10 December 2014 News Round-up

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Last week the new judiciary bills, as well as the decisions of the National Education Council have been the controversial items on Turkey’s agenda. Meanwhile, new figures released on Turkey’s economy have mostly been negative.

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The European Court of Human Rights (ECHR) has ruled that the Turkish government’s policies towards the Alevis, particularly its refusal to recognise Cemevis as places of worship, are discriminatory. The statement came as the court ruled in favour of the Republican Education and Cultural Centre, the Cem Vakfi, which sued the Turkish government for not paying the electricity bills of a Cemevi in Istanbul – something the government does for mosques, churches and synagogues. Prime Minister Ahemet Davutoglu has stated that the ruling will not affect the current efforts at reconciliation with the Alevi community.

On Tuesday, the Turkish Parliament passed a judicial bill, approved by the government, which seeks to raise the salary of judges and prosecutors, as well as increase the number of chambers. The bill has been met with criticism from many who see it as an infringement by the government on the judiciary. This is the view held by the chief judge of the Supreme Court of Appeals, Ali Alkan, who claims that the independence of the judiciary is at risk. The Justice Ministry has dismissed these claims.

The new law also makes further changes to the judiciary, eliminating the ability of the Supreme Court of Appeals to reject new judges and prosecutors suggested by the Supreme Board of Judges and Prosecutors. The ability of the Appeals court to reject nominations is seen as an important check against a government attempting to use the judiciary for political appointments. Furthermore, the newly approved law lowered the requirements for police and prosecutors seeking search warrants, reducing the requirement from the existence of evidence to reasonable doubt, as well as restricting the ability of defence attorneys to review the evidence against their client.

An investigation has shown that around 160 individuals were wiretapped during the period 2008 – 2009. Some of these were high-level figures, such as Ferit Sahenk and Ali Koc. The list also included journalists and soldiers. The investigation has uncovered that these instances of wiretapping were justified by adding names to a list of people suspected of being affiliated with terrorist organisations. Often code names were used, with the individual’s surname, job and status being omitted. The head of Istanbul’s Intelligence branch at the time, Ali Fuat Yilmazer, has been arrested, as have other individuals. Some of these were linked to the Ergenekon case.

It has been reported that Abd al-Basset Azzouz, the leader of Al-Qaeda in Libya, was detained in Yalova, northwest Turkey, last month. Azzouz was, after the death of Bin Laden, appointed by Ayman al-Zawahri to lead the operations in Libya, and he was involved in the attack that led to the death of US envoy to Libya Christopher Stephens in 2012. He entered Turkey using a fake passport, and was detained after an operation that took place on November 13, a result of cooperation between Turkish Intelligence and the CIA.

Muammer Guler, the former Interior Minister, has admitted to giving a reference to the Iranian businessman Reza Zarrab for a bank in China, but has denied receiving any form of payment in return. Guller is currently under investigation for corruption charges.

16 have been arrested over the deaths of four people in Diyarbakir during the October 5th protests, with five more cases pending.

Turkey’s Constitutional Court has decided, after an investigation, that 425,306 TL should be returned to the public treasury by the Republican People’s Party (CHP) due to irregular spending by the party. This irregular spending included the buying of such items as mobile phones and clothes, and the purchasing of legal services for the personal cases of party executives.

A meeting of the Directorate General of Religious Affairs (Diyanet) reiterated the importance of Ottoman Turkish being taught, and that there is a link between this and the protection of Islam. This came as a meeting of Turkey’s National Education Council over the weekend decided that Ottoman language classes will be compulsory for Imam-Hatip religious high schools and an elective course in general high schools.

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A new batch of 150 Peshmerga fighters have replaced the existing unit in Kobane, entering the scene through the Turkish border. The new fighters are said to possess the latest weapons and ammunition.

At an OSCE meeting in Basel, Switzerland, Turkish Foreign Minister Mevlut Cavusoglu has stated that Turkey does not recognise the de facto situation of Crimea, 13% of whose population is composed by the Turkic Crimean Tatars, and claimed that a solution must be found that respects the Ukraine’s independence and sovereignty.

At the same meeting, Turkish Foreign Minister Mevlut Cavusoglu has stated that Turkey has prevented over 7000 suspected foreign fighters from entering Turkey in order to make their way to Syria and Iraq. Cavusoglu further reiterated that preventing foreign fighters from reaching their destination is not the only way to solve the problem, and that a policy of rehabilitation and state-building must also be followed.

Portugal’s Secretary for European Affairs, Bruno Macaes, has stated that Portugal fully supports Turkey’s accession to the EU, especially taking into account its importance as a regional energy hub. He stated that he did not believe accession should in any way be tied to the Cyprus question, but warned that accession was indeed a slow process. He further said that Portugal would push for Turkey’s accession, but also that more chapters in the accession process should be opened so that the Turkish public sees that the EU cares about Turkish membership.

High level talks between Turkey and Greece, co-chaired by Turkish PM Ahmet Davutoglu and Greek PM Antonis Samaras, in Athens have led to a commitment by both sides to deepen bilateral relations across the board, and to intensify their efforts to restart the Cyprus reunification talks (suspended since October by Greek Cyprus due to the presence of a Turkish vessel carrying out surveys in the island’s disputed economic zone). Davutoglu also asked Greece openly for it to spearhead efforts for Turkey’s accession to the EU, something which Greece is actively supporting.

British PM David Cameron visited Turkey on Tuesday for talks to further deepen the bilateral relations between the two countries. Cameron is said to have asked Turkey to provide further alliance in the fight against ISIS.

Frederica Mogherini, the EU’s foreign policy chief, has met Turkish leaders on 9th December to primarily discuss the war on ISIS, but also Turkey’s accession to the EU. Mogherini is also set to visit a refugee camp in the south of the country. The EU has stated that a visit so early on in the commission’s mandate shows the importance that the EU places on EU-Turkey relations.

President Putin has offered to replace the South Stream gas pipeline project, the cancellation of which he announced during his visit to Turkey, with a new pipeline that will go through the north of Turkey. This proposal has been accompanied by a 6% cut in gas prices.

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The way developing and developed economies were dissociated 10 years ago seems to be reversing. It is the time for developed economies to record relatively higher growth rates than we get used to, perhaps partially due to persistent low interest rates in the UK and the US, and central banks of developed economies comfort in keeping them as such. High levels of inflation and depreciation of local currencies demand tight monetary policy, including but not limited to increases in interest rates. The central bank of Brazil, with all these in mind, increased its benchmark interest rate further by 50bps to 11.75% due to high inflation. The Central Bank of the Republic of Turkey (CBRT), however, were resistant in changing interest rates upwards despite high inflation for a sustained period of time since the initial hike in the beginning of the year. The Bank kept, and even strengthened, its view on a decrease in inflation especially after the tumble in oil prices. The interest rates in other developing economies matter for Turkey, as higher interest rates are more attractive to international funds and Turkey needs external financing of its current account deficit.

Meanwhile, the headline consumer and producer inflation in Turkey, saw improvements in November due to falling oil prices. However, the decrease in the core inflation (which can broadly be defined as inflation without energy and food prices, whose prices cannot be managed by the CBRT) that was seen in the last few months seems to have halted. However, despite a slower increase in transportation prices in November, headline inflation still increased to 9.15% on annual basis.

Besides inflation, industrial production data was also confusing. On the one hand, purchasing managers index (PMI) increased 0.7 points to 52.2 and peaked to the highest since past four months in November. The index measures private sector activity, looking at the indexes including but not limited to new orders, new export orders, output, new staff hires, input and output prices. Any figure above 50 indicates expansion of business activity. On the other, however, industrial production decreased 1.8% compared to the previous month and increased ony 2.4% compared to the same month last year. Both figures were lower than expected. The conclusion might be that production is slowing and yet managers have better view for future and increasing their stocks. Industrial production figures are closely related to growth figures, which have been released for the third quarter.

Turkey’s economy grew 1.7% on an annual basis in the third quarter of 2014, making the average growth in this year’s first nine months 2.9%.

These developments could have been mitigated by a confidence support from Moody’s on last Friday, 05th December as the international credit rating agency was set to announce credit rating and the outlook for Turkey. However, Moody’s skipped it again. The previous announcement on 8th August was also skipped. Last announcement from Moody’s came on 11th April and the agency confirmed Turkey’s rate as Baa3 and downgraded her outlook to negative. What to watch for this week then? This week, after GDP growth announcements, balance of payment statistic will be announced on 11th December.

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Photo credit: www.aljazeera.com.tr

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