Here's what worries me about the impasse wrt TR and SE on NATO: First, most ppl I've talked to assume this is some kind of "transactional" issue that will be resolved: "they're just figuring out the price". I see this more as a political issue. And it involves peanuts... Anti-PKK/terrorist policies is understandably something that unites many Turks (although not all Kurds). Pushing hard against SE to change its domestic and/or foreign policy could potentially revitalize the AKP in the eyes of nationalists.

Swedish daily DN continues with its subpar analysis of Turkey, today in some kind of biography of Erdogan that reads as if it was published by Today's Zaman dn.se/varlden/erdoga… Critically, there is nothing about the challenge to RTE and the AKP from non-elected state elites up until 2013, which was pretty crucial for the political trajectory. No mentions of the judiciary's attempts to ban the party,...

I don't know of any Swedish media institutions that still whitewashes the Gulen movement the way the largest daily @dagensnyheter does. Just today there were two articles touching on the GM, both either omitting or rewriting its problematic past in Turkey. First of all, and to a critical point: I think it would a big mistake to buy into the Turkish governments' allegations that the Gulenists mentioned in the articles are in any way terrorists. They are legitimate political refugees and their human rights deserve safeguarding.

Not obvious to me where this supposed upside foreign pricing is visible..

https://twitter.com/ali_hakan_kara/status/1460168783511924736

Yes, there was a recent increase in foreign equity inflows, but that's one data point so far

The log-linear trend in TRY is now fully priced into medium-term FX forwards: 22 percent depreciation rate per year until TRY at 12.2 in Q3 2022 Longer term, post-2023, FX forwards have a somewhat flatter rate of depreciation (assuming perhaps that RTE is not in charge then). Still, TRY at 20 in 2025 looks rough.

Where others see optimism in an approaching end of RTE's rule in Turkey, I see substantial political risk. I still don't see how the current regime simply allows an election and loses, with all the - to the current elite
- private costs at stake. (Thread) And yet, without a meaningfully authoritarian intervention (war, autocoup, unprecedented voter fraud etc) it's hard to see AKP winning another election, even in coop with MHP as well as take into account the current unfree and unfair levels of Turkish elections.

The thread nobody asked for, where I lay out my thoughts on recent events in Tunisia. As someone who has studied the economic effects of coups as an academic, I get a real sense of deja-vu as Sunday's events imo do bear the hallmark of a coup: A forceful exclusion of political competitors under dubious constitutional grounds w the aid of the security apparatus. Add a curfew and some rights violations on top, and you basically have a coup cooking. Sure there's an ongoing political-economic crisis, there always is.

”there is nothing constitutional about this coup. This is a coup as purely and simply as the one that toppled Mohamed Morsi in Egypt in 2013 and tried to topple President Recep Tayyip Erdogan in Turkey in 2016.”

https://twitter.com/middleeasteye/status/1419707292073746443

Saied’s ”only motive for repeatedly thwarting the nomination of positions for the Constitutional Court - even though four are chosen by the presidency, four by parliament and four by the judiciary - is to stop a body that can rule his moves unconstitutional from existing.”

Looks like a coup, walks like a coup. My research suggests this is bad news for #Tunisia’s economic and political development. drive.google.com/file/d/0BxGIkx…

https://twitter.com/glcarlstrom/status/1419536963087052801

Less technical version here freepolicybriefs.org/2015/05/25/cou…

Even without a "non-linear event" in Turkey in coming weeks, the next couple of months could become v volatile with a cat-and-mouse game between TCMB and markets, as Kavcioglu feels the tick of time and pressure from RTE to lower rates, and markets pressuring him not to. What could ensue is something close to what happened in 2018, a slow burn of unsustainable monetary and fiscal policies, with various macropru policies (ab)used to shield the financial sector from external shocks, that is until some event breaks the fragile equilibrium

The Turkey macro commentary field is arguably quite male-dominated which is unfortunate because there are quite a few good female economists covering this topic. And so for every Tim, Robin, and Atilla, there's a Maya, Sebnem, and Guldem. This is for your gender balance, journos. In Turkey: @sedagulermert @ozlembayraktar @ozlemderici @unuvarburcu @SelvaDemiralp @GizemAltinsac @guldematabay

In a historical context, Agbal's reign - however promising - looks like a blip in comparison to TRY's long-term depreciation. Global factors matter a lot for Turkey, but unlike other EM currencies, the idiosyncratic (or local) factor is quite dominant. If its recent crisis isn't to a large extent about homemade problems, how come the sovereign spreads spike for Turkey but not for EM indices overall?

I'm sure global conditions contributed to Agbal's decision but I feel Robin is unnecessarily underplaying domestic factors at play here.

https://twitter.com/RobinBrooksIIF/status/1376166178767392777

For one, markets were already losing hope that TCMB would successfully bring inflation down as shown by breakevens. The timing of the rise is only weakly correlated with US yields but fairly strongly so with RTE speaking publicly against the aim of the fmr economic policy team.

Well R.I.P orthodox economic policy in Turkey. My condolences to its citizens, who have to live under an authoritarian kakistocracy where the more competent and those willing to do what is necessary get sidelined for less able yes men. Agbal's firing is unjust, counterproductive, and will be costly. Rarely have I seen such support for the TCMB and its policies among investors and economists as during his tenure. Misplaced support, if you ask me, but still. That's no fault of Agbal's, all due respect to him.

I would explain AKP's pre-2015 policy towards the Kurds as a (now failed) attempt to procure votes through expanding cultural rights, while at the same time withholding real political rights. erikmeyersson.com/2015/08/13/how… If successful, it would have likely given AKP the supermajority needed not just to rewrite the constitution, but possibly also to generate a level of political stability that could have put Turkey on a different course. But this is a counterfactual we cannot observe.

Expecting this to lead absolutely nowhere

https://twitter.com/emeyersson/status/1372883251732287490

The good news here is that the communication from @AnnLinde and @SweMFA is much stronger than during a certain predecessor web.archive.org/web/2014040616…

This is just a friendly reminder that Turkey's authoritarian government to this day receives unconditional support from European financial institutions, especially the EBRD. The EBRD's partners include SOEs like Azeri SOCAR as well as TR government cronies.

https://twitter.com/emeyersson/status/1331205186593886211

The EBRD has repeatedly made its clear its sidestepping of democratic preconditions for investment in the country, not only in statements by the President to the press but also in its official reports. aa.com.tr/en/economy/ebr…

https://twitter.com/emeyersson/status/1327364063291207687?s=20

It's not every day you get an email with (poorly) veiled threats from a member of the @EBRD Executive Committee for linking to a Reuters article about an investigation into its former president. Is this really the image the EBRD wants to show?

https://twitter.com/emeyersson/status/1333051281158647809

Well I guess message received on what this was really about and who this was really from. A personal adviser to the Kazakh and Uzbek presidents has blocked me.

Albayraks's (now confirmed) resignation is tricky. Sure, maybe he's pissed about Agbal's appointment. Maybe it's a power shift with the old AKP guard and he's pulling a Soylu resignation. Maybe he's more of a liability than asset now with Biden as President. It's strange there's no replacement announced. Also weird to lead w resigning on social media instead of official channels. The whole thing looks botched and unprofessional. Moreover, it appears to cloud the Agbal appointment. Is this good policy- or political instability news?

Here’s why I think Agbal’s appointment signals more (of the same) problems rather than (new) solutions:
1) Agbal imo represents another Babacan/Simsek: an investor-liked, clear-headed policymaker but w a small power base and - bc of institutions - little impact over actual policy 2) To the extent that TCMB is a now a political extension of RTE’s policy, Uysal isn’t removed bc of his policies, he’s removed so he can take the blame for RTE’s failure (in forcing TCMB too cut too aggressively and preventing market-demanded hikes)

“Halkbank’s indictment also accuses Erdogan’s son-in-law Berat Albayrak of participating in the scheme, though federal prosecutors have not formally charged Albayrak in the conspiracy.” courthousenews.com/second-circuit… “Perhaps the most damning allegation is that Albayrak may have had indirect ties to ISIS’s oil trade — a trade that bankrolls the terrorist group’s operations — through a company called Powertrans.” foreignpolicy.com/2016/12/07/lat…