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Turkey Letter: 4 April 2016

Foreign Policy

  • Crackdowns by Turkey’s Erdogan Are ‘Troubling,’ Obama Says
  • Turkey’s Erdogan says Obama spoke ‘behind my back’ on press freedom
  • Turkish, American delegations meet to seek a formula over PYD role
  • Greece Begins Migrant Returns to Turkey
  • Turkish foreign minister questions Europe’s determination on terrorism
  • Erdogan’s Attempt to Suppress German Satire Has the Opposite Effect

Economy & Energy

  • Turkish Economy Defies Political Chaos With Further Growth
  • Turkish Stocks Cap Best Quarter in Three Years, Lira Gains
  • Turkish Exports Rise First Time in 4 Months, Narrowing Trade Gap
  • Turkish Inflation Rate Slows to Seven-Month Low
  • Swaps Show Whoever’s Next Turkish Central Banker Will Cut Rates
  • Oil Proves Unlikely Boon to Turkish Banks That Wrote Off 2016
  • Zarrab Heading to N.Y. to Face Iran Sanction-Busting Charges
  • Turkish firms in Russia struggle as diplomatic row rages
  • Security concerns send Turkish foreign visitor arrivals tumbling

Domestic Politics

  • Turkey’s Erdogan says no room for dialogue in Kurdish conflict
  • PKK militant group claims responsibility for Turkish car bombing
  • Davutoğlu ‘stands behind’ Army’s denial of coup plans
  • Turkey Tries Journalists as its President Visits U.S.
  • Turkish military accuses media of damaging morale, launches legal action

Foreign Policy

Crackdowns by Turkey’s Erdogan Are ‘Troubling,’ Obama Says

President Barack Obama said Friday he was concerned that crackdowns against the press by Turkish President Recep Tayyip Erdogan could lead his nation down a “troubling” path. The comments, which represented a rare pointed critique of the leader of a NATO ally, came the day after Turkish security officials clashed with protesters and reporters before Erdogan delivered a speech in Washington. Erdogan and Obama later met briefly on the sidelines of a dinner at the White House.

Bloomberg, Crackdowns by Turkey’s Erdogan Are ‘Troubling,’ Obama Says, April 1, 2016


Turkey’s Erdogan says Obama spoke ‘behind my back’ on press freedom

Turkish President Tayyip Erdogan accused U.S. counterpart Barack Obama of going behind his back for criticizing Turkey’s press freedom record and linked it to efforts to “divide” Turkey, media reports said on Sunday.

Reuters, Turkey’s Erdogan says Obama spoke ‘behind my back’ on press freedom, April 3, 2016


Turkish, American delegations meet to seek a formula over PYD role

Days after Turkish and American presidents, Recep Tayyip Erdoğan and Barack Obama respectively, held talks in Washington D.C. to discuss future phases of the joint fight against jihadists in Syria and Iraq, a delegation composed of United States’ soldiers and a diplomat has arrived in Ankara to find a formula over the role of the military wing of the Democratic Union Party (PYD) in plans to re-take the Manjib region.

Hurriyet Daily News, Turkish, American delegations meet to seek a formula over PYD role, April 4, 2016


Greece Begins Migrant Returns to Turkey

Hundreds of migrants seeking new lives in Europe were transferred from Greece to Turkey on Monday, marking the start of an effort by the European Union and Ankara to stem a regional crisis over migrants.

Wall Street Journal, Greece Begins Migrant Returns to Turkey, April 4, 2016


Turkish foreign minister questions Europe’s determination on terrorism

Turkish police directly contacted their Belgian counterparts last July when they deported a Belgian national who would go on to blow himself up in Brussels Airport last week, Turkey’s foreign minister said Monday.

Washington Post, Turkish foreign minister questions Europe’s determination on terrorism, March 28, 2016


Erdogan’s Attempt to Suppress German Satire Has the Opposite Effect

If President Recep Tayyip Erdogan of Turkey had hoped that summoning the German ambassador would get a video poking fun at him by a German satire program removed from the Internet, he was wrong.

Instead, the move had any number of consequences, including provoking a diplomatic dust-up with Germany and a fresh round of ridicule of Mr. Erdogan for playing to type.

New York Times, Erdogan’s Attempt to Suppress German Satire Has the Opposite Effect, March 30, 2016


Economy & Energy

Turkish Economy Defies Political Chaos With Further Growth

Turkey’s economy grew by 4% in 2015, beating forecasts and joining the world’s best-performing emerging markets despite political turbulence and rising security threats. Turkish gross domestic product last year rose to 1.95 trillion liras, or $720 billion at current prices, the state-statistics agency in Ankara said Thursday.

Wall Street Journal, Turkish Economy Defies Political Chaos With Further Growth, March 31, 2016


Turkish Stocks Cap Best Quarter in Three Years, Lira Gains

Turkish stocks capped their best performance in three years and the lira extended its second straight quarterly gain as cheap valuations and a dovish Federal Reserve boosted demand for the nation’s assets.

Bloomberg, Turkish Stocks Cap Best Quarter in Three Years, Lira Gains, March 31, 2016


Turkish Exports Rise First Time in 4 Months, Narrowing Trade Gap

Turkey’s trade gap shrank in February from a year earlier as exports rose for the first time since October. The shortfall narrowed to $3.17 billion from $4.7 billion in February 2015, compared with the median estimate of $3.2 billion in a Bloomberg survey. Imports dropped 8.1 percent to $15.6 billion, while exports rose 1.4 percent to $12.4 billion, Turkey’s state statistics institute in Ankara said on its website Thursday.

Bloomberg, Turkish Exports Rise First Time in 4 Months, Narrowing Trade Gap, March 31, 2016


Turkish Inflation Rate Slows to Seven-Month Low

Turkish inflation slumped in March to a seven-month low, official data showed Monday, fueling expectations Turkey’s central bank will seize on the surprise slowdown to press ahead with interest-rate cuts. Annual inflation eased to 7.5% in March from 8.8% in February, according to the state-statistics agency, below the 8.1% forecast in a survey of economists conducted by The Wall Street Journal.

Wall Street Journal, Turkish Inflation Rate Slows to Seven-Month Low, April 4, 2016


Swaps Show Whoever’s Next Turkish Central Banker Will Cut Rates

Forget the Turkish government’s pronouncements on the need for lower borrowing costs. The central bank will probably keep cutting them anyway, according to the swaps market. Swaps that gauge one-month interest-rate expectations for the overnight-lending rate in two months time closed at 9.83 percent on Wednesday, the lowest since July. While they have since risen about three basis points, that’s still 65 basis points below the upper end of the rates corridor. The drop comes less than a month before central bank Governor Erdem Basci’s term expires.

Bloomberg, Swaps Show Whoever’s Next Turkish Central Banker Will Cut Rates, March 31, 2016


Oil Proves Unlikely Boon to Turkish Banks That Wrote Off 2016

When one of Turkey’s biggest banks predicted in January the country’s lenders may not sell a single Eurobond in 2016, few could have foreseen that an oil rally would help drive a surge in issuance. Benchmark-sized international bond sales by Turkish banks have climbed to $1.75 billion since Garanti Bankasi AS Chief Executive Officer Fuat Erbil made the prediction on Jan. 21. Brent crude sank to a 12-year low a day before he spoke, triggering an indiscriminate selloff that hammered Turkish assets even though the nation imports more than 90 percent of its fuel.

Bloomberg, Oil Proves Unlikely Boon to Turkish Banks That Wrote Off 2016, April 3, 2016


Zarrab Heading to N.Y. to Face Iran Sanction-Busting Charges

A Turkish-Iranian gold trader, accused in 2013 of bribing Turkey’s cabinet ministers, is heading to New York from Miami to face charges that he was involved in a conspiracy to evade U.S. sanctions against Iran. Reza Zarrab waived his right to a bond hearing in Miami and a judge agreed on Friday to let him be transferred to New York, according to court records. He’s been in U.S. custody since his arrest in Miami on March 19. No hearing date has been set in New York.

Bloomberg, Zarrab Heading to N.Y. to Face Iran Sanction-Busting Charges, April 1, 2016


Turkish firms in Russia struggle as diplomatic row rages

Four months after President Vladimir Putin accused Ankara of a “stab in the back”, Turkish business executives in Russia are getting used to saying hasty goodbyes. “Every week another friend calls to say he’s leaving,” one Turkish businessman based in Moscow told Reuters. “It’s become very difficult for Turks to do business here.”

Reuters, Turkish firms in Russia struggle as diplomatic row rages, March 30, 2016


Security concerns send Turkish foreign visitor arrivals tumbling

The number of foreign visitors going to Turkey fell 10 percent in February, the biggest drop in a decade, amid security concerns for a country feeling the spillover effects from the war in Syria.

Reuters, Security concerns send Turkish foreign visitor arrivals tumbling, March 29, 2016


Domestic Politics

Turkey’s Erdogan says no room for dialogue in Kurdish conflict

Turkish President Tayyip Erdogan on Monday ruled out reviving peace talks with the outlawed Kurdistan Workers Party (PKK) and vowed to stamp out the conflict, at its deadliest in two decades, once and for all. Two members of the security forces were killed in fighting in the mainly Kurdish southeast on Monday, officials said.

Reuters, Turkey’s Erdogan says no room for dialogue in Kurdish conflict, April 4, 2016


PKK militant group claims responsibility for Turkish car bombing

The outlawed Kurdistan Workers Party (PKK) on Friday claimed responsibility for a car bomb attack a day earlier that killed seven police officers and wounded 27 people in southeast Turkey’s city of Diyarbakir. In a statement on its website, the PKK’s armed wing said it had carried out the bombing. The attack, a day before Prime Minister Ahmet Davutoglu’s visit to the largely Kurdish southeast, was one of the largest car bombings in months of violence in the region.

Reuters, PKK militant group claims responsibility for Turkish car bombing: website, April 1, 2016


Davutoğlu ‘stands behind’ Army’s denial of coup plans

Turkish Prime Minister Ahmet Davutoğlu said he stood behind a March 31 announcement by the Turkish General Staff, which denied allegations that some members of the military were planning a coup, adding the statement was released “upon his permission.”

Hurriyet Daily News, Davutoğlu ‘stands behind’ Army’s denial of coup plans, April 3, 2016


Turkey Tries Journalists as its President Visits U.S.

Two high-profile Turkish journalists facing life in prison head to court this week as President Recep Tayyip Erdogan visits Washington, which has signaled its keen interest in a case that has become a bellwether for press freedom in Turkey.

Wall Street Journal, Turkey Tries Journalists as its President Visits U.S., March 30, 2016


Turkish military accuses media of damaging morale, launches legal action

The Turkish military said on Thursday it had launched legal action against unspecified media outlets over reports it said were damaging morale, as Turkey faces an almost unprecedented combination of national security threats.

Reuters, Turkish military accuses media of damaging morale, launches legal action, March 31, 2016