No. 156/18 14.08.18
Illegal Bayrak (14.08.18 http://www.brtk.net/yildirim-ve-beraberindeki-heyet-yarin-kktcye-geliyor/) broadcast that the Turkish Speaker of the Turkish Assembly Binali Yildirim will illegally visit the breakaway regime tomorrow upon an invitation by the “speaker of the assembly”, Teberrüken Uluçay.
This is the first visit abroad of Yildirim after he started his new duties.
Yildirim will arrive around 10.00 in the morning and he will hold meetings with the Turkish Cypriot leader Mustafa Akinci, with Ulucay and with “prime minister” Tufan Erhürman.
According to Bayrak, Yildirim will visit the breakaway regime heading a delegation of the Turkish Assembly which will hold contacts with the “TRNC assembly”.
He is expected to leave the occupied area of Cyprus late in the afternoon.
Turkish Cypriot daily Star Kibris newspaper (14.08.18) reports that the self-styled council of ministers met extraordinarily yesterday to discuss the measures which the occupation regime intends to take for dealing with the consequences from the devaluation of the Turkish lira (TL). No statement was made after the meeting, notes the paper, arguing that this created disappointment in the “people”, who were expecting to find out the above-mentioned measures. According to Star Kibirs, the most important decision taken yesterday was to extraordinarily convene the “assembly” today, interrupting the “body’s” vacation, which started on 25 June. Ways to overcome the economic crisis are expected to be discussed during the meeting with the contribution of all the political parties which participate in the “assembly”.
Meanwhile, Turkish Cypriot daily Kibris newspaper (14.08.18) reveals details regarding the 20 economic measures on which the self-styled council of ministers has been working for the past few days. The measures are expected to be announced during the extraordinary meeting of the “assembly” today and according to the results of the discussion and the suggestions of the opposition, some changes could be made. Some of the proposed measures, which are the following: The number of the apartments which foreigners could purchase will be increased to three [from one]. The transfer fees will be increased to 8% for the first apartment, 9% for the second and 10% for the third. The locals will be paying 1% for their first residence and a transfer fee will be added to this amount for their other ones. The rents [of the houses and businesses] will be paid based on a stable exchange rate of the foreign currencies [the basis will be the values which were valid in February]. The exchange rates will be stabilized for the fees paid in the private schools. The tax imposed on the casinos, the bet offices and the luxury villas will be increased, while the VAT in some products and the restaurants will be decreased to 5%. The local workforce will be supported and the foreign workers who come to the occupied area after acquiring a “work permit” will pay 5% of the minimum wage as a tax in case they bring their children with them.
Moreover, illegal Bayrak (14.08.18, http://www.brtk.net/?english_posts=economic-measures-announced) broadcast that Erhurman announced the measures during the “assembly’s” extraordinary meeting today.
“The measures […] include lowering of VAT rates, fixing foreign exchange rates for rents, switching to multiple electricity tariffs, discounts in deed transfer fees and providing incentives to local or domestic production”, notes Bayrak adding that Erhurman said that the “government” will introduce a set of 23 measures within the forthcoming days.
“Amongst the measures include lowering VAT on cleaning goods, certain food products, restaurant services and white goods”, notes the report adding the following:
“Tax returns will also be provided to consumers using credit and debit cards with the aim of minimizing tax evasion. Withholding tax applied on rents in foreign currency will also be reduced from 13% to 1% in exchange of fixing the currency exchange rate. The electricity authority will also switch to a multiple tariff system which will allow electricity prices to be lower at certain times of the day. The price stabilization fund for alcohol and tobacco products will also be raised in order to close the gap in the price stabilization fund for fuel in a bid not to raise the price of petrol. Among the other measures include levying a temporary additional tax on casinos and bet offices for a period of 6 months. Limitations on foreigners purchasing homes and property in the TRNC will be preserved, but the limitation to purchase 1 apartment will temporarily be raised to 3 apartments for a period of 6 months. Incentives will also be introduced for hotels to meet their needs from local and domestic producers”.
Under the title “The fire is growing”, Turkish Cypriot daily Havadis newspaper (14.08.18) reports that in spite of the interference of the Central Bank of Turkey yesterday, the devaluation of the TL did not stop, as the dollar exceeded 7 TL and the sterling pound the 9 TL, while the euro reached 8 TL.
Turkish Cypriot daily Kibris Postasi newspaper (14.08.18) reports that Tufan Erhurman, self-styled prime minister of the breakaway regime in the occupied area of the Republic of Cyprus, has said that they had asked for a meeting with Turkey and that the Turkish officials told them that they would reply within this week. In statements to illegal Bayrak, Erhurman noted yesterday that Turkey is experiencing very distressed days and added that it is very difficult to be in Ankara and discuss the breakaway regime’s economy during such days.
He claimed that they will not visit Turkey to take permission for the measures which they will implement for overcoming the economic crisis, but to discuss the “economic protocol” for 2019 and the ways of their “solidarity” because of the devaluation of the Turkish lira. “In any case we can hold this kind of discussion with Turkey over the phone”, he said adding that with the measures they will introduce their aim is to reduce the shrinking of the economy and protect the purchase power of the “people”.
Referring to the consequences of the economic crisis, Erhurman pointed out that they have an additional cost of 124 million TL only in personnel expenses and a deficit of 540 million TL within the past five months.
Turkish Cypriot daily Demokrat Bakis newspaper (14.08.18) reports that Turkish President Tayyip Erdogan said that no-one can issue threats against the Turkish nation.
He made these statements speaking during a dinner in Trabzon where he refeed to Cyprus saying the following: “In 1974 despite all the threats the blackmails and the embargoes they issued against us, they did not prevent this nation to rescue the Turkish (people) of Cyprus”.
Turkish Cypriot daily Demokrat Bakis newspaper (14.08.18) reports that Turkish Foreign Minister Mevlut Cavusoglu stated that a new process is needed in Cyprus in order for a solution to be reached.
He made these statements speaking at the 10th Ambassadors’ Conference which is taking place in Ankara.
Cavusoglu also referred to Turkey’s relations with Greece claiming that Turkey is always near Greece in difficult times; “however they only increase tension in Aegean and in the Mediterranean”, he said.
Turkish Cypriot daily Kibris Postasi newspaper (14.08.18) reports that the economic crisis deriving from the devaluation of the Turkish lira (TL) benefited tourism in the occupied area of the Republic of Cyprus. Fikri Ataoglu, self-styled minister of tourism of the breakaway regime in the occupied area of the island, told the paper that the occupancy of the hotels during the forthcoming Muslim Feast of Sacrifice will vary between 90-95%. He argued that the tourists coming from Turkey are different and more sociable than the clients of the casinos and that everybody, and especially the shopkeepers, will benefit during the feast.
Moreover, Ataoglu confirmed the statements made by Firuz Baglikaya, chairman of Turkey’s Travel Agents’ Union, who has said that an increase of 35-40% was observed in the tours to the occupied area of Cyprus. Ataoglu added that a “serious increase” exists in the number of the visitors not only from Turkey but from other countries as well.
Ankara Anatolia news agency (14.08.18 https://www.aa.com.tr/en/americas/bolton-turkish-envoy-meet-at-white-house/1230309) reports that U.S. National Security Adviser John Bolton met Monday with Turkish Αmbassador to the U.S. Serdar Kilic at the White House.
The meeting focused on American πastor Andrew Brunson, who is under house arrest in Turkey for terrorism charges, and bilateral relations, according to a statement by White House press secretary Sarah Sanders,
"They discussed Turkey’s continued detention of πastor Andrew Brunson and the state of the U.S.-Turkey relationship," said the statement.
Last week, a Turkish delegation held talks with officials from the State and Treasury Δepartments. Brunson and relations were also among the topics discussed.
Turkish Hurriyet Daily News (14.08.18 http://www.hurriyetdailynews.com/turkey-under-economic-siege-president-erdogan-says-135746) reports that Turkish President Recep Tayyip Erdoğan said Aug. 13 his country is under an economic "siege" that has nothing to do with its economic indicators.
During an address to Turkish Αmbassadors in the capital, Ankara, Erdoğan said that Turkey would overcome the "attack" on its economy.
He insisted that Turkey’s economy remains strong and said the currency would soon settle "at the most reasonable level."
In an apparent reference to the United States, Erdoğan said "the bullies of the global system cannot roughly, shamelessly encroach on our gains that were paid for by blood."
Erdoğan also dismissed any suggestion that Turkey might intervene in dollar-denominated bank accounts, saying any seizure or conversion of those deposits into lira was out of the question.
Referring to his statement on Aug. 12 that he said he has "Plan B or Plan C," Erdoğan added: "They say that Plan C is seizing capital. Did you read my mind? Are these people fortune-tellers? It is impossible to understand them."
The Turkish leader’s comments came after authorities launched investigations into hundreds of social media accounts for alleged reports they claimed were helping the currency’s plunge.
Erdoğan said there is an "economic terror" being waged on social media, adding that "traitors" would be punished.
Ankara Anatolia news agency (14.08.18 https://www.aa.com.tr/en/economy/turkish-treasury-borrows-nearly-470m-through-auctions/1230085) reports that the Turkish Treasury borrowed a total of 3.2 billion Turkish liras ($470 million) from domestic markets on Monday, according to an official statement.
The Treasury Undersecretariat reported that 1.72 billion Turkish liras ($251.5 million) in two-year fixed coupon government bonds (semiannually, first issue) were sold in an auction.
The government bonds will be settled on Wednesday and mature on Aug. 12, 2020. The total tender amounted to 3.1 billion Turkish liras ($451 million) with a 55.8 % accepted/tendered rate.
The Treasury said the term rate of 728-day government bonds was accepted at 11.76 %, while annual simple and compound interest rates were 23.51 and 24.89 %, respectively.
In Monday's second auction, the Treasury issued 91-day zero coupon government bonds (first issue) totaling 1.49 billion Turkish liras ($218.4 million).
The bonds will be settled on Wednesday with a maturity date of Nov. 14, 2018.
According to the undersecretariat, the total tender in the second auction amounted to 5 billion Turkish liras ($731.1 million), with a 29.9 % accepted/tendered rate.
The government bonds was accepted at 5.58 %, while annual simple and compound interest rates were 22.34% and 24.28 %, respectively.
The Treasury will set one more auction to borrow on Tuesday.
Turkish Hurriyet Daily News (14.08.18 http://www.hurriyetdailynews.com/action-plan-to-soothe-dollar-volatility-underway-turkeys-treasury-minister-albayrak-says-135727) reports that Turkey's leading business groups said on Aug. 14 that tighter monetary policy is needed to stabilise the lira and U.S.-Turkish disputes should be solved through diplomacy.
In a joint statement, the Turkish Industry and Business People’s Association (TÜSİAD) and the Turkish Union of Chambers and Commodity Exchanges (TOBB) said a "concrete roadmap should be prepared to lower inflation permanently," while also calling for austerity measures.
"We believe that our relations with our most important trading partner, the European Union, should be turned back into a positive frame," the statement said.
"As the business world, we have full confidence that our economy will be balanced again to get back to a sustainable growth process quickly by executing the necessary measures," it added.
Ankara Anatolia news agency (14.08.18 https://www.aa.com.tr/en/politics/russian-foreign-minister-arrives-in-turkish-capital/1230230) reports that Russian Foreign Minister Sergey Lavrov arrived in capital Ankara Monday to attend the 10th Ambassadors’ Conference.
Lavrov Tuesday will speak at the 10th Ambassadors’ Conference and will also meet Foreign Minister Mevlut Cavusoglu.
The two Ministers will hold a joint news conference after their meeting.
Lavrov's meetings are expected to address regional and international issues, including bilateral relations as well as Syria in particular.
The five-day conference will host 249 Turkish Ambassadors and two Charge d'Affairs, as well as a number of foreign diplomats.
In addition, Sabah (14.08.18 https://www.dailysabah.com/diplomacy/2018/08/14/chaos-in-us-administrations-management-of-foreign-affairs-fm-cavusoglu-says ) reports about the meeting between the two Ministrers and writes that Çavuşoğlu stated that the United States has "chaos" in its administration's management of foreign affairs.
"There is confusion within the U.S. administration. No one knows who is doing what, not only against Turkey but in general there is chaos in management," Çavuşoğlu said amid a visit by his Russian counterpart Sergey Lavrov.
"If the U.S. wants to continue as a reputable country, it cannot do so with these impositions," he added.
In a joint press conference with Çavuşoğlu, Lavrov on Tuesday called new U.S. sanctions, including those targeting Turkish economy, an "unlawful and illegitimate" policy.
Lavrov said the sanctions are a means for the U.S. to gain an unfair competitive advantage in global trade and will ultimately undermine the role of U.S. dollar as a settlement currency over time.
He added that conducting settlements in national currencies with Turkey and other countries have been discussed for a long time.
Lavrov also said Russia is "surprised" at the West's position on Syrian refugees, adding that conditions exist for start of refugees return.
The Foreign Minister arrived in Ankara on Monday for two days of talks mainly over issues related to Syria. Çavuşoğlu and Lavrov are discussing a four-way Syria summit planned between the leaders of Russia, France, Turkey and Germany.
The four countries are also known to have been opposing new U.S. sanctions, particularly those on Iran. Turkey, Russia and the European Union are against severing economic ties with Iran.
Turkish Hurriyet Daily News (14.08.18 http://www.hurriyetdailynews.com/trump-signs-defense-spending-bill-to-delay-f-35-delivery-to-turkey-135763O) reports that US President Donald Trump has signed a $716 billion defense spending bill that would delay the delivery of the F-35 fighter jets to Turkey pending a Pentagon report.
In a ceremony at Fort Drum military base in New York on Aug. 13, Trump expressed his pleasure for Congress’ quick approval of the National Defense Authorization Act.
"We are going to strengthen our military like never ever before. And that’s what we did," Trump said.
He said with the new budget for 2019, the U.S. will make a critical investment in nuclear weapons.
Earlier this month, the Senate overwhelmingly approved the defense policy bill.
It gives the Pentagon a $638 billion base budget for defense-related programs linked to the Department of Energy plus an additional $69 billion for possible overseas operations.
It also authorizes a 2.6 % pay raise for troops, the largest in nearly a decade, as well as boost the size of the Navy and the ranks of the military by 15,600 active-duty troops.
It includes an amendment prohibiting sales to Turkey of the F-35 Joint Strike Fighter jets until the Pentagon issues a report on Turkish-American relations in 90 days.
The report is expected to include an assessment of Turkey's participation in the F-35 program as well as the risks that would be posed by the country's purchase of the Russian S-400 missile defense system.
Turkey's removal from the F-35 program was taken out of the bill by the Congressional Conference Committee.
Defense Secretary Jim Mattis, in a letter to the Senate on July 7, opposed Turkey’s removal from the program, saying it could cause a disruption in a supply chain for the U.S. military and its partners while increasing other program costs.
Turkey has been in the F-35 program since 1999. The Turkish defense industry has taken an active role in the production of aircraft. Alp Aviation, AYESAS, Kale Aviation, Kale Pratt & Whitney and Turkish Aerospace Industries have been producing parts for the first F-35 fighter jet.
Turkey plans to purchase 100 F-35 fighter jets in the coming years.
Turkish Hurriyet Daily News (13.08.18) reports that Turkey's Financial Crime Investigation Board has launched a probe into what it described as "fake news" aiming to manipulate economy.
"MASAK started an investigation into people and institutions that spread fake news, such as those claiming that 'converting foreign exchange into Turkish lira by state invervention' and 'fixing dollar exchange rate' by ditching floating rate policy, which is a main pillar of the free market," Treasure and Finance Ministry Press Undersecretary Ali Berber said in a tweet on Aug. 13.
Presidential Communications Director Fahrettin Altun described the rumors as "disinformation campaign" based on a statement by President Recep Tayyip Erdogan, who had said that "You must know that keeping this nation on its feet is not just our duty but also the duty of industrialists and merchants. Otherwise, I will be compelled to implement Plan B or Plan C."
"This disinformation campaign is part of the economic war that has been waged against our country. At no point in his remarks did the President talk about a potential seizure of foreign currency deposits. The President's remarks reflected his administration's determination to maintain the strength of Turkey's economy and served as a warning against the potential outflow of foreign currencies," Altun said. "Provided that the President did not reveal the details of plans B and C, it is unacceptable that certain people come up with fictive scenarios in order to unsettle the people and market players."
TURKISH AFFAIRS SECTION