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Turkey Letter: 8 May 2017

Foreign Policy

  • TÜSİAD: EU requires pragmatic, wise response to Turkey paradox
  • Trump to Tell Turkey: We’re Going to Take Raqqa With the Kurds
  • Russia, Iran, Turkey sign on ‘de-escalation zones’ in Syria
  • Turkey aims to boost ties with Arab Gulf states amid free trade talks
  • Putin Meets Erdogan as Russia Pursues Syria Diplomacy Blitz
  • Turkey’s EU dream is over, for now, top official says
  • US plans to press Raqqa button after Erdoğan-Trump summit
  • Turkey to hold referendum on E.U. membership

Economy & Energy

  • Turkey’s industrial production rises in March
  • Turkey’s crude steel output sees sharp increase
  • Turkey’s TAI eyeing cooperation with Boeing in mid-range aircraft development
  • Turkey’s Kale Group, Rolls-Royce to set up joint venture to develop aircraft engines
  • Turkey Plans to Let Banks Securitize Loans to Spur Growth
  • Turkey will see single-digit inflation by end of 2017
  • Surprise Core Drop Suggests Turkey Inflation May Have Peaked
  • Turkey’s trade deficit rises 15.8 percent, exports over 7 percent in April
  • Turkey, Israel working on commercial details of possible gas pipeline

Domestic Politics

  • PM Yıldırım to leave post with sense of accomplishment
  • Turkey to build wall on Turkish-Iranian border
  • Main opposition CHP deputy head, spokesperson Böke resigns
  • Turkey sacks 107 judges and prosecutors linked to Gulen
  • Erdoğan reiterates cabinet reshuffle not on government’s immediate agenda
  • Erdoğan hails ‘new era’ as he rejoins ruling AKP

Foreign Policy

EU requires pragmatic, wise response to Turkey paradox

EU sanctions on Turkey would open deepen the country’s problems instead of encouraging democracy, the secretary-general of the Turkish Industry and Business Foundation (TÜSİAD) has said, noting that the bloc must wisely and pragmatically manage this paradox. “Acting negatively will further deepen the problems, and it won’t be a solution. There won’t be fewer cases of human rights violations or democratic concerns in Turkey,” Bahadır Kaleağası said.

Hurriyet Daily News, EU requires pragmatic, wise response to Turkey paradox, May 8, 2017


Trump to Tell Turkey: We’re Going to Take Raqqa With the Kurds

he Trump administration is ready to press ahead with a U.S.-backed military offensive to evict the Islamic State from its last remaining urban stronghold in the Syrian city of Raqqa over strong objections from Turkey. President Donald Trump is expected to inform his Turkish counterpart, Recep Tayyip Erdogan, of the U.S. plans when he visits the White House later this month.

Foreign Policy, Trump to Tell Turkey: We’re Going to Take Raqqa With the Kurds, May 5, 2017


Russia, Iran, Turkey sign on ‘de-escalation zones’ in Syria

Russia, Iran and Turkey agreed to establish “de-escalation zones” in Syria, signing on to a Russian plan under which President Bashar Assad’s air force would halt flights over designated areas across the war-torn country. The agreement, which a Russian delegate said would go into effect on Saturday, is the latest attempt to reduce violence in the Arab country. But the full details of the proposal were not made available and prospects for its success appeared bleak.

The Washington Post, Russia, Iran, Turkey sign on ‘de-escalation zones’ in Syria, May 4, 2017


Turkey aims to boost ties with Arab Gulf states amid free trade talks

Turkish President Recep Tayyip Erdoğan on May 8 said he aimed to boost economic and military ties with Arab Gulf states, as talks on a free trade zone deal pushed ahead. Erdoğan, who is expected in Kuwait on May 9, said Ankara was involved in “high level strategic dialogue” with the six-nation Gulf Cooperation Council (GCC), the state-run KUNA news agency reported.

Hurriyet Daily News, Turkey aims to boost ties with Arab Gulf states amid free trade talks, May 8, 2017


Putin Meets Erdogan as Russia Pursues Syria Diplomacy Blitz

Russia and Turkey can “change the destiny of the whole region” together, Erdogan told Putin, who said relations between the two countries are acquiring a special status. The meeting is taking place a day after Putin discussed the plan for safe zones with U.S. President Donald Trump in what the White House described as a “very good” phone call.

Bloomberg, Putin Meets Erdogan as Russia Pursues Syria Diplomacy Blitz, May 3, 2017


Turkey’s EU dream is over, for now, top official says

After years of stalemate on Turkey’s bid to join the world’s biggest trading bloc, EU governments say the process is dead, citing Erdogan’s crackdown on dissidents, his ‘Nazi’ jibes at Germany and a referendum giving him sweeping new powers that a rights group says lack checks and balances. “Everybody’s clear that, currently at least, Turkey is moving away from a European perspective,” European Commissioner Johannes Hahn, who oversees EU membership bids, told Reuters. “The focus of our relationship has to be something else,” he said in an interview after EU foreign ministers met in Malta and where France and Germany led efforts to consider a new deal with Ankara based on trade and security ties.

Reuters, Turkey’s EU dream is over, for now, top official says, May 2, 2017


US plans to press Raqqa button after Erdoğan-Trump summit

The United States is mulling over starting the much-anticipated Raqqa operation to defeat the Islamic State of Iraq and the Levant (ISIL) immediately after President Recep Tayyip Erdoğan’s first in-person meeting with President Donald Trump in mid-May, amid reports that the White House may give a green light for providing weapons to the Syrian Kurds in a more direct way.  Ahead of the Erdoğan-Trump meeting on May 16, officials covering Turkey in various state institutions in Washington have intensified their work on messages to be delivered to the Turkish government during the talks.

Hurriyet Daily News, US plans to press Raqqa button after Erdoğan-Trump summit, May 2, 2017


Turkey to hold referendum on E.U. membership

President Recep Tayyip Erdogan says Turkey will decide in a referendum whether to continue pursuing membership in the European Union. In an interview Monday on India television, Erdogan accused the EU of not being “sincere or honest” and of making Turkey wait at its gates. Erdogan said: “Turkey will choose the next path of a Brexit-like referendum.”

The Washington Post, Turkey to hold referendum on E.U. membership, May 1, 2017


Economy & Energy

Turkey’s industrial production rises in March

Turkish industrial output was higher in March compared to the same month last year, according to official data released on May 8. A report from the Turkish Statistical Institute (TÜİK) revealed that Turkey’s calendar-adjusted industrial production rose by 2.8 percent year-on-year in March 2017.

Hurriyet Daily News, Turkey’s industrial production rises in March, May 8, 2017


Turkey’s crude steel output sees sharp increase

Crude steel production in Turkey increased sharply in the first quarter of 2017, reaching 8.8 million tons, according to World Steel Association data released on May 8. The output increased by 14.1 percent year-on-year during the first three months of 2017. Turkey maintained its position as the world’s eighth largest crude steel producer out of 67 countries, corresponding to about 2.13 percent of the global output.

Hurriyet Daily News, Turkey’s crude steel output sees sharp increase, May 8, 2017


Turkey’s TAI eyeing cooperation with Boeing in mid-range aircraft development

Turkey’s TAI wants to build cooperation with Boeing in the U.S. company’s new plans to develop a mid-range aircraft, TAI President and CEO Temel Kotil said on May 8. Speaking to state-run Anadolu Agency, Kotil said he has already written to Boeing regarding the issue. “Boeing has a new plan to make a mid-range aircraft. I took the required permissions from our minister [Fikri Işık] and wrote a letter to them. We want to clinch a partnership with them,” he added.

Hurriyet Daily News, Turkey’s TAI eyeing cooperation with Boeing in mid-range aircraft development, May 8, 2017


Turkey’s Kale Group, Rolls-Royce to set up joint venture to develop aircraft engines

Turkey’s Kale Group will set up a joint venture company with U.K.-based engineering firm Rolls-Royce to develop civilian and fighter aircraft engines including for Turkey’s planned TF-X fighter jet, the companies announced May 8 at a press meeting.  Kale will hold a 51 percent stake in the joint venture, while Rolls-Royce will have the rest, they noted.

Hurriyet Daily News, Turkey’s Kale Group, Rolls-Royce to set up joint venture to develop aircraft engines, May 8, 2017


Turkey Plans to Let Banks Securitize Loans to Spur Growth

Turkey is working on legislation to allow commercial lenders to securitize and sell all of their $515 billion of outstanding loans to investors, as the government seeks to boost credit and spur economic growth. Policy makers have already completed technical work on the measure, which requires a new law to take effect, Deputy Prime Minister Nurettin Canikli said in an interview on Thursday, without providing a detailed time frame. The legislation won’t restrict the type of loans that banks can securitize, he said.

Bloomberg, Turkey Plans to Let Banks Securitize Loans to Spur Growth, May 4, 2017


Turkey will see single-digit inflation by end of 2017

Turkey will see a single-digit inflation rate by the end of 2017, Deputy Prime Minister Nurettin Canikli stated on May 3, amid alarming recent rises in inflation. “We will see this [drop] not only in inflation but also in unemployment at the end of the year,” Canikli told reporters in London, where he was holding a series of meetings. Turkey’s inflation rate increased 11.87 percent year-on-year in April from 11.29 percent in March, data from the Turkish Statistics Institute (TÜİK) showed on May 3.

Hurriyet Daily News, Turkey will see single-digit inflation by end of 2017, May 4, 2017


Surprise Core Drop Suggests Turkey Inflation May Have Peaked

Annual core inflation, which strips out the impact of volatile items such as food, slowed to 9.4 percent from 9.5 percent in March, compared with the median estimate of 9.9 percent in a Bloomberg survey of economists. Headline inflation accelerated for a fifth month to 11.9 percent from 11.3 percent during the same period, the state statistics office said Wednesday — the highest since 2008 and faster than economists forecast.

Bloomberg, Surprise Core Drop Suggests Turkey Inflation May Have Peaked, May 3, 2017


Turkey’s trade deficit rises 15.8 percent, exports over 7 percent in April

Turkey’s year-on-year trade deficit rose by 15.8 percent in April to over $4.9 billion, according to a preliminary estimate revealed by the Customs and Trade Ministry on May 2. Exports for the month rose to $12.83 billion, which is a 7.83 percent increase from April 2016, according to the ministry. Imports also increased by 9.58 percent to $17.74 billion.

Hurriyet Daily News, Turkey’s trade deficit rises 15.8 percent, exports over 7 percent in April, May 2, 2017


Turkey, Israel working on commercial details of possible gas pipeline

Turkey and Israel have been in talks about the commercial details of building a pipeline to carry Israeli gas to Europe via Turkey, a top Israeli official has said, adding that he is optimistic about the process in which a final agreement may be reached soon. In an interview with Turkey’s state-run Anadolu Agency, Shaul Meridor, Director General at the Israeli Ministry of National Infrastructures, Energy and Water Resources, said both sides should first agree on commercial details before progress can be made.

Hurriyet Daily News, Turkey, Israel working on commercial details of possible gas pipeline, May, 2 2017


Domestic Politics

PM Yıldırım to leave post with sense of accomplishment

Prime Minister Binali Yıldırım told reporters on May 6 that he is happy to have successfully completed his duties as Turkey’s last premier, as his post is soon to be abolished following the constitutional changes approved in the April 16 referendum. Yıldırım made the comments on a flight back from Moldova, where he met Moldovan counterpart Pavel Filip to discuss new bilateral agreements.

Hurriyet Daily News, PM Yıldırım to leave post with sense of accomplishment, May 8, 2017


Turkey to build wall on Turkish-Iranian border

Turkey is planning to build a wall along the Turkish-Iranian border as part of measures against the outlawed Kurdistan Workers’ Party (PKK), according to a high-level official. “The PKK has the Maku, Dambat, Navur, Kotr, Keneresh and Şehidan camps inside Iran near the Turkish border. There are some 800-1,000 PKK terrorists in those camps. They enter Turkey, carry out attacks and leave,” an official told daily Hürriyet on May 8, adding that they escape to those camps when security operations are conducted in the eastern province of Ağrı and the Mount Tendürek region.

Hurriyet Daily News, Turkey to build wall on Turkish-Iranian border, May 8, 2017


Main opposition CHP deputy head, spokesperson Böke resigns

Selin Sayek Böke, the main opposition Republican People’s Party (CHP) spokesperson and deputy head responsible for the economy, announced her resignation from her duties on May 6, citing the lack of a political fight within the party against the April 16 referendum results. In her resignation statement, Böke said conceding the April 16 referendum results, which she described as having been “usurped through illegal means,” was an injustice to millions of people who voted against the amendments to shift the country’s governance system to an executive presidency with greatly enhanced powers for President Recep Tayyip Erdoğan.

Hurriyet Daily News, Main opposition CHP deputy head, spokesperson Böke resigns, May 6, 2017


‘Turkey sacks 107 judges and prosecutors linked to Gulen

Turkey’s state-run news agency says a judicial body has dismissed 107 judges and prosecutors as part of an ongoing crackdown on suspected followers of U.S. based cleric Fethullah Gulen, whom Turkey blames for last summer’s failed coup.

The Washington Post, Turkey sacks 107 judges and prosecutors linked to Gulen, May 5, 2017


Erdoğan reiterates cabinet reshuffle not on government’s immediate agenda

A cabinet revision is not currently on the agenda of the government, President Recep Tayyip Erdoğan has said following a six-hour meeting with Prime Minister Binali Yıldırım late on May 2. However, he did hint that a change in the party organization will take place soon after he is re-elected as leader of the Justice and Development Party (AKP).

Hurriyet Daily News, Erdoğan reiterates cabinet reshuffle not on government’s immediate agenda, May 3, 2017


Erdoğan hails ‘new era’ as he rejoins ruling AKP

The ruling Justice and Development Party (AKP) carries the heritage of a holy cause, President Recep Tayyip Erdoğan said as he regained his party membership with a signature at the party headquarters on May 2. “Even if it felt like centuries, I am particularly excited that our 979-day-long separation, which is like a drop in the historical continuity, is at an end,” Erdoğan said in a ceremony in which he signed the membership form to rejoin the party on May 2.

Hurriyet Daily News, Erdoğan hails ‘new era’ as he rejoins ruling AKP, May 2, 2017