance in Deputy Prime Minister Ali Babacan and his successor Mehmet Simsek, who ran economic policy with a pragmatism that defied the political convulsions around them. That may come to an end if Simsek doesn’t survive a cabinet reshuffle after the party that President Recep Tayyip Erdogan co-founded votes in a new prime minister on Sunday.

Bloomberg, Bond-Market Whisperer Seen Silenced in Turkey Cabinet Shake-Up, May 18, 2016


Turkish consumer confidence up slightly in May

Turkey’s consumer confidence index rose to 68.75 in May from 68.46 in April, increasing for the third straight month, data from the Turkish Statistics Institute (TÜİK) showed on May 23.

Hurriyet Daily News, Turkish consumer confidence up slightly in May, May 23, 2016


Domestic Politics

Party in Turkey Elects Binali Yildirim, Erdogan Ally, as Prime Minister

Turkey’s governing Justice and Development Party unanimously elected a longtime ally of President Recep Tayyip Erdogan to become its new leader and prime minister on Sunday, paving the way for a constitutional overhaul that would allow the president to extend his powers.

New York Times, Party in Turkey Elects Binali Yildirim, Erdogan Ally, as Prime Minister, May 23, 2016


Turkish Parliament Approves Stripping Lawmakers of Their Immunity

Lawmakers from President Recep Tayyip Erdogan’s governing party pushed through an amendment to the Turkish Constitution on Friday that would strip members of Parliament of their immunity from prosecution, a move that is likely to lead to the ouster of Kurdish deputies.

New York Times, Turkish Parliament Approves Stripping Lawmakers of Their Immunity, May 20, 2016


Erdoğan believes new gov’t will prioritize system change

President Recep Tayyip Erdoğan has expressed his belief that the new government to be formed under confidant Binali Yıldırım will prioritize a systemic change to impose a presidential system on the country.

Hurriyet Daily News, Erdoğan believes new gov’t will prioritize system change, May 22, 2016


MHP rejects reports of congress decision referral to Constitutional Court

The Nationalist Movement Party (MHP) has denied claims that Turkey’s Supreme Court of Appeals has handed the file on the party’s extraordinary congress to the Constitutional Court.

Hurriyet Daily News, MHP rejects reports of congress decision referral to Constitutional Court, May 20, 2016