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Turkey Letter: 3 October 2016

Foreign Policy

  • Turkey Risks Kurdish War on Two Fronts as Army Advances in Syria
  • Erdoğan sends strong messages to EU, US
  • EU Migrant Deal With Turkey Largely Working, European Commission Says
  • Turkish military says 15 FSA fighters killed in Syria as clashes intensify
  • Turkey to complete Syria border wall within 5 months
  • US diplomat pays tribute to ‘those stood against the coup attempt’ in Turkey
  • Boris Johnson wants ‘jumbo’ free trade deal with Turkey
  • Erdoğan calls on Muslim countries to unite against US 9/11 bill
  • NY Judge in Turkish Gold Trader Prosecution Won’t Leave Case

Economy & Energy

  • Turkish Lira Weakens as Slowing Inflation Stokes Rate-Cut Bets
  • Turkey to draw lessons from Moody’s cuts, says reforms underway
  • Turkey Blowout Auction Shows Some See Silver Lining in Junk
  • Declining Turkish Food Prices Give Central Bank Room to Ease
  • Turkish Private Equity Deals Signal Investment Appetite After Failed Coup
  • Corporate Purges Spur Biggest Rallies on Turkey’s Stock Market
  • TUI Withstands Turkey Shock as Full-Year Earnings Edge Higher

Domestic Politics

  • Turkey Extends State of Emergency
    Erdoğan’s remarks on treaty that formed modern Turkey irk opposition
  • Turkey’s Post-Coup Crackdown Hits Kurds
  • Turkey pulls plug on 20 radio, TV channels in post-coup emergency decree

Foreign Policy

Turkey Risks Kurdish War on Two Fronts as Army Advances in Syria

When President Recep Tayyip Erdogan sent his army into Syria last month, he wasn’t just striking a blow against Islamic State: a second goal was to stop Kurds from creating a de facto state.

Bloomberg, Turkey Risks Kurdish War on Two Fronts as Army Advances in Syria, September 28, 2016


Erdoğan sends strong messages to EU, US

Turkish President Recep Tayyip Erdoğan has sent strong messages to the European Union over its attitude toward Turkey and the United States over its policies in the Middle East.

Hurriyet Daily News, Erdoğan sends strong messages to EU, US, October 3, 2016


EU Migrant Deal With Turkey Largely Working, European Commission Says

The European Union’s deal with Turkey to prevent large flows of migrants entering the bloc continues to work, but Greece still has to do more to improve reception facilities for asylum seekers, the EU’s executive arm said Wednesday.

Wall Street Journal, EU Migrant Deal With Turkey Largely Working, European Commission Says, September 28, 2016


Turkish military says 15 FSA fighters killed in Syria as clashes intensify

Fifteen Ankara-backed Free Syrian Army (FSA) fighters have been killed in the last 24 hours during clashes in Syria as a part of the ongoing Euphrates Shield operation, the Turkish Armed Forces has announced, as clashes intensified in the region on the 41st day of the operation.

Hurriyet Daily News, Turkish military says 15 FSA fighters killed in Syria as clashes intensify, October 3, 2016


Turkey to complete Syria border wall within 5 months

A concrete wall being built to stop illegal crossings along the length of Turkey’s 900-km (560-mile) border with Syria will be finished by the end of February, an official at a Turkish state institution with knowledge of the project said on Wednesday.

Reuters, Turkey to complete Syria border wall within 5 months, September 28, 2016


US diplomat pays tribute to ‘those stood against the coup attempt’ in Turkey

U.S. Deputy Secretary of State Antony Blinken on Sept. 27 visited the Turkish parliament, which was bombed during the failed military coup of July 15.

Hurriyet Daily News, US diplomat pays tribute to ‘those stood against the coup attempt’ in Turkey, September 27, 2016


Boris Johnson wants ‘jumbo’ free trade deal with Turkey

Foreign Secretary Boris Johnson said on Tuesday he hoped for a “jumbo” free trade deal with Turkey and backed Ankara’s policy on Syria, seeking to bolster ties with the European Union candidate country after Britain’s vote to leave the bloc.

Reuters, Boris Johnson wants ‘jumbo’ free trade deal with Turkey, September 27, 2016


Erdoğan calls on Muslim countries to unite against US 9/11 bill

Turkish President Recep Tayyip Erdoğan on Oct. 2 urged Islamic nations to unite in solidarity against a newly passed bill in the U.S. that allows families of the victims of the 9/11 attacks to sue Saudi Arabia for their losses.

Hurriyet Daily News, Erdoğan calls on Muslim countries to unite against US 9/11 bill, October 3, 2016


NY Judge in Turkish Gold Trader Prosecution Won’t Leave Case

Turkish-Iranian gold trader Reza Zarrab failed to persuade the New York judge handling his U.S. bank laundering prosecution to step down from the case.

Bloomberg, NY Judge in Turkish Gold Trader Prosecution Won’t Leave Case, September 29, 2016


Economy & Energy

Turkish Lira Weakens as Slowing Inflation Stokes Rate-Cut Bets

Turkey’s lira weakened the most in emerging markets and bonds gained as slowing inflation prompted investors to bet policy makers will step up the pace of interest-rate cuts.

Bloomberg, Turkish Lira Weakens as Slowing Inflation Stokes Rate-Cut Bets, October 3, 2016


Turkey to draw lessons from Moody’s cuts, says reforms underway

Turkey will draw lessons from its credit downgrade to “junk” by Moody’s but is already tackling some of the challenges highlighted by the agency, including structural reform and improving the quality of its institutions, Finance Minister Naci Agbal told Reuters.

Reuters, Turkey to draw lessons from Moody’s cuts, says reforms underway, September 28, 2016


Turkey Blowout Auction Shows Some See Silver Lining in Junk

For at least one group of bond investors in Turkey, the country’s downgrade to junk at Moody’s Investors Service was a signal to jump in after yields became too attractive to ignore.

Bloomberg, Turkey Blowout Auction Shows Some See Silver Lining in Junk, September 27, 2016


Declining Turkish Food Prices Give Central Bank Room to Ease

Turkish food prices showed the biggest monthly drop seen in September, bringing annual consumer inflation to the lowest level in over a year and giving more leeway to monetary policy makers to cut borrowing costs this month.

Bloomberg, Declining Turkish Food Prices Give Central Bank Room to Ease, October 3, 2016


Turkish Private Equity Deals Signal Investment Appetite After Failed Coup

Turkey’s biggest casual dining chain, Big Chefs, sold a minority share to an internationally backed private-equity firm, a sign that resilient consumer demand is drawing some investors to the country, despite July’s failed coup rattling the economy.

Wall Street Journal, Turkish Private Equity Deals Signal Investment Appetite After Failed Coup, September 25, 2016


Corporate Purges Spur Biggest Rallies on Turkey’s Stock Market

In Turkey, the government’s forced takeover of a company can spur a rally. A court in Ankara handed over 18 corporations owned by Akin Ipek to the Savings Deposit Insurance Fund this month because of his ties to an expatriate Muslim cleric the government blames for a failed coup in July.

Bloomberg, Corporate Purges Spur Biggest Rallies on Turkey’s Stock Market, September 30, 2016


TUI Withstands Turkey Shock as Full-Year Earnings Edge Higher

TUI AG, Europe’s largest tour operator, said full-year earnings will probably beat its forecast after the company managed to keep its hotels and cruise ships full this summer even with a shift in business from the eastern to western Mediterranean prompted by terrorism attacks in Turkey.

Bloomberg, TUI Withstands Turkey Shock as Full-Year Earnings Edge Higher, September 28, 2016


Domestic Politics

Turkey Extends State of Emergency

Turkey’s government will extend its emergency powers by three months, citing sweeping terrorism threats facing the country following the failed July 15 coup.

Wall Street Journal, Turkey Extends State of Emergency, October 3, 2016


Erdoğan’s remarks on treaty that formed modern Turkey irk opposition

President Recep Tayyip Erdoğan’s suggestion that the Treaty of Lausanne, which largely gave Turkey its present borders instead of the rump state envisioned in the Treaty of Sèvres, was “presented as a victory” has drawn an angry reaction from the Republican People’s Party (CHP).

Hurriyet Daily News, Erdoğan’s remarks on treaty that formed modern Turkey irk opposition, September 29, 2016


Turkey’s Post-Coup Crackdown Hits Kurds

A post-coup crackdown in Turkey has expanded into the restive Kurdish minority’s heartland, exacerbating tensions after a rare show of solidarity by Kurdish lawmakers with the democratically elected government. Turkey’s Education Ministry suspended 11,285 teachers this month for allegedly supporting Kurdish separatists. The government also removed by decree 24 elected mayors from pro-Kurdish parties accused of aiding the outlawed Kurdistan Workers’ Party, or PKK.

Wall Street Journal, Turkey’s Post-Coup Crackdown Hits Kurds, September 26, 2016


Turkey pulls plug on 20 radio, TV channels in post-coup emergency decree

Turkey has ordered the closure of 20 television and radio stations, including one that airs children’s programs, on charges they spread “terrorist propaganda”, adding to fears that emergency rule is being used to stifle the media.

Reuters, Turkey pulls plug on 20 radio, TV channels in post-coup emergency decree, September 30, 2016