The pound is falling, Erdogan’s successors are preparing

THE Recep Tayyip Erdogan It has not always been the adventurer of the world economy, the one waging a war in the markets and suing the international banks. He did not start out as an “unorthodox leader” who invents economic doctrines, plays with fire, and tries to adapt international rules to his measurements. On the contrary.

He started out as the favorite and predictable “son of the markets,” the face of Turkish modernization. When she assumed leadership Of Turkey, after the country appealed to IMF, presented as a realistic cooperative “manager” who, despite the strong Islamic profile, understood the market economy and what it needs to provide investors with dollar income.

The first months of his rule were the man who, while flogging the country’s previous political staff at the IMF, was also the best executor of the memorandum: he presented the new Turkish pound “Erasing” six zeros from the previous one, which was no longer worth even printed paper.

It implemented the largest program of privatization of state companies and organizations and with revenues reduced the government debt by almost 1/3; in 2015, public debt as a percentage of GDP had fallen to 27.5%. At the same time, a pharaonic infrastructure program was launched, in cooperation with the private sector, to fill Turkey with roads, airports and projects that have changed its appearance.

Turkey’s private sector has taken over the inflow of borrowed capital: Erdogan has opened up the economy by facilitating international investment. He announced the country as the largest, most dynamic and safest economy in the Middle East, attracting capitalists in exchange for high returns that cheered foreign investors. Millions of poor Turks were also happy to move to the cities during the “modernization phase”, find work, obtain loans, and slowly build the Turkish version of the (small) middle class.

But Erdogan’s ultimate goal was not to modernize Turkey, but to promote himself as the new Ethnarch, a new Ataturk. It was forging personal worship and ensuring lifelong leadership. Economic power has whetted the appetite for political supremacy. The catalyst came with the onset of global destabilization and deglobalization that occurred after the elections. Triumph.

Investors are gone

Suddenly the world changed. Authoritarian leaders became fashionable. Alliances and geopolitical maneuvers have changed at a windsurfing pace, and haggling is good for former footballer Erdogan.

At the same time, the Turkish economy continued to give higher returns to foreign investors, being the favorite of international capital. The markets gave their tacit consent to Erdogan for the next phase of his personal plan.

The new international ecosystem was compatible with an overly ambitious leader. He quarreled and reconciled with Trump and Putin, raising its international profile, mainly within Turkey. She starred in the crises of the Islamic Caliphate Syria, the Refugee, gaining shares as a regional leader.

Internally, as sovereign, he obtained full control over private entrepreneurship in banks. But Its geopolitical ambitions and global turmoil changed the spirits of serious investors.. It was a time when his unorthodox policies seriously disturbed foreigners. His departure began to push the Turkish pound.

Therefore, Erdogan started using old tricks: burning the Central Bank’s foreign exchange reserves to back him up. When he finished, he began to force banks to lend him their own dollars and Turkish citizens to deposit gold from their chests. At the same time, the credit crisis began to open, creating the largest loan bubble in the country’s history.

Today the net foreign exchange reserves of the Central Bank are negative. Tourism will not bring enough dollars this year. None of the foreign investors will come, since the real interest rate in pounds is now negative: why spend money giving your dollars in pounds? Meanwhile, devaluation makes the mountain of private sector dollar debt increasingly difficult to repay. S&P estimates that 168 billion must be found in the next 12 months. Geopolitical tensions, in turn, are forcing the prospects for the Turkish currency.

The new umbrella

But Erdogan has a new plan. Since the state has scope to borrow, it will do so in order to invest money in the private economy. The state will help pay the corporate debt in exchange for shares and government control. The interest rate will be amazing, but for now you are not interested. The same man who owed the state plans to pay it. This strategy could give you an extension. The prerequisite is to avoid one the collapse of the pound, playing the cat game with the mouse in international markets.

This is the last phase of Erdogan’s dangerous game. Now he is begging the big central banks for “life insurance” in the form of an exchange currency, which will give him access to dollars. However, no one is willing to sell “life insurance” to someone who likes to sit on the edge of a cliff. Without it, however, the … sudden death of the “new Ataturk” aspirant could come at any moment.

Successors are preparing

With expansive movements on the external fronts The Turkish president is trying to balance negative impressions at home, but now it is clear that he is making the strategic mistake of over-extending himself. This, however, is a slow burning pump.

Although Recep Tayyip Erdogan still appears to be in power, there are indications that the political relationship in Turkey is gradually changing. It is precisely this diffuse impression that is driving the fight for succession, which has already begun and is predicted to be bloody. Also, the changing of the baton will not take place according to Western standards, with the ballot box showing winners and losers.

Connoisseurs of Turkish reality estimate that Erdogan is not going to retire, retiring to some of their luxury homes. As always, the end of his stormy political path is not expected to be easy.

A poll conducted by the Turkish pollster AREA in April shows the electoral impact of the ruling Justice and Development Party (AKP).AKR) to 35.8%. Erdogan’s government partner, the Nationalist Action Party (MIR), also fell 9.6%. This percentage does not allow your party Devlet Bahceli to enter the National Assembly, because the entry limit is 10%.

It should be remembered that Erdogan’s alliance with the “Gray Wolf” Bahceli is the one that gave the government the parliamentary majority. The next presidential and parliamentary elections are scheduled for 2023. However, all opposition parties want early elections and a return to the presidency. We remind you that Erdogan turned the state into a Presidential Republic.

But who are Erdogan’s would-be successors?

The “wolf” wants the Aegean

Second in popularity after Erdogan is Aksener Meral. The Good Party leader enjoys a response of 31.2%, although her party has a single-digit percentage. In an even more recent Metropoll survey, Erdogan is first with 52.1% and Aksener with 40.8%. Its increase is impressive, considering that just a few months earlier, in November 2019, it was the fourth in popularity.

According to the Washington Near East Policy Institute, Aksener is Erdogan’s greatest threat as a far-right Muslim, nationalist, and conservative. During his political career, he earned the nicknames “Iron Lady” and “Wolf”, the legendary wolf that led Turkish tribes out of harm’s way.

Facing her, Erdogan looks modest! Among other things, she wondered angrily “Why doesn’t Erdogan show a tougher stance against the Greek Cypriots?” Turkey has demanded that “Recover the Aegean islands of Greece”. Finally, it recently threatened a new invasion. Cyprus, saying the slogan of the 1974 invasion: “Aise is going on vacation again.”

Kemalist but a little

The 72-year-old Kemalist opposition leader. Kemal Kilindsdaroglu it has been politically insignificant for Erdogan. Even within his party, he is considered inadequate and certainly not charismatic. Hence the movements behind the scenes for his give and take sequence.

In an effort to gain a political audience, Kilindasaroglu has made various illusions against Greece. He has called for the liberation of the Aegean islands under Greek “occupation”, while in 2019 he declared that he would occupy them to recover them. In a public speech, he accused Erdogan of that “He gave them to the Greeks and that’s why he doesn’t speak.” “And I ask Erdogan again in a language that everyone can understand: ‘Who is Pserimos, brother?’ If it is not ours, who is it?

Already in 2017, he referred to the Greek occupation of 18 Turkish islands, continuing the theory of “gray areas”, which went one step further by going from “gray” to Turkish. The Kemalist party does not overestimate Erdogan’s positions on all fronts of Turkish foreign policy.

Kilindasaroglou is in favor of a reconnection with the Sisi regime Of Egipt, as with the Assad regime in Syria. Nor does it agree with Turkey’s participation in Libya. His followers call him “Turkish Gandhi”, mainly for his physiognomy and not for his political resemblance. This, however, did not prevent him at the beginning of the year from demanding his annexation. Crete and because he is also generous, he left us the western part, declaring that “only Chania is Greek”!

The rising mayor

THE Ekrem Imamoglou He may not be the leader of the opposition, but he is a potential opponent of Erdogan in the upcoming elections. It comes from the Kemalist Republican People’s Party (CHP), which has Kilindasaroglu as its leader. Despite the regime’s fierce efforts to prevent his election to the Istanbul Metropolitan Municipality, he was successful and was elected with the support of almost all of Erdogan’s opponents.

Polls that put the two men opposite even give Imamoglou a 4.5 point lead. His electoral victory in Constantinople marked the end of 25 years of Islamic political rule in the country’s largest municipality. He is considered moderate and reformist, although in practice he has not yet proven his worth. About Hellas, has sent a message of friendship and cooperation, but these generally do not last when the speaker is in command of Turkey.

The Evros architect

The resignation of the Minister of the Interior some time ago Suleiman Soilou via Twitter does not keep up with Turkey’s political morale. Their non-acceptance by Erdogan in no way closes the problem that has arisen between them. Soilou began his collaboration with the ruling party in 2012, as a member of the center-right wing that separated from the Democratic Party, following a personal invitation from Erdogan.

It did not take long to emerge and move up the governmental hierarchy. He has been hailed as a “tough madman” for his uncompromising stance on the Kurdish community and supporters of Fethullah Gulen. He even took over the massive purges, especially after the failed coup in July 2016.

According to many, his decision not to remain indifferent and to implement strict coronary protection measures was a risky move. Due to the seriousness of the measures, social reactions were provoked and, in addition, Soilou came into conflict with Erdogan. In fact, he does not hide his leadership ambitions for the post-Erdogan period. It also ensures that it is at the forefront of nationalism. It has played a key role in triggering the hybrid attack on Evros and has vowed to send more immigrants when the pandemic subsides.

The resignation also revealed differences in Erdogan’s environment. Soilou has the support of the government partner (the leader of the “Gray Wolves” Bahceli), but has an open front with the son-in-law of the Turkish president and finance minister. Berat Albayrak. The latter also aspires to be the one to receive the anointing of the succession. It is no secret that Erdogan is promoting the husband of his oldest daughter, Esra.

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