In stable, but critical condition
Turkey breathed a sigh of collective relief, as pressure from Turkey and the international community forced Assad to back off from an assault on Idlib City and the CBRT, contrary to consensus, over-delivered. Yet, this is most likely only a brief respite, before even more daunting contests of will power will test the nation. Ankara is determined to stay in Syria and to stop PYD-YPG from carving an autonomous homeland, which we think are incompatible. The Syria question -- and its concomitant of whether Turkey should move to Russian-Iran orbit or renew wows with the US and EU -- is still up in the air.
It appears that the US is permanently settling in Eastern Syria and perhaps even making plans to “go without Turkey”, which would suggest Turkish non-compliance with Iran sanctions could beget painful retaliation. The prospect of any financial aid from EU has dimmed further, as the judiciary began apprehending and convicting EU nationals for presumed terrorist activities, once again.
President Erdogan will meet Putin on Monday, then travel to New York for the UN opening ceremony, where informal contact with the White House reps is almost certain, and finish the month with a critical summit with Chancellor Merkel. He should have gathered enough information at the end of the month to make his choice: To stay with Russia-Iran and suffer the economic consequences, or to eat humble pie?
Having reported on the Q2 GDP data and the CBRT decision during the week, we quickly review what would be relatively encouraging to see in the MTEP that is planned for release this week, share a few thoughts on the latest presidential decree that essentially forces contracts between two resident entities to be made in liras rather than in foreign currencies, and briefly look at the July BOP data.
Cosmo doesn’t yet believe there are opportunities in the Turkish assets… unless, you truly believe in President Erdogan.
Now read on...
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