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Turkey Letter: June 04, 2018

Foreign Policy:

  • Turkey, US endorse roadmap for Syrian city of Manbij
  • Turkey to respond to US over steel, aluminum tariffs by June 21
  • Turkey voices ‘support for Georgia’s territorial integrity’
  • Germany, Turkey mark 25th anniversary of racist attack
  • Turkish FM accuses ‘some Muslim countries’ for trying ‘to demolish economy’
  • Turkish ambassador returns to US post after Jerusalem spat
  • International treaty on counter-terrorism comes into effect in Turkey
  • Erdogan, Putin speak on phone, stress ‘importance of using local currencies in bilateral trade

Economy and Energy:

  • Turkey Inflation Accelerates in May on Weak Currency
  • Turkish Banks Face Rising Pile of Debt- Restructuring Demands
  • Turkish Stocks Set for Losing Week With June Vote Looming
  • Moody’s slashes Turkish growth forecast to 2.5 percent
  • Turkey Is Ready to Hike Rates If May Inflation Rises
  • New Regulation in Turkey ‘finishes’ Uber, say taxi drivers
  • Turkey’s exports rose 12.2 percent in May

 Domestic Politics:

  • Erdogan opponent warns of Turkey’s ‘society of fear’
  • Turkey’s opposition forces establish ‘Fair Election Platform’
  • Islamist party seeks Erdogan support eroding in Turkey election
  • Turkey’s top court rejects CHP cancellation appeal of election safety law
  • Erdogan’s ‘crazy’ Istanbul canal plan is dividing opinion
  • CHP Candidate İnce blasts Erdogan over megaproject expenses

 

Foreign Policy:

 

Turkey, US endorse roadmap for Syrian city of Manbij

Both Turkey and the US endorsed a roadmap for the Syrian city of Manbij following a meeting on June 4th between both countries foreign ministers. Both leaders also discussed potential steps to improve security in Manbij, but did not offer any details or a timetable in regards to the agreed upon roadmap.

Reuters, Turkey, US endorse roadmap for Syrian city of Manbij, June 4, 2018


Turkey to respond to US over steel, aluminum tariffs by June 21

Turkey will soon levy tariffs against roughly $266.5 million on the imports of 22 U.S. items including tobacco, almonds, paper, and coal. The items with the highest tariffs include whiskey (40%) and auto-motives (35%), according to sources.

Hurriyet Daily News, Turkey to respond to US over steel, aluminum tariffs by June 21, June 4, 2018 


Turkey voices ‘support for Georgia’s territorial integrity’

The Syrian regime recently announced its recognition of Abkhazia and South Ossetia, two breakaway territories in Georgia. This was soon met by the Turkish Foreign Ministry issuing a statement announcing its support for the territorial integrity of Georgia. A spokesman for the Turkish Foreign Minister announced that the recognition of the two territories was a clear violation of international law enacted by the Syrian regime.

Hurriyet Daily News, Turkey voices ‘support for Georgia’s territorial integrity’, May 31, 2018


Germany, Turkey mark 25th anniversary of racist attack

German Chancellor Angela Merkel and Turkish Foreign Minister Mevlut Cavusoglu met together in a commemoration of the 1993 firebombing in Solingen, Germany, which led to the deaths of two Turkish women and three girls. The attack was perpetrated by right-wing extremists and were part of a string of racist attacks that took place following German unification.

Washington Post, Germany, Turkey mark 25th anniversary of racist attack, May 29, 2018


Turkish FM accuses ‘some Muslim countries’ for trying ‘to demolish economy’

Turkish Foreign Minister Mevlut Cavusoglu recently blamed the country’s economic woes on financial institutions and foreign countries abroad as a plot to demolish Turkey after the coup attempt in 2016 had failed. Cavusoglu specifically blamed financial institutions, the interest rate lobby, and certain Muslim countries which he would not name.

Hurriyet Daily News, Turkish FM accuses ‘some Muslim countries’ for trying ‘to demolish economy’, May 30, 2018


Turkish ambassador returns to US post after Jerusalem spat

Turkish ambassador Serdar Kilic will return back to his position after being recalled to Turkey for consultations. Kilic was recalled to Turkey after a dispute over the decision to move the U.S. Embassy in Israel to Jerusalem.

Washington Post, Turkish ambassador returns to US post after Jerusalem spat, May 31, 2018


International treaty on counter-terrorism comes into effect in Turkey

The Additional Protocol of the Council of Europe Convention on the Prevention of Terrorism was put into effect starting on June 1st. The treaty is the first of its kind to address the problem of foreign terrorist fighters and was signed in October of 2015,

Hurriyet Daily News, International treaty on counter-terrorism comes into effect in Turkey, June 1, 2018


Erdogan, Putin speak on phone, stress ‘importance of using local currencies in bilateral trade’

Turkish President Erdogan and Russian President Putin held discussions on May 29th highlighting the importance of using local currencies in bilateral trade. Both countries leaders also discussed Syria, economic relations, and the opening of the Akkuyu Nuclear Power Plant.

Hurriyet Daily News, Erdogan, Putin speak on phone, stress ‘importance of using local currencies in bilateral trade’, May 29, 2018 


Economy and Energy:

 

Turkey Inflation Accelerates in May on Weak Currency

The annual inflation rate jumped 12.2% during the month of May, which is the highest level in six months. Volatility for the Turkish lira picked up after Erdogan announced last month that he would take more control over the economy if he were to win the up-coming election.

Bloomberg, Turkey Inflation Accelerates in May on Weak Currency, June 4, 2018


Turkish Banks Face Rising Pile of Debt- Restructuring Demands

A plethora of Turkish banks are facing a large surge in demands from companies that want to reorganize debt payments. The demands for restructuring is largely contributed to the plunge of the Turkish lira, which has led to a spike in the cost of Turkish corporations foreign-currency debt.

Bloomberg, Turkish Banks Face Rising Pile of Debt- Restructuring Demands, May 31, 2018


Turkish Stocks Set for Losing Week With June Vote Looming

Turkish stocks continued to tumble and are on pace for the biggest decline in two years. In addition, the lira is down 18% this year and the Turkish corporate sector has over $330 billion in foreign-currency debt. All of these trends are made even worse by the fact that the Turkish elections are up-coming, with polls showing no clear political party holding a majority in parliament.

Bloomberg, Turkish Stocks Set for Losing Week With June Vote Looming, June 1, 2018


Moody’s slashes Turkish growth forecast to 2.5 percent

Moody’s recently announced that they have dropped Turkey’s GDP forecast for 2018 from 4% to 2.5 citing growing risks and large market pressure. Moody’s also dropped Turkey’s 2019 forecast from 3.5% to 2%; although, the Turkish economy grew 7.4% in 2017.

Hurriyet, Daily News, Moody’s slashes Turkish growth forecast to 2.5 percent, May 30, 2018


Turkey Is Ready to Hike Rates If May Inflation Rises

Following the economic turmoil that has enveloped the Turkish economy, officials at Turkey’s central bank announced new ways to try and stop rising inflation rates. The central bank boosted borrowing costs by 300 basis points and reformed its interest-rate system according to officials from the central bank.

Bloomberg, Turkey Is Ready to Hike Rates If May Inflation Rises, May 29, 2018


New Regulation in Turkey ‘finishes’ Uber, say taxi drivers

The Turkish government announced sweeping regulations to “prevent illegal passenger transportation” in an attempt to discourage individuals to drive for Uber. The regulations issue fines to all those that are caught breaking the rules and also will revoke the necessary certificates if that individual is caught a second time.

Hurriyet Daily News, New Regulation in Turkey ‘finishes’ Uber, say taxi drivers, May 30, 2018


Turkey’s exports rose 12.2 percent in May

Despite a faltering economy, Turkish exports jumped 12.2% in May according to the Turkish Exporters’ Assembly. The large increase in exports equaled out to about $13.96 billion, with a majority of the exports going to EU nations. 20% of the Turkish exports in May came from the automotive section, which was followed by the clothing and chemical products sectors.

Hurriyet Daily News, Turkey’s exports rose 12.2 percent in May, June 1, 2018


 Domestic Politics:

 

Erdogan opponent warns of Turkey’s ‘society of fear’

CHP presidential candidate Muharrem Ince made a campaign stop at the medical school of a local Istanbul university in late May. However, hours after his stop, the dean of the medical school had been forced to step down after accusation of using the medical school’s campus for political purposes. Ince claims this incident is creating a society of fear, where citizens are afraid to support his campaign openly due to fears of government backlash.

Financial Times, Erdogan opponent warns of Turkey’s ‘society of fear’, June 1, 2018 


Ali Koc, scion of Turkey’s wealthiest family, elected Fenerbahce chair

Turkish football powerhouse Fenerbahce elected businessman Ali Koc in a landslide victory against Aziz Yildirim. Yildirim had served as chairman for twenty years, but had become unpopular after being sentenced to six years in prison for match fixing.

Hurriyet Daily News, Ali Koc, scion of Turkey’s wealthiest family, elected Fenerbahce chair, June 3, 2018


 Turkey’s opposition forces establish ‘Fair Election Platform’

Five opposition parties along with various civil society networks have established a ‘fair election platform’ in order to assure the integrity of the upcoming June elections. Parts of the platform include observers for ballot boxes to ensure all votes are secure.

Hurriyet Daily News, Turkey’s opposition forces establish ‘Fair Election Platform’, June 1, 2018 


Islamist party seeks Erdogan support eroding in Turkey election

The Saadet (Felicity) Party believes support for President Erdogan has diminished and that the AKP has strayed away from its Islamic roots. Both the AKP and Saadet party’s hold Islamic values and rely on the support from individuals who are religious. The Saadet Party hopes to take some of the votes from the AKP in the upcoming elections.

Reuters, Islamist party seeks Erdogan support eroding in Turkey election, May 29, 2018 


Turkey’s top court rejects CHP cancellation appeal of election safety law

The Constitutional Court rejected the CHP’s appeal for the cancellation of legislation that requires changes in Turkey’s electoral laws. The CHP also wanted to cancel a procedure that allows for the appointment of ballot box committee chairs, as well as an article that allows security officials to enter election areas if they receive complaints over security concerns.

Hurriyet Daily News, Turkey’s top court rejects CHP cancellation appeal of election safety law, May 31, 2018


 Erdogan’s ‘crazy’ Istanbul canal plan is dividing opinion

President Erdogan has recently opened up the idea of opening up a canal to connect the Black Sea and the Sea of Marmara. The canal is one of President Erdogan’s megaprojects that he has proposed, and has made it a central campaign promise. Erdogan hopes the canal would lessen the enormous amount of traffic that flows through the Bosporus.

Financial Times, Erdogan’s ‘crazy’ Istanbul canal plan is dividing opinion, May 29, 2018 


CHP Candidate İnce blasts Erdogan over megaproject expenses

CHP Candidate Ince criticized President Erdogan’s megaproject ideas as carrying hidden costs that are being paid for by taxpayers. Ince cited that the government is giving contracts to big companies and that if the financial targets are not achieved by the companies, Turkish taxpayers bare the cost.

Hurriyet Daily News, CHP Candidate İnce blasts Erdogan over megaproject expenses, May 29, 2018