Tag Archives: Turkey

Syrian and Russian warplanes pound Idlib before talks: monitor

Jan Egeland (L), Special Advisor to the United Nations Special Envoy for Syria, and Staffan de Mistura, U.N. Syria Envoy, attend a news conference at the U.N. in Geneva, Switzerland September 4, 2018. REUTERS/Denis Balibouse

By Angus McDowall and Tulay Karadeniz

BEIRUT/ANKARA (Reuters) – Russian and Syrian jets hammered a major rebel stronghold on Tuesday, a war monitor said, days before leaders of Russia, Iran and Turkey meet to discuss an expected Syrian government offensive that could spark a humanitarian disaster.

The warplanes bombarded countryside around Jisr al-Shughour on the western edge of the rebel enclave of Idlib after weeks of lull, killing 13 civilians but no fighters, according to the Syrian Observatory for Human Rights and a rebel source.

For President Bashar al-Assad, the defeat of rebels in the northwestern province would mean breaking the last major stronghold of active military opposition to his rule, though other large areas also remain beyond his control.

Since Russia’s entry into the war on his side in 2015, Assad and his other close allies, Iran and a group of regional Shi’ite militias it backs, have forced the rebels from a succession of bastions including Aleppo, Eastern Ghouta and Deraa.

A Syrian government minister said the siege of Idlib would probably be resolved by force. “Until now, military action is more likely than reconciliations,” Reconciliation Minister Ali Haidar told Russia’s Arabic-language Sputnik news agency.

Damascus uses the term “reconciliation” for the negotiated rebel surrenders that have taken place in some areas.

“Idlib is different from other regions because of the large numbers of fighters,” Haidar said. “However we cannot say there is no gateway to reconciliation.”

Half of Idlib’s 3 million people have already fled there from their homes in other parts of Syria, according to the United Nations, and any offensive there threatens new displacement and human misery.

It could also spark a wider confrontation with Turkey, a supporter of the rebels, whose army has set up observation posts along the Idlib front lines to deter fighting.

Turkey’s Hurriyet daily reported that Turkish armed forces were reinforcing the Idlib border with M60 tanks, and Reuters television filmed a convoy heading towards the border.

Tuesday’s air strikes came hours after U.S. President Donald Trump warned Assad and his allies not to “recklessly attack” Idlib, saying that hundreds of thousands might die.

“HUMAN SHIELDS”

The Kremlin on Tuesday dismissed his comments, describing Idlib, where jihadist insurgent factions dominate, as a “nest of terrorism”. Spokesman Dmitry Peskov added: “We know that Syria’s armed forces are preparing to resolve this problem.”

Iran echoed that theme. “Terrorist groups [in Idlib] have mixed with the people,” said Abbas Araqchi, deputy foreign minister, according to the Islamic Republic News Agency.

“They are using people as human shields.”

Idlib’s dominant rebel faction is Tahrir al-Sham, a jihadist alliance spearheaded by al Qaeda’s former official affiliate in Syria, the Nusra Front, though other insurgent groups are also present.

Last week the U.N. envoy to Syria, Staffan de Mistura, said the Nusra Front and al Qaeda, both of which the international body designates as terrorists, had an estimated 10,000 fighters in Idlib.

A top U.S. general estimated there were 20,000-30,000 militants in Idlib, but said if there were major military operations “we can expect humanitarian catastrophe”, and urged operations that mitigated the risks to civilians.

On Tuesday de Mistura said ongoing talks between Russia and Turkey held the key to resolving the fate of Idlib without a bloodbath. He said he had heard reports that Damascus had set a Sept. 10 deadline for diplomacy to work before attacking.

Turkey fears a major assault on Idlib could send a new wave of refugees towards its border, and wants to maintain a “de-escalation agreement” that it struck with Russia and Iran last year.

It has staged two major incursions into Syria, creating a buffer zone along its border in an area north of Aleppo that adjoins Idlib, where it has set up a local administration alongside Syrian rebel groups.

Foreign Minister Mevlut Cavusoglu said Turkey was discussing joint action with Russia to target terrorist groups in Idlib while avoiding a full-scale offensive. Ankara last week added Tahrir al-Sham to its list of designated terrorist groups.

GRAPHIC: Syrian army prepares assault on Idlib – https://tmsnrt.rs/2NHAqh3

PRETEXT FOR ATTACK?

“We went to Moscow with our defense minister and intelligence chief. Now talks are ongoing between our soldiers, intelligence agencies and foreign ministries about what kind of steps could be taken,” he said in Ankara late on Monday.

Ankara has said the presence of radical groups in Idlib is being used a pretext for a military operation. When he was in Russia in late August, Cavusoglu said “we have to differentiate terrorists from other people”, but added that it was also important to eliminate Russia’s concerns.

Iran’s Foreign Minister Mohammad Javad Zarif, on a visit to Syria, told Iranian state television: “Our efforts are for … the exit of terrorists from Idlib to be carried out with the least human cost.”

He and Peskov said Idlib would be a major subject of discussion at the Sept. 7 summit meeting between Russia’s Vladimir Putin, Turkey’s Tayyip Erdogan and Iran’s Hassan Rouhani.

Tuesday’s strikes come after three weeks without Russian air raids in Idlib, though the Syrian military has kept up shelling and some aerial bombardment.

Last week a source close to Damascus said the government was preparing a phased assault that would initially target the areas in the south and west of the rebel enclave. That would bring Assad close to reclaiming the major strategic prize in the region, two arterial highways running to Aleppo.

Even a staggered offensive like that would involve fighting around Turkish observation posts, potentially triggering a new escalation in an already complex war.

State news agency SANA said Syrian air defenses brought down Israeli rockets on Tuesday.

“Air defenses downed a number of rockets fired by the Israeli enemy in the Wadi al-Uyoun area in the Hama countryside,” it said.

(Reporting by Angus McDowall and Lisa Barrington in Beirut, Tulay Karadeniz in Ankara, Babak Dehghanpisheh and Tom Miles in Geneva, Tom Balmforth in Moscow, Phil Stewart in Athens and Suleiman al-Khalidi in Amman; writing by Angus McDowall; editing by Andrew Roche)

Germany urges Russia to help prevent humanitarian crisis in Syria

German Chancellor Angela Merkel addresses a news conference at the presidential villa in Abuja, Nigeria, August 31, 2018. REUTERS/Afolabi Sotunde

BERLIN (Reuters) – German Chancellor Angela Merkel expects the Kremlin to use its influence with the Syrian government to prevent a humanitarian disaster in the rebel-held northern region of Idlib, a government spokeswoman said on Friday.

Merkel has raised the issue in recent days with both U.S. President Donald Trump and Russian President Vladimir Putin, and the German government is watching developments in the region with growing concern.

“We expect … Russia to prevent the Syrian government from escalating the situation and thereby prevent a humanitarian catastrophe,” Merkel’s spokeswoman Ulrike Demmer told a regular government news conference.

She said it was imperative that humanitarian organizations be given unfettered access to the affected civilian population.

Syrian Foreign Minister Walid al-Moualem said on Thursday government forces will “go all the way” in a planned offensive in Idlib, the last major insurgent bastion in Syria, and that Damascus’s main targets were Islamist al-Nusra militants.

But he said Syria would not use chemical weapons in any offensive and that it did not have such arsenal. Syria would try to avoid civilian deaths, Moualem added.

Russia, meanwhile, has said it will begin a major naval exercise in the Mediterranean on Saturday, a move that appeared to be aimed at deterring Western forces from carrying out strikes on Syrian government forces.

The United Nations has called on Russia, Iran and Turkey to delay a battle that could affect millions of civilians, calling for humanitarian corridors to evacuate civilians.

Putin will attend a three-way summit in Tehran on Sept. 7 with the leaders of Turkey and Iran, his spokesman said.

(Reporting by Andrea Shalal; Editing by Mark Heinrich)

U.N. fears chemical weapons in Syria battle with ‘10,000 terrorists’

FILE PHOTO:A general view taken with a drone shows part of the rebel-held Idlib city, Syria June 8, 2017. REUTERS/Ammar Abdullah/File Photo

GENEVA (Reuters) – The United Nations called on Russia, Iran, and Turkey on Thursday to forestall a battle in Syria’s Idlib province which would affect millions of civilians and could see both militants and the government potentially using chlorine as a chemical weapon.

U.N. Syria envoy Staffan de Mistura said there was a high concentration of foreign fighters in Idlib, including an estimated 10,000 fighters designated by the U.N. as terrorists, who he said belonged to the al-Nusra Front and al Qaeda.

There could be no justification to use heavy weapons against them in densely populated areas, he said. Miscalculations could lead to unintended consequences, including the possible use of chemical weapons.

“Avoiding the potential use of chemical weapons is indeed crucial,” de Mistura told reporters in Geneva.

“We all are aware that both the government and al-Nusra have the capability to produce weaponized chlorine.”

Syrian Foreign Minister Walid al-Moualem, speaking during a meeting with his Russian counterpart Sergei Lavrov in Moscow on Thursday, said: “We are at the final stage of solving the crisis in Syria and liberating our whole territory from terrorism.”

“I assure you that we do not have chemical weapons and are not able to use them,” he added, according to Syrian state news agency SANA.

Idlib province is the last major rebel-held area in Syria, serving as what the U.N. has called a “dumping ground” for fighters and civilians evacuated from other battles. It is one of the areas that Russia, Iran, and Turkey agreed to “de-escalate” last year at a series of talks in the Kazakh capital Astana.

But a source said on Wednesday that Russia’s ally, Syrian President Bashar al-Assad, was preparing a phased offensive there.

Russian Foreign Minister Sergei Lavrov said on Wednesday that militants in Idlib had to be liquidated, describing them as “a festering abscess”.

“Why such a hurry, and not provide more time in order to allow more discussions, especially among the Astana guarantors?,” de Mistura said, referring to Russia, Iran, and Turkey.

The potential battlefield contains two crucial roads, transport arteries between major Syrian cities, which the Syrian government argues must be made safe. De Mistura asked if it was necessary to create a “worst-case scenario” just to secure Syrian government access to the roads.

It would be better to set up humanitarian corridors to evacuate civilians than rush into a battle which could prove to be a “perfect storm”, he said.

“The lives of 2.9 million people are at stake, and international mutually threatening messages and warnings and counter-warnings are taking place in the last few days.”

(Reporting by Tom Miles and Stephanie Nebehay; Editing by Alexandra Hudson)

Germany removes golden statue of Erdogan after protests

People stand near a statue of Turkish President Tayyip Erdogan during the art exhibition "Wiesbaden Biennale" in Wiesbaden, Germany, August 28, 2018. REUTERS/Ralph Orlowski

BERLIN (Reuters) – German firemen on Wednesday removed a golden statue of Turkish President Tayyip Erdogan on security grounds after it provoked an angry response from local people.

Organizers of an arts festival whose theme this year is “Bad News” had installed the four-meter statue of Erdogan, with one arm outstretched, on a plinth in the central Square of German Unity in the western town of Wiesbaden on Monday.

But the statue got daubed with graffiti, including the slogan “Turkish Hitler”, German media reported, and a few hundred residents had protested against it.

Police said they could no longer guarantee people’s safety so firemen used a large crane to take away the statue under the cover of darkness in the early hours of Wednesday.

Some three million people with Turkish roots live in Germany and Erdogan, who in June won re-election with expanded powers, is due to make a state visit to Berlin on September 28-29 as part of efforts to improve relations strained by years of disagreement on a range of issues.

Germany condemned Turkey’s arrest of some 50,000 people and the suspension or firing of 150,000 others including teachers, judges and soldiers, after a failed coup against Erdogan in 2016. Berlin says the crackdown was excessive and harmed basic freedoms. Ankara says it acted to safeguard national security.

“It is certainly appropriate to conceive of Erdogan as a controversial figure, and one that we are allowed to discuss freely here in this country,” the director of the biennial festival, Uwe Eric Laufenberg, told Reuters when the statue was erected on Monday.

“We can have a discussion about this statue and this man.”

While some residents liked the statue, others objected.

“This is a man who has hundreds of people on his conscience… because he has lied and bought his way to power. He’s a dictator,” said resident Werner Starotsta.

(Reporting by Reuters TV; Writing by Madeline Chambers; Editing by Gareth Jones)

Turkey blocks decades-old mothers’ vigil as freedoms suffer

Emine Ocak, (R) mother of Hasan Ocak who went missing in 1995 and a member of "Saturday Mothers", talks with her friend before an interview with Reuters in Istanbul, Turkey, August 27, 2018. Picture taken August 27, 2018. REUTERS/Osman Orsal

By Humeyra Pamuk and Daren Butler

ISTANBUL (Reuters) – Every Saturday for 23 years, dozens of people have held a vigil in a central Istanbul square, sitting in silence and holding pictures of relatives who went missing in police detention.

The group was about to stage their 700th demonstration last Saturday when Turkish police told them their protest was banned, before firing tear gas and plastic pellets to disperse the crowd and detaining dozens – including a 82 year-old woman who was among the first to protest in 1995 in search of her son.

The sit-in by the so-called Saturday Mothers was one of the few remaining public protests near Istanbul’s Taksim square, once a vibrant demonstration ground but now off-limits for opposition groups.

Critics say that breaking up the vigil was another sign that NATO member Turkey is drifting into more authoritarian rule under President Tayyip Erdogan, adding to Ankara’s already deteriorating record on human rights and media freedoms.

Casting the protest as a cover for supporting terrorism, Interior Minister Suleyman Soylu said the Saturday Mothers were linked to the outlawed Kurdistan Workers Party (PKK) and hinted the vigils would no longer be allowed.

“This has been one of Turkey’s oldest civil disobedience movements,” said Ahmet Sik, former journalist and a lawmaker for the pro-Kurdish Peoples’ Democratic Party (HDP), who was at Saturday’s protest.

“There was a time when the police helped these people to do their vigil. To criminalize such an established protest now is an attempt to intimidate the rest of the public,” he said.

Turkey in July lifted a two year-long state of emergency during which 150,000 civil servants were purged and 77,000 people suspected of links to a failed coup in 2016 were charged.

But opponents say Erdogan’s new executive presidency and a counter-terrorism law passed last month equips him with sweeping powers to stifle opposition.

Soylu said on Monday that authorities blocked the sit-in because participants were “trying to create victims through motherhood and mask terrorism through that victimization.”

At a news conference in Istanbul, the group denied links to any militant group and pointed out Erdogan, when he was prime minister in 2011, met them and pledged support.

They also vowed to continue their protest.

“Nobody is using us. Nobody has made us come here,” said Hanife Yildiz, whose son Murat went missing in police detention in 1995.

“I handed over my son to the state and I haven’t gotten him back since.”

‘REPEAT OF THE 1990s’

The silent vigils of Saturday Mothers began as a protest against what they say was the disappearance of relatives in police detention and extrajudicial killings in the 1990s.

At the time, when conflict with the Kurdistan Workers Party (PKK) was at its height, such disappearances and killings were common, mostly in Turkey’s mainly Kurdish southeast.

Emine Ocak, who was briefly detained on Saturday, was among those at the first sit-in after her son Hasan Ocak went missing following clashes with police in Istanbul in 1995.

Soylu rejected that Ocak had gone missing in detention and said he was a member of an ultra-leftist terrorist organization and that he was killed after a row within the group but the Saturday Mothers were trying to put the blame on the state.

Emine Ocak’s picture – the image of a white-haired elderly woman shouting as she was taken by riot police – went viral across Twitter. Her son Huseyin, Hasan’s brother, told Reuters police intervention was unexpected.

“There seems to be a new security approach in the state that very much resembles the one in the 1990s,” Huseyin Ocak said.

“I was there at the meeting with Erdogan on Feb 5, 2011. He said, ‘your problem is my cabinet’s problem.” He also promised to find our relatives, he added.

State investigations have shed light on some of the cases pursued by the Saturday Mothers. A 2011 parliament report found that Cemil Kirbayir, who went missing during a 1980 coup, died under torture.

“Since 1995 we have continued our rightful and silent resistance,” Cemil’s brother Mikail said. “You will not be able to remove us from that square.”

(Editing by Dominic Evans and Alexandra Hudson)

Exclusive: U.S. disregard for Turkish legal process ‘unacceptable’ – Erdogan spokesman

FILE PHOTO: U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey July 25, 2018. Demiroren News Agency/DHA via REUTERS/File Photo

By Orhan Coskun

ANKARA (Reuters) – The spokesman for President Tayyip Erdogan on Wednesday slammed what he said was the United States’ disregard for Turkey’s legal process, adding Washington had made arbitrary comments and demands in the case of a detained pastor.

In a statement to Reuters, Ibrahim Kalin called on the United States to respect Turkey’s judicial independence, one of Ankara’s most pointed responses yet to criticism over its detention of evangelical Christian pastor Andrew Brunson.

“There is rule of law in Turkey and the Andrew Brunson case is a legal issue. There is an ongoing legal process related to this individual,” Kalin said.

“It goes without saying that we find unacceptable the disregard of the legal process by the United States, which has been making certain demands.”

His comments came after President Donald Trump’s national security adviser John Bolton earlier told Reuters that Turkey made a “big mistake” in not releasing Brunson.

Brunson, who has lived in Turkey for two decades, has been detained for 21 months on terrorism charges, which he denies, and is now under house arrest.

Trump, who counts evangelical Christians among his core supporters, has become a vocal champion of the pastor’s case, making him an unwitting flashpoint in the tension between two NATO allies.

“Every day that goes by that mistake continues, this crisis could be over instantly if they did the right thing as a NATO ally, part of the West, and release (him) … without condition,” Bolton said.

Kalin, dismissed those statement as “arbitrary” comments and demands. He also hit back against the United States over an investigation into state-owned lender Halkbank for potential Iran-sanctions busting.

Turkey wants the U.S. Treasury to halt the investigation. Halkbank has said all of its transactions were legal. A U.S. court this year sentenced one of its executives to 32 months in prison for involvement in a scheme to avoid Iran sanctions.

“It is unacceptable that certain baseless and false allegations are made against Halkbank to weaken this public bank,” Kalin said.

“It seems that the purpose of those steps is to discredit respectable institutions and persons, and to punish them unjustly rather than discover the truth.”

(Reporting by Orhan Coskun; Writing by David Dolan; Editing by James Dalgleish)

Exclusive: Trump vows ‘no concessions’ with Turkey over detained U.S. pastor

U.S. President Donald Trump reacts to a question during an interview with Reuters in the Oval Office of the White House in Washington, U.S. August 20, 2018. REUTERS/Leah Millis

By Steve Holland, Jeff Mason and James Oliphant

WASHINGTON (Reuters) – U.S. President Donald Trump on Monday ruled out agreeing to any demands from Turkey to gain the release of a detained American pastor and said he was not concerned that his tough stance could end up hurting European and emerging market economies.

In a wide-ranging Oval Office interview with Reuters, Trump complained about interest rate hikes by the Federal Reserve and suggested he was having second thoughts about Jerome Powell, his choice for Fed chair. He also said he “most likely” will have a second meeting with North Korean leader Kim Jong Un and indicated he would consider lifting U.S. sanctions on Russia if Moscow took some actions in return.

Trump said he thought he had a deal with Turkish President Tayyip Erdogan when he helped persuade Israel to free a detained Turkish citizen. He had thought Erdogan would then release pastor Andrew Brunson, who denies Turkey’s allegations that he was involved in a plot against Erdogan two years ago.

“I think it’s very sad what Turkey is doing. I think they’re making a terrible mistake. There will be no concessions,” he said.

Turkey has demanded that the United States hand over Fethullah Gulen, a Turkish cleric in the United States suspected in the coup plot against Erdogan, but the United States has balked at this.

Trump has imposed tariffs on imports of Turkish steel and aluminum in response to Erdogan’s refusal to free Brunson, raising concerns of economic damage in Europe and in emerging market economies.

“I’m not concerned at all. I’m not concerned. This is the proper thing to do,” he said, when asked about the potential damage to other economies.

Trump said Erdogan had wanted the Turkish citizen returned from Israel.

Trump and Erdogan met in Brussels for a NATO summit in mid-July where they discussed Brunson’s case and what could be the way forward to release the pastor, a senior White House official said earlier.

Turkey had sought U.S. help to persuade the Israelis to release a Turkish woman who was being held in Israel, the senior official said. In exchange, Turkey would release Brunson and other Americans being held in Turkey.

Trump said he kept his side of the bargain.

“I got that person out for him. I expect him to let this very innocent and wonderful man and great father and great Christian out of Turkey,” Trump said.

The dispute threatens to intensify a split between the United States and Turkey, a key NATO ally that plans to buy Russian missiles.

Israel, which confirmed that Trump had requested Ebru Ozkan’s release, deported her on July 15. Ankara has denied ever agreeing to free Brunson in return.

Trump added: “I like Turkey. I like the people of Turkey very much. Until now I had a very good relationship as you know with the president. I got along with him great. I had a very good relationship. But it can’t be a one-way street. It’s no longer a one-way street for the United States.”

PUTIN, TRUMP MEETING

Trump drew a barrage of criticism at home and abroad after he stood side by side with Russian President Vladimir Putin at a July 16 summit in Helsinki and cast doubt on his own intelligence agencies’ findings that Russia meddled in the 2016 U.S. elections.

In the Reuters interview, he ticked off areas that he discussed privately with Putin, including security for Israel, Syria and Russia’s annexation of Crimea and incursion into eastern Ukraine, and the Nord Stream 2 pipeline from Russia to Germany that will supply natural gas to Germany.

Trump said Putin did not raise with him the issue of U.S. sanctions on Russia but that he would consider lifting them if Russia took steps on such areas as Syria or Ukraine.

“I would consider it if they do something that would be good for us. But I wouldn’t consider it without that,” he said.

Turning to Iran, Trump showed little interest in meeting Iranian President Hassan Rouhani to discuss the dispute over Iran’s nuclear program after earlier this month expressing a willingness to do so.

The Iranians, including Supreme Leader Ali Khamenei, have dismissed the offer. Trump said it did not matter to him whether he met Iran’s leaders and that there had been no U.S. outreach toward Iran to discuss talks.

Trump’s withdrawal of the United States from the nuclear deal between Iran and world powers earlier this year has raised tensions between Washington and Tehran.

“If they want to meet that’s fine, and if they don’t want to meet, I couldn’t care less,” he said.

Trump cast doubt on whether he will meet Chinese President Xi Jinping during an international Asia-Pacific summit in Papua New Guinea in November. Trump again talked up the warmth of his relationship with Xi, but said little progress has been made on his drive to rebalance the U.S.-Chinese trade relationship.

“Maybe. I’m not sure that it’s been set up yet. We’ll see,” he said, when asked about a possible meeting with Xi.

He also said he had “no time frame” for resolving his administration’s trade dispute with China.

“I’m like them, I have a long horizon,” he said.

(Reporting by Steve Holland, Jeff Mason and James Oliphant in Washington; Additional reporting by Matt Spetalnick; Editing by Ross Colvin and James Dalgleish)

U.S. official warns of more actions against Turkey if pastor not freed

FILE PHOTO: U.S. pastor Andrew Brunson reacts as he arrives at his home after being released from the prison in Izmir, Turkey July 25, 2018. Picture taken July 25, 2018. Demiroren News Agency/DHA via REUTERS/File photo

By Steve Holland

WASHINGTON (Reuters) – The United States is warning more economic pressures may be in store for Turkey if it refuses to release a jailed American pastor, a White House official said on Tuesday, in a dispute that has further strained relations between the NATO allies.

The tough message emerged a day after White House national security adviser John Bolton met privately with Turkish ambassador Serdar Kilic about the case of evangelical pastor Andrew Brunson. Bolton warned him that the United States would not give any ground, a senior U.S. official said.

The White House official, speaking to Reuters on condition of anonymity, said “nothing has progressed” thus far on the Brunson case.

“The administration is going to stay extremely firm on this. The president is 100 percent committed to bringing Pastor Brunson home and if we do not see actions in the next few days or a week there could be further actions taken,” the official said.

Further actions would likely take the form of economic sanctions, the official said, who added: “The pressure is going to keep up if we’re not seeing results.”

Relations between Turkey and the United States have been soured by Brunson’s detention, as well as diverging interests on Syria. Trump doubled tariffs on imports of Turkish steel and aluminum last week, contributing to a precipitous fall in the lira.

The United States is also considering a fine against Turkey’s state-owned Halkbank for allegedly helping Iran evade U.S. sanctions. Earlier this month, the United States imposed sanctions on two top officials in President Recep Tayyip Erdogan’s cabinet in an attempt to get Turkey to turn over Brunson.

Brunson is accused of backing a coup attempt against Turkish Erdogan two years ago, charges that he has denied. He is being tried on terrorism charges.

Brunson has appealed again to a Turkish court to release him from house arrest and lift his travel ban, his lawyer told Reuters on Tuesday.

(Reporting by Steve Holland; Editing by Mary Milliken and James Dalgleish)

Erdogan vows action against ‘economic terrorists’ over lira plunge

Turkey's President Tayyip Erdogan addresses Turkish Ambassadors during a meeting in Ankara, Turkey August 13, 2018. Kayhan Ozer/Presidential Palace/Handout via REUTERS

By Tuvan Gumrukcu

ANKARA (Reuters) – President Tayyip Erdogan on Monday accused “economic terrorists” of plotting to harm Turkey by spreading false reports and said they would face the full force of the law, as authorities launched investigations of those suspected of involvement.

The lira currency, which has lost more than 40 percent against the U.S. dollar this year, pulled back from a record low of 7.24 earlier on Monday after the central bank pledged to provide liquidity, but it remained under selling pressure and its meltdown continued to rattle global markets.

“There are economic terrorists on social media,” Erdogan told a gathering of Turkish ambassadors at the presidential palace in Ankara, adding that the judiciary and financial authorities were taking action in response.

“They are truly a network of treason,” he added. “We will not give them the time of day… We will make those spreading speculations pay the necessary price”.

Erdogan, who gained sweeping new powers following his re-election in June, said rumors had been spread that authorities might impose capital controls in response to the slump in the currency, which tumbled as much as 18 percent on Friday alone.

The interior ministry said it had so far identified 346 social media accounts carrying posts about the exchange rate that it said created a negative perception of the economy. It said it would take legal measures against them but did not say what these would be.

Separately, the Istanbul and Ankara prosecutor’s offices launched investigations into individuals suspected of being involved in actions that threaten Turkey’s economic security, broadcaster CNN Turk and state news agency Anadolu reported.

Turkey’s Capital Markets Board (SPK) and financial crime board have also said they would take legal steps against those who spread misinformation about financial institutions and firms, or reports that the government would seize foreign-currency deposits.

Earlier on Monday, Finance Minister Berat Albayrak, who is also Erdogan’s son-in-law, said Turkey would start rolling out an economic action plan on Monday.

Albayrak stressed the importance of budget discipline and ruled out any seizure or conversion of dollar-denominated bank deposits into lira.

Economists say the lira’s fall is due to worries about Erdogan’s influence over the economy, his repeated calls for lower interest rates, and worsening ties with the United States over the detention of a Christian pastor and other disputes.

Erdogan reiterated on Monday his view that the currency’s crash had no economic basis, saying that U.S. sanctions imposed on Turkey over the terrorism trial of the pastor, Andrew Brunson, represented a “stab in the back” by a NATO ally.

The lira stood at 6.89 against the U.S. dollar at 1511 GMT – after Erdogan’s comments – up from a record low of 7.24 to the dollar reached in early Monday trade.

(Additional reporting by Ali Kucukgocmen; Editing by Dominic Evans and Gareth Jones)

Erdogan tells Turks to buy free-falling lira as Trump doubles metals tariffs

FILE PHOTO: A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer/File Photo

By Behiye Selin Taner and Tuvan Gumrukcu

ISTANBUL/ANKARA (Reuters) – President Tayyip Erdogan told Turks on Friday to exchange their gold and dollars into lira, with the country’s currency in free fall after President Donald Trump turned the screws on Ankara by doubling tariffs on metals imports.

The lira has long been falling on worries about Erdogan’s influence over monetary policy and worsening relations with the United States. That turned into a rout on Friday, with the lira diving more than 18 percent at one point, the biggest one-day drop since Turkey’s 2001 financial crisis.

It has also lost more than 40 percent this year, hitting a new record low after Trump took steps to punish Turkey in a wide-ranging dispute.

Trump said he had authorized higher tariffs on imports from Turkey, imposing duties of 20 percent on aluminum and 50 percent on steel. The lira, he noted on Twitter, “slides rapidly downward against our very strong Dollar!”

“Our relations with Turkey are not good at this time!” he said in an early morning post.

Those duties are double the level that Trump imposed in March on steel and aluminum imports from a range of countries.

The White House said he had authorized the move under Section 232 of U.S. trade law, which allows for tariffs on national security grounds.

While Turkey and the United States are at odds over a host of issues, the most pressing disagreement has been over the detention of U.S. citizens in Turkey, notably Christian pastor Andrew Brunson who is on trial on terrorism charges. A delegation of Turkish officials held talks with counterparts in Washington this week but there was no breakthrough.

Waves from the crisis spread abroad, with investors selling off shares in European banks which have large exposure to the Turkish economy.

The lira sell-off has deepened concern particularly about whether over-indebted companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Erdogan.

Erdogan’s characteristic defiance in the face of the crisis has further unnerved investors. The president, who says a shadowy “interest rate lobby” and Western credit ratings agencies are attempting to bring down Turkey’s economy, appealed to Turks’ patriotism.

“If there is anyone who has dollars or gold under their pillows, they should go exchange it for lira at our banks. This is a national, domestic battle,” he told a crowd in the northeastern city of Bayburt. “This will be my people’s response to those who have waged an economic war against us.”

“The dollar cannot block our path. Don’t worry,” Erdogan assured the crowd.

“AMERICAN-MADE CRISIS”

Erdogan, elected in June to a new executive presidency, enjoys the support of many Turks even though food, rent, and fuel prices have all surged. “This crisis is created by America,” said Serap, a 23-year-old clerk at a clothes store in central Istanbul.

However, the Istanbul Chamber of Industry expressed its concern about the lira while some economists were less impressed by the government’s handling of the crisis.

“The basic reason the exchange rate has gone off the rails is that confidence in the management of the economy has disappeared both domestically and abroad,” said Seyfettin Gursel, a professor at Turkey’s Bahcesehir University.

“Confidence needs to be regained. It is obvious how it will be done: since the final decision-maker of all policies in the new regime is the president, the responsibility of regaining confidence is on his shoulders.”

Turkey’s sovereign dollar-denominated bonds tumbled with many issues trading at record lows. Hard currency debt issued by Turkish banks suffered similar falls.

Meanwhile, the cost of insuring exposure to Turkey’s sovereign debt through five-year credit defaults swaps has spiraled to the highest level since March 2009, topping levels seen for serial defaulter Greece, which has three bailouts in the last decade.

THE TWEET AND THE SWORD

New Finance Minister Berat Albayrak – Erdogan’s son-in-law – acknowledged that the central bank’s independence was critical for the economy, promising stronger budget discipline and a priority on structural reforms.

Presenting the government’s new economic model, he said the next steps of rebalancing would entail lowering the current account deficit and improving trust.

This did nothing to revive the currency. “The tweet is mightier than the Turkish sword,” Cristian Maggio, head of emerging markets strategy at TD Securities, said in a note to clients. “Albayrak’s plan was uninspiring at best.”

Erdogan, a self-described “enemy of interest rates”, wants cheap credit from banks to fuel growth, but investors fear the economy is overheating and could be set for a hard landing. His comments on interest rates — and his recent appointment of his son-in-law as finance minister — have heightened perceptions that the central bank is not independent.

The central bank raised interest rates to support the lira in an emergency move in May, but it did not tighten at its last meeting.

 

(Additional reporting by Karin Strohecker, Claire Milhench and Ritvik Carvalho, Lisa Lambert and Susan Heavey; Writing by Humeyra Pamuk and David Dolan; Editing by Dominic Evans, Catherine Evans and David Stamp)