Tag Archives: Turkey

The Real Reason Why US-Turkey Relations Have Hit an All-Time Low, by Jim Carey

This is an excellent survey and analysis of the US-Turkey relationship. From Jim Carey at theantimedia.com:

Over the past week, US-Turkey relations have hit an all-time low, but how did these two allies end up at odds with each other?

If you’ve been watching the news over the past week you may think the current hostility between Washington and Ankara is about the US pastor, Andrew Brunson. Brunson, who has been in police custody or under house arrest in Turkey since October 2016, has now apparently become a high priority for the Trump Regime.

But why did this take so long? Vice President Mike Pence has known about Brunson since day one of the administration thanks to his ties to the US evangelical community but neither he or the President have previously expressed this level of outrage. There have already been low key talks between Washington and Ankara in the past concerning the return of Brunson to the US, but what the Western media isn’t reporting now is how these talks to return a US national fit into the bigger geopolitical picture of US-Turkey relations.

Andrew Brunson and Fethullah Gulen: “A Pastor for a Pastor”

Behind the general request by the US to return Andrew Brunson is a several-year-long process involving several closed-door meetings about the pastor between US and Turkish officials. During all of these meetings, the US demand was the same as it is now, but they weren’t the only one who wanted something out of the negotiations.

You aren’t hearing much about Ankara’s demands right now but Turkish President Recep Erdogan has previously said he would be willing to return the US pastor in exchange for Turkey’s own expat “pastor,” Fethullah Gulen. Erdogan made this perfectly clear at a rally for Turkish police officers in March, saying that the trade should be a no-brainer since “the one that we have [in our hands – Brunson] is being tried, the one you have [in your hands – Gulen] is not being tried.”

Gulen is the exiled cleric and former-Erdogan ally alleged to be behind a failed coup in July 2016 with supposed US assistance. Turkey has been asking for the return of Gulen since before the dust even settled after the coup attempt but the US has so far refused to extradite the charter-school magnate and religious leader.

To continue reading: The Real Reason Why US-Turkey Relations Have Hit an All-Time Low

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Talk Cold Turkey, by Raúl Ilargi Meijer

Will Turkey turn to Russia and China as a way out of its financial problems? From Raúl Ilargi Meijer at theautomaticearth.com:

Recep Tayyip Erdogan became Prime Minister of Turkey in 2003. His AKP party had won a major election victory in 2002, but Erdogan was banned from political office until his predecessor Gül annulled the ban. Which he had gotten in 1997 for reciting an old poem to which he had added the lines “The mosques are our barracks, the domes our helmets, the minarets our bayonets and the faithful our soldiers….”

The Turkish courts of the time saw this as “an incitement to violence and religious or racial hatred..” and sentenced him to ten months in prison (of which he served four in 1999). The courts saw Erdogan as a threat to the secular Turkish state as defined by Kemal Ataturk, the founder of modern Turkey in the 1920’s. Erdogan is trying to both turn the nation towards Islam and at the same time not appearing to insult Ataturk.

The reality is that many Turks today lean towards a religion-based society, and no longer understand why Ataturk insisted on a secular(ist) state. Which he did after many years of wars and conflicts as a result of religious -and other- struggles. Seeing how Turkey lies in the middle between Christian Europe and the Muslim world, it is not difficult to fathom why the ‘father’ of the country saw secularism as the best if not only option. But that was 90 years ago.

And it doesn’t serve Erdogan’s purposes. If he can appeal to the ‘silent’ religious crowd and gather their support, he has the power. To wit. In 2003, one of his first acts as prime minister was to have Turkey enter George W.’s coalition of the willing to invade Saddam Hussein’s Iraq. As a reward for that, negotiations for Turkey to join the EU started. These are officially still happening, but unofficially they’re dead.

In 2014 Erdogan finally got his dream job: president. Ironically, in order to get the job, Erdogan depended heavily on the movement of scholar and imam Fethullah Gülen, who, despite moving to Pennsylvania in 1999, still had (has?) considerable influence in Turkish society. Two years after becoming president, Erdogan accused Gülen of being the mastermind behind a ‘failed coup’ in 2016, after which tens of thousands of alleged Gülenists were arrested, fired, etc.

To continue reading: Talk Cold Turkey

Trump’s Turkey Tariffs Are Retaliation For A Major Military Escalation, by Duane Norman

Trump’s tariffs on Turkey may be about a lot more than the American pastor being held by Turkey. From Duane Norman at fmshooter.com:

The Trump administration recently levied additional tariffs against Turkey, with Trump himself tweeting about how “Our relations with Turkey are not good at this time!”:

The Wall Street Journal was just one among many mainstream media voices that suggested the tariffs are retaliation for Turkey’s refusal to release US Pastor Andrew Brunson…

During high-level talks in Washington, U.S. and Turkish officials were unable to produce a breakthrough in an impasse that has pushed Turkey’s economy into turmoil, the officials said. Turkey’s currency has plunged amid the crisis amid fears that the U.S. could take tougher steps before the standoff is resolved.

The Trump administration is now positioned to impose new penalties on Turkey for refusing to free Andrew Brunson, an evangelical North Carolina pastor who was detained in Turkey as part of a sweeping crackdown after a failed July 2016 coup.

…but a much more plausible reason for the tariffs is due to Turkish threats to raid Incirlik Air Base, the major US air base in Turkey:

The 60-page criminal complaint also calls for Turkish officials to shut down U.S. military flights from Incirlik, a portion of which the U.S. Air Force has sole control over, and execute a search warrant at the facility to look for additional evidence. So far, the Turkish government does not appear to have acted on any of the charges.

The complaint specifically calls for the arrest of 11 individuals, but it’s not clear if any of them are still assigned to Incirlik. The first two are U.S. Air Force Colonels John Walker and Michael Manion, who were, respectively, the commander and vice commander of the 39th Air Base Wing at Incirlik in 2016.

Incirlik is of pivotal importance to US military interests, and not just for its role in basing/launching aircraft involved in Syria and all across the middle east – the base also houses “as many as” 50 B-61 nuclear bombs:

According to open-source estimates, the United States may store as many as 50 B61 gravity bombs at Incirlik. Those make up one-third of the approximately 150 nuclear weapons thought to be housed in five nations in Europe as part of NATO’s nuclear sharing arrangements.

A USAF F-16 testing the latest B61-12 variable-yield thermonuclear bomb

To continue reading: Trump’s Turkey Tariffs Are Retaliation For A Major Military Escalation

Lira Collapse To Jump the Mediterranean, by Tom Luongo

A number of European banks, some of which are not in such great shape, hold significant Turkish debt, which means they would be hurt if Turkey runs into funding and debt repayment problems. Their pain could spread. From Tom Luongo at tomluongo.me.com:

The Turkish Lira crisis is fundamentally different than the Russian Ruble crisis of 2014/15.  This one has contagion risk.

Back then no one was worried about the fall of the ruble having spillover effect.  If Sberbank failed, it wouldn’t jump to Europe.  Then again, there was little worry about that since the Russians had more than enough in reserves to cover the debts.

With Turkey, however, there is a real worry about this jumping into Europe. From Zerohedge:

Friday’s fall came after the Financial Times reported that supervisors at the European Central Bank are concerned about exposure of some of Europe’s biggest lenders to Turkey, including chiefly BBVA, UniCredit and BNP Paribas. The FT reported that along with the currency’s decline, the ECB’s Single Supervisory Mechanism has begun to look more closely at European lenders’ links with Turkey. The moves also came after the US showed no signs of lifting crippling sanctions despite the visit of a Turkish delegation to the US capital.

According to the FT, the ECB is concerned about the risk that Turkish borrowers might not be hedged against the lira’s weakness and begin to default on foreign currency loans, which make up about 40% of the Turkish banking sector’s assets.

And while it does not yet view the situation as critical, it sees Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas, which all have significant operations in Turkey, as particularly exposed, according to two people familiar with the matter.

Note the banks here.  Italian zombie-bank UniCredit.  Spain’s BBVa and France’s major zombie-bank BNP Paribas.   You can almost smell the desperation in the Financial Times’ reporting on this.

To continue reading: Lira Collapse To Jump the Mediterranean

Turkey is Getting off the U.S. Reservation, by Tom Luongo

Turkey has one foot in Europe and one in Asia, and it plays every geoppolitical end against the middle. From Tom Luongo at tomluongo.me:

This year’s BRICS Summit was a big show.  No question.  The main event was provided by Turkish President cum Dictator Recep Tayyip Erdogan.

Erdogan wants to a a “T” to the acronym, making them the BRICTS.

Erdogan also made it very clear Turkey’s shift away from the West will proceed faster if the bullying and marginalization continue.  For months now, Turkey has struggled with a crashing Lira and sovereign bond market.

The poster child for the unfolding sovereign debt crisis.

The Trump Administration knows that Turkey is slipping from its grasp.  Do you ever wonder why certain countries’ currencies get trashed when others with worse balance sheets or balance of trade don’t?

You should.  Because asking that simple question will lead you to asking “Why X?  Why Now?”

And in Turkey’s case it is for many reasons:

  1. Turkey was key in assisting Iran resist pre-JCPOA sanctions by laundering Iranian oil sales in physical gold through Turkish banks.
  2. Turkey is highly dependent on foreign energy imports and is one of Iran’s largest customers.
  3. To alleviate this foreign-energy dependence Turkey, through Russia, are building nuclear power plants and the Turkish Stream pipeline.
    1. Turkish Stream will provide Russian Gas from Gazprom at an effective discount since most of its capacity is targeted for European destinations and Turkey will likely get transit fees for that gas offsetting some of the costs of the gas they buy from Gazprom.
  4. Turkey refuses to comply with Trump’s edict to not buy Iranian oil in November.
  5. Turkey is buying S-400 missile defense systems from Russia
  6. The U.S. blocked the sale of F-35s to Turkey as a retaliatory measure.  Given the F-35’s cost/benefit ratio, I’d say Turkey wins on that front as well.
  7. Turkey’s occupation of Northern Syria was a blocking move to keep the U.S. from moving West to Afrin and uniting the Kurdish cantons.

I could go on, you get the point.

To continue reading: Turkey is Getting off the U.S. Reservation

US Message To Assad: “We Will Pull Out Of Syria If Iran Withdraws”, by Tyler Durden

Are the stars moving into alignment for foreign powers to move out of Syria? From Tyler Durden at zerohedge.com:

As Presidents Trump and Putin are set to meet Monday in Helsinki, efforts toward winding down the proxy war in Syria will no doubt be high on the agenda.

We explained previously that the diplomatic cards for ending the war seem to have fallen into place as just days before the historic summit Netanyahu said in a stunning turnaround for Israeli policy fresh off his own visit with Putin in Moscow that “Israel does not object to President Bashar al-Assad’s regaining control over all of Syria” so long as Iranian forces are pushed back from the Israeli border, according to the New York Times.

And now according to a new bombshell report, US military commanders have conveyed to Syrian President Assad via Russian mediation that “we will pull out of al-Tanf and the North if Iran withdraws from Syria.”

Middle East based chief international war correspondent for Al Rai Media, Elijah Magnier, is currently on the ground in Syria and has interviewed multiple high level officials involved.

Below is his dispatch on the back-channel “military to military” exchange that recently took place between US, Russian, and Syrian forces, including Assad’s response to the American offer of a potential deal.

* * *

A top decision maker in Syria has said “the US has sent a message to the Syrian president Bashar al-Assad that expresses the US establishment’s wishes. Under these wishes there is an Israeli goal compatible with Donald Trump’s objective to pull out its own forces from Syria with as little damage as possible. Trump would like to avoid the same fate that hit the US forces during Georges Bush’s era where thousands of US soldiers were killed in action”.

According to the source involved in overseeing the entire military operation for the last years of war in Syria, “President Assad was very clear in his answer to the US establishment. Syria – said Assad – is determined to liberate the entire Syrian territory regardless of the consequences. There is of course a price to be paid to obtain the liberation of north Syria which is occupied by both the US and Turkey, neither of whom were invited by the Syrian government: this price is worth it”.

To continue reading: US Message To Assad: “We Will Pull Out Of Syria If Iran Withdraws”

As Erdogan Cements His Hold Over Turkey’s Economy, Global Investors Begin to Panic, by Don Quijones

There have always been rulers who thought they could stop basic economic forces. Turkey is ruled by just such a deluded clown. From Don Quijones at wolfstreet.com:

His Toxic Mix: destruction of the lira and a mountain of foreign-currency debt.

By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET.

Two big European banks, Italy’s Unicredit and Spain’s BBVA, will be following current events in Turkey extremely closely. The two lenders have the biggest exposure to the country, which is one of the world’s fastest growing emerging economies. But investing there is an increasingly risk business.

Turkey continues to grow at high speed, expanding by 7.4% last year. But that growth has been fueled by reckless public and private-sector borrowing, much of it at the insistence of Turkey’s strong-arm leader, Recep Tayyip Erdogan. Turkey’s overall stock of private sector debt has grown from 33% of GDP in 2007 to 70% today. Due to the long-collapsing lira, much of this debt is in foreign currencies. As of the end of April, Turkish private sector companies owed more than $245 billion in foreign-currency debt, or nearly one-third the size of the country’s overall economy.

There’s already growing pressure on Turkish banks to reorganize foreign-currency denominated corporate loans as companies struggle to service them. At least $6.1 billion of loans taken out by energy companies are being restructured or refinanced, Bloomberg reports. If this trend continues, it could trigger a wave of bankruptcies that could leave financial institutions and taxpayers staring at massive losses.

Turkey is one of the three most vulnerable large emerging markets at present, alongside Argentina and Ukraine, according to rating agency Fitch. For its part, The New York Times warned that “in a global economy increasingly plagued by worries — from an unfolding trade war to higher oil prices — Turkey may present the most immediate cause for alarm”:

The country’s president, Recep Tayyip Erdogan, who has dominated national life for 15 years, was sworn in again on Monday following a re-election victory that came with extraordinary new powers. He has wielded his influence to deliver relentless economic growth through unrestrained borrowing, lifting debt levels to alarming heights. And the additional authority he has been granted is expected to further test the limits of economic reality.

Before Erdogan’s reelection at the end of June BBVA’s chairman Francisco González told CNBC that he thought — or at least hoped — that whoever was elected president would do whatever was necessary to stabilize Turkey’s overheating economy. The exact opposite is happening.

To continue reading: As Erdogan Cements His Hold Over Turkey’s Economy, Global Investors Begin to Panic