New year, old problems
After a brief update of the political scene, the New Year’s politics coverage starts with the Idlib crisis, which has pushed a quarter million refugees to Turkey’s borders. President Erdogan will try to hash out another ceasefire with Putin on the 8th of January meeting, but it might take some saber-rattling to stop Assad from encroaching further upon the Turkish border.
We then turn to the story of Turkey sending soldiers to Libya-cum-EastMed pipeline. To make a long story short, Libya could turn into Turkey’s Syria, which has already turned into its Vietnam.
At home, Erdogan seems to have run out of clever ideas, real money and allies except MHP, which is becoming parasitic on the AK Party. Can he survive the winter and preserve his popularity against Ekrem Imamoglu, Ali Babacan and Ahmet Davutoglu?
On the econ front, what we are seeing is nothing new. Growth is not all that strong; Ankara, deep down, knows it and feels it and thus, it’s doing all it can to boost it through stimulus – yet again. Further lira weakness and “dollarization” stand in its way as the potential spoilers, to which Ankara is responding basically in two ways: a) F/X intervention through state banks, and b) taxation, through direct and indirect means, of foreign currency deposits, in (what looks increasingly like) a game of whack-a-mole.
The politics author refrained from commenting on the rising US-Iran tension because it could lead to anywhere or nowhere at this juncture, but the bolder member of our team, the Cosmic Strategist, took the challenge and dived right in. After mumbling incoherently about US-Iran imbroglio and its potential consequences, He concludes there are other reasons to be wary of Turkish financial assets.
Now read on...
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