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Turkey Letter: 29 February 2016

Foreign Policy

  • Keep PYD out of Syria truce deal: Erdoğan
  • Turkey says Syria ceasefire is not binding if it threatens security
  • Turkey raises anti-smuggling steps but faces uphill struggle
  • NATO Agrees on Plan to Deter Migrants Crossing Aegean
  • Turkey starts repairs on Iraqi Kurdish oil pipeline as violence flares
  • Turkish air force hits PKK targets in the southeast, Iraq; kill 12
  • Turkish government seeks to mend ties with Israel, Egypt

Economy and Energy

  • Top bosses ‘failing to understand’ Central Bank’s inflation policies
  • Lira Pares Monthly Drop as Fitch Maintains Turkey’s Credit Grade
  • Turkey Keeps Interest Rates Steady Despite Rising Inflation
  • IMF revises Turkey’s growth forecast for 2016, warns of ‘highly vulnerable’ world economy
  • Lowest Turkish Exports Since 2011 Hidden by Shrinking Trade Gap
  • Russia’s Gazprom cuts gas supplies to Turkey by 10 percent

Domestic Politics

  • Kurdish solidarity in Turkey’s restive southeast frustrates its Syria policy
  • Turkey Frees Two Journalists From Jail After High Court Ruling
  • Turkish presidential spokesman rules out early election
  • Turkey’s CHP leader resolved not to turn charter table into bargain over ‘regime’

Foreign Policy

Keep PYD out of Syria truce deal: Erdoğan

Syria’s Democratic Union Party (PYD) and the People’s Protection Units (YPG) should be excluded from a recently declared cessation of hostilities in Syria, just like the Islamic State of Iraq and the Levant (ISIL), Turkish President Recep Tayyip Erdoğan has said. An ongoing rift occurred between NATO allies Turkey and U.S. over the designation of the PYD and YPG. While Turkey consider them as terrorist organizations, the U.S. sees them an important partner in the fight against ISIL.

Hurriyet Daily News, Keep PYD out of Syria truce deal: Erdoğan, February 24, 2016


Turkey says Syria ceasefire is not binding if it threatens security

Prime Minister Ahmet Davutoglu said on Thursday that Turkey would not be bound by the Syrian ceasefire plan if its security was threatened, and would take “necessary measures” against the Syrian Kurdish YPG and Islamic State if needed.

Reuters, Turkey says Syria ceasefire is not binding if it threatens security, February 25, 2016


Turkey raises anti-smuggling steps but faces uphill struggle

Turkey all but turned a blind eye last year as more than 850,000 people, most of them Syrians, slipped into Greece from Turkey on smugglers’ boats. Now it’s promised the European Union that will change.

Washington Post, Turkey raises anti-smuggling steps but faces uphill struggle, February 28, 2016


NATO Agrees on Plan to Deter Migrants Crossing Aegean

The North Atlantic Treaty Organization reached an agreement on its mission to monitor and deter migrants trying to cross the Aegean Sea, it announced early Thursday morning. NATO ships, which have been conducting monitoring operations in the area, will begin providing surveillance information to Greek and Turkish coast guards.

Wall Street Journal, NATO Agrees on Plan to Deter Migrants Crossing Aegean, February 25, 2016


Turkey starts repairs on Iraqi Kurdish oil pipeline as violence flares

Turkey has begun work to repair a pipeline taking crude oil from northern Iraq to the Mediterranean through its restive southeast and aims to restore flows soon, the Turkish energy ministry said on Saturday.

Reuters, Turkey starts repairs on Iraqi Kurdish oil pipeline as violence flares, February 27, 2016


Turkish air force hits PKK targets in the southeast, Iraq; kill 12

Turkish military helicopters killed 12 Kurdish militants in strikes near the southeastern border with Syria on Wednesday, security sources said, in a conflict becoming increasingly intertwined with developments in Turkey’s war-torn neighbor.

Reuters, Turkish air force hits PKK targets in the southeast, Iraq; kill 12, February 24, 2016


Turkish government seeks to mend ties with Israel, Egypt

A nine-hour-long Turkish cabinet meeting chaired by President Recep Tayyip Erdoğan on Feb. 22 focused on foreign policy, with the future of Ankara’s bilateral relations Israel and Egypt as well as its position regarding the Syrian conflict reviewed in a bid to update its roadmap on these thorny issues.

Hurriyet Daily News, Turkish government seeks to mend ties with Israel, Egypt, February 29, 2016


Economy and Energy

Top bosses ‘failing to understand’ Central Bank’s inflation policies

The head of Turkey’s top business organization has said the continuing rising trend in the inflation rate was not good for the country, while business representatives were “failing to understand” the Central Bank’s policies in maintaining the price index. “We have been wondering whether an impossible-to-reach target has been set. Or is there any obstacle before the realization of the policies which are necessary to achieve the goal? I should sincerely say that we are failing to understand this,” said the president of the Industry and Business Association of Turkey (TÜSİAD), Cansen Başaran-Symes, at a joint meeting with the World Bank on Feb. 25.

Hurriyet Daily News, Top bosses ‘failing to understand’ Central Bank’s inflation policies, February 25, 2016


Lira Pares Monthly Drop as Fitch Maintains Turkey’s Credit Grade

Turkey’s lira strengthened the most in more than three months as some traders bet its 2.3 percent slide on Friday was overdone, given the decision by Fitch Ratings to maintain the nation’s investment-grade status.

Bloomberg, Lira Pares Monthly Drop as Fitch Maintains Turkey’s Credit Grade, February 29, 2016


Turkey Keeps Interest Rates Steady Despite Rising Inflation

Turkey’s central bank kept all interest rates steady Tuesday, sticking with a year-old monetary policy despite a rising inflation rate, as it seeks to overcome tepid economic growth and counter the fallout from global financial volatility.

Wall Street Journal, Turkey Keeps Interest Rates Steady Despite Rising Inflation, February 23, 2016


IMF revises Turkey’s growth forecast for 2016, warns of ‘highly vulnerable’ world economy

The International Monetary Fund (IMF) has upgraded its 2016 growth forecast for Turkey by 0.3 points in a report released on late Feb. 24, while the organization has pointed out a weakening global recovery, with the world economy “highly vulnerable” to adverse shocks.

Hurriyet Daily News, IMF revises Turkey’s growth forecast for 2016, warns of ‘highly vulnerable’ world economy, February 25, 2016


Lowest Turkish Exports Since 2011 Hidden by Shrinking Trade Gap

Turkey’s exports fell to a five-year low as shipments to neighboring countries that are beset by fighting and economic crisis plunged. Exports dropped to $9.6 billion in January, with sales to Russia and Iraq plummeting, Turkey’s state statistics institute in Ankara said on its website Monday. Turkey’s trade gap shrank to $3.76 billion from $4.34 billion during the same period, due to the lower cost of importing energy.

Bloomberg, Lowest Turkish Exports Since 2011 Hidden by Shrinking Trade Gap, February 29, 2016


Russia’s Gazprom cuts gas supplies to Turkey by 10 percent

Russian energy giant Gazprom (GAZP.MM) has reduced natural gas supplies to private sector companies in Turkey by 10 percent due to a price dispute, officials at Turkey’s energy ministry told Reuters on Thursday.

Reuters, Russia’s Gazprom cuts gas supplies to Turkey by 10 percent, February 25, 2016


Domestic Politics

Kurdish solidarity in Turkey’s restive southeast frustrates its Syria policy

Solidarity with their ethnic kin in Syria is a source of pride for many of Turkey’s Kurds. But Ankara sees the links between the YPG and PKK as a threat to its unity and security, complicating international efforts to end Syria’s war and creating tensions with its NATO ally the United States. It fears the creation of a Kurdish fiefdom in Syria will fuel separatist ambitions at home.

Reuters, Kurdish solidarity in Turkey’s restive southeast frustrates its Syria policy, February 29, 2016


Turkey Frees Two Journalists From Jail After High Court Ruling

Two journalists imprisoned for their reports on alleged government arms-smuggling to Syria were released from jail early on Friday hours after Turkey’s highest court ruled that their rights were violated.

Wall Street Journal, Turkey Frees Two Journalists From Jail After High Court Ruling, February 26, 2016


Turkish presidential spokesman rules out early election

Turkey’s presidential spokesman said on Friday he could “confidently rule out” the possibility of an early election and said the country could hold separate referendums on a new constitution and the question of an executive presidency.

Reuters, Turkish presidential spokesman rules out early election, February 26, 2016


Turkey’s CHP leader resolved not to turn charter table into bargain over ‘regime’

Turkey’s main opposition leader will not engage in “bazaar diplomacy” with the ruling Justice and Development Party (AKP) over the AKP’s ambitions for a change of regime at an inter-party constitution commission the parliament speaker is currently attempting to rebuild.

Hurriyet Daily News, Turkey’s CHP leader resolved not to turn charter table into bargain over ‘regime,’ February 29, 2016