Turkey-US Relations – Geopolitical Monitor https://www.geopoliticalmonitor.com Military, Politics, Economy, Energy Security, Environment, Commodities Geopolitical Analysis & Forecasting Mon, 28 Dec 2020 04:29:04 +0000 en-US hourly 1 https://wordpress.org/?v=5.5.14 Backgrounder: Geopolitics of the Eastern Mediterranean Conflict https://www.geopoliticalmonitor.com/backgrounder-geopolitics-of-the-eastern-mediterranean-conflict/ https://www.geopoliticalmonitor.com/backgrounder-geopolitics-of-the-eastern-mediterranean-conflict/#disqus_thread Sun, 27 Dec 2020 14:50:18 +0000 https://www.geopoliticalmonitor.com/?p=38669 Who is backing who in simmering geopolitical tensions over energy deposits in the Eastern Mediterranean?

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Tension in the Eastern Mediterranean has been on the rise over the past few years. Amid longstanding maritime disputes and the discovery of rich gas deposits, Turkey has been acting with increasing boldness. In a dynamic that resembles the one observed in the South China Sea, Ankara has claimed waters that the international community considers part of Greece and Cyprus by combining assertive rhetoric with controversial legal arguments and military maneuvers. In November 2019, Turkey signed a controversial deal with Libya’s UN-backed Government of National Accord (GNA) on the delimitations of the respective exclusive economic zones (EEZ), which attracted much criticism as it ignores the presence of Crete. In August 2020, Greece reached a similar agreement with Egypt, causing Turkey to protest as – according to its declarations – it violates its rights over the continental shelf.

Later in the same month, Ankara sent a seismic survey vessel named Oruç Reis alongside five warships in waters south of the Greek island of Kastellorizo, which are considered part of Greece’s EEZ, thus attracting condemnation from the international community. The Greek military followed the Turkish formation closely to monitor its movement, and at one point a Greek frigate collided with a Turkish one. At that point, France intervened by sending a warship to take part in joint maneuvers with the Greek Navy and by dispatching two Rafale fighters to Crete. The United Arab Emirates took similar measures by dispatching four F-16 jets to train with the Greek military in Crete.

The issue has become increasingly tense amid such military posturing, and the fact that it is intimately linked with other geopolitical hotspots in the Mediterranean makes the situation all the more volatile looking ahead. 

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Idlib Campaign Puts Turkey-Russia Detente on Notice https://www.geopoliticalmonitor.com/idlib-campaign-puts-turkey-russia-detente-on-notice/ https://www.geopoliticalmonitor.com/idlib-campaign-puts-turkey-russia-detente-on-notice/#disqus_thread Fri, 14 Feb 2020 14:12:32 +0000 https://www.geopoliticalmonitor.com/?p=37682 Turkey and Russia’s divergent interests in northern Syria can no longer be glossed over.

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Summary

Buried beneath headlines of impeachment and the Wuhan coronavirus, events are playing out that could reshuffle the deck of geopolitical alignments surrounding the Syrian civil war.

The catalyst was the launch of a long-anticipated government offensive on Idlib. The operation, which pits Turkey-allied militias against the Assad regime and its Russian ally, was always going to test the strength of Moscow and Ankara’s nascent detente. The hope in Russia had always been that Turkey would clear out ahead of the final push to reunify the country. That hasn’t happened; in fact, Turkey has now doubled-down on the defense of its proxies in northwest Syria, and we could be heading to yet another escalation in the protracted conflict. The new fighting has already displaced some 700,000 people in Idlib since December – the largest migration the war began.

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Point Counterpoint: Turkey Belongs in NATO https://www.geopoliticalmonitor.com/point-counterpoint-turkey-belongs-in-nato/ https://www.geopoliticalmonitor.com/point-counterpoint-turkey-belongs-in-nato/#disqus_thread Fri, 27 Sep 2019 11:03:36 +0000 https://www.geopoliticalmonitor.com/?p=36997 NATO needs Turkey, and Turkey needs NATO.

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Point counterpoint is a new series where two analysts assess a pertinent geopolitical issue from opposing points of view. Neither view represents an official stance of Geopoliticalmonitor.com or any other institution the authors are associated with. The article in favor of Turkey leaving NATO can be found here.

 

The idea that Turkey’s relations with the West are on life support is boilerplate wonkery at this point. Whether it’s the country’s purchase of a Russian-made S-400 missile system and subsequent banishment from the F-35 program; Nazi name-calling and other venomous exchanges with European capitals ahead of the 2017 constitutional referendum; divergent visions on the future of Syria and its US-backed Kurdish populations; or yet unheeded demands for the extradition of Fethullah Gulen – there’s no shortage of issues prying Turkey away from its erstwhile Cold War allies in the Atlantic Alliance.

But what is to be done about it?

Some argue that Turkey should leave NATO, voluntarily or otherwise, because its geopolitical orientation under Erdogan is fundamentally incompatible with the alliance. I would counter that this is short-term thinking that risks throwing out the proverbial baby with the bathwater. When one looks beyond the immediacy of this taxing historical moment, the age old Cold War symbiosis is still evident:

NATO needs Turkey, and Turkey needs NATO.

 

What is NATO, anyways?

Such a question would never be asked in the earliest days of the alliance, because the answer was abundantly clear: NATO was a collective security organization intended to defend liberal democratic countries from the ideological and military threat represented by the USSR, and, from 1955 onward, the Soviet doppelganger of the Warsaw Pact. The existential nature of the threat, whether real or imagined, was essential to the alliance’s Cold War-era success – it helped to smooth over differences among member states and lubricate the politics of vastly disproportionate contributions from the US military.

The collapse of the USSR changed all that. NATO, which had always defined itself in opposition to the Soviet threat, was suddenly deprived of a raison d’être. In the decade that followed, it tried on new hats: expander, peace-maker, democratizer, and counter-terrorism bloc. But the roles never became entrenched in the hearts and minds of NATO’s core electorates, and the resulting apathy eventually opened the door for politicians like Donald Trump, who gave voice to the hitherto taboo idea that NATO is not so indispensable after all.

But the geopolitical landscape is changing once again and shifting toward something that resembles the liberal-illiberal schism of old. This rebooting of history could be decisive for the Alliance, as NATO can once again live up to its original billing as a defender of democratic values, and in this new project Turkey has an important role to play. The key concept here is defense – NATO can provide collective security against external threats from potential state adversaries like Russia and China, including emerging threats like disinformation, election meddling, and cyber-attacks. It can also promote and encourage democratic governance among NATO member states, even ones flirting with illiberalism like Turkey. But in terms of offense, NATO should not have a role, whatever the emotive pitch at the time, as the Libya adventure and its tragic repercussions have so clearly illustrated.

This idea of Turkey in a reinvigorated NATO, one that’s fit for contemporary purpose, admittedly relies on some wishful thinking. After all, Turkey – already a NATO member – has seen a broad erosion of its democratic standards over the course of President Erdogan’s 16-year rule. And even that ‘city upon a hill’ of the United States has not exactly been putting on a clinic in democratic norms lately. But presumably these are temporary trends that will ultimately pass; in the case of Turkey, the winds of change are already being felt in recent local elections. And if the ultimate foreign policy goal is to promote good governance and peace, isn’t a Turkey that’s within NATO far more likely to undergo a democratic resurgence than one on the outside looking in?

 

Turkey: geopolitical lynchpin between East and West

Questions of governance aside, Turkey remains an invaluable strategic asset for the NATO alliance.

The country is home to 80 million people and boasts a relatively young median age of 30.9 years (by way of comparison, Germany’s median is around 47 years). Thanks to a decade and a half of breakneck expansion (the economy grew 7% on average from 2010-2017), its GDP now ranks 19th in the world and, recent turmoil notwithstanding, Turkey’s demographic profile offers rare breakout potential in an otherwise stagnant (or worse) continental outlook. The country also boasts the largest land army of any NATO country apart from the United States.

Given its demographic, economic, and military heft, Turkey represents an indispensable middle power in the region.

But what region might that be? Given Turkey’s privileged geography at the crossroads of East, West, North, and South, it could refer to most of them: Europe, South and Central Asia, the Middle East, and Africa. It’s hard to imagine a state with more favorable positioning for great power politics. Turkey is a key transit hub for oil and gas, whether it’s the Blue Stream and Turkish Stream from Russia or the Trans-Anatolian Pipeline (TANAP) network linking the Caspian to Western Europe via the Trans-Adriatic Pipeline (TAP). It’s also home to the Incirlik Air Base, a crucial hub of US Air Force operations in the Middle East since the earliest days of the Cold War.

Turkey’s post-WWI dimensions belie an outsize voice throughout its neighborhood. As heir to the Ottoman cultural, religious, and historical legacy, Ankara’s sphere of influence projects far beyond its borders, taking Ankara’s diplomacy to places where its Western allies cannot follow. Some of these bonds are cultural, such as the ethnic and linguistic ties between Turkmen populations in the Middle East and Central Asia (for example, allied Turkmen militias in northern Syria that have proven valuable allies in military operations there). Turkmen populations numbering in the tens of millions can be found in Uzbekistan, Iran, Russia, Kazakhstan, China, and Azerbaijan. Others bonds are religious and stem from Turkey’s standing in the Islamic world; the country also has the relatively rare distinction of being an Islamic power that is generally positively disposed toward the West. Under Erdogan’s rule, Turkey has doubled down on its support for the Muslim Brotherhood and was an early and eager backer of the Morsi government in Egypt, and Ankara maintains close relations with Qatar, Iran, and Pakistan.

In the unending Great Game of power politics, Turkey has been and will continue to be a central player. The question is: Does NATO want access to its considerable advantages, or does it want them to one day be arrayed in opposition to the alliance?

 

In search of a way forward

If the status quo of Turkey and NATO is so favorable in theory, why does every week bring a new blowout between Ankara and its Western allies?

The answer is simple: The world has changed but NATO has not changed with it.

The intrinsic value of NATO to Turkey has always been the protection it afforded vis-à-vis Russia, its imperial competitor and enduring nemesis of the Ottoman Empire. But now the Russia threat has waned, and the old hinterlands of the Black Sea, South Caucasus, and Central Asia are opening up to competition and cooperation from regional powers. Pair this with the rise of a wildly popular nationalist leader in Erdogan, the collapse of Turkey’s EU membership drive, and the passing of the United States’ hegemonic moment and you have all the ingredients for an assertive foreign policy.

It would be a mistake to assume that these systemic trends have made the present acrimony inevitable. Rather, that was accomplished by successive US leaders who have failed to adapt to these new realities. Whether it was the decision to forbid Turkey’s purchase of US-made Patriot missile systems (which led into the eventual S-400 acquisition), or Washington’s persistent military and political support for Syrian Kurds, US officials proven unwilling to listen to, let alone heed, the core interests of a longstanding ally. Exchanges have continued in the Cold War mold: top-down and unyielding, like a parent scolding a child. It’s no wonder that a 2017 Pew poll found that only 23% of the Turkish population had a favorable view of the alliance, a far cry from the median rating of 61%. Even the most ardent supporters of throwing Turkey out of NATO would have to wonder how things have gotten this bad.

It’s no accident that Turkey’s break-up with the West is playing out in parallel with NATO’s own post-Cold War existential crisis. Both are being driven by structural changes in the international system. But fortunately, this also means both problems can be solved at the same time. If NATO can rediscover its credibility as guarantor of the free world and develop a softer touch in addressing the core interests of member states, one that’s more suited to a multipolar and highly complex global landscape, then there’s no reason why Turkey shouldn’t continue to be a valuable member of the alliance long after presidents Erdogan and Trump have faded into the political ether.

 

Point counterpoint is a new series where two analysts assess a pertinent geopolitical issue from opposing points of view. Neither view represents an official stance of Geopoliticalmonitor.com or any other institution the authors are associated with. The article in favor of Turkey leaving NATO can be found here.

This article was originally published on August 13, 2019.

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Turkey’s Assertiveness in and around Cyprus: South China Sea Redux? https://www.geopoliticalmonitor.com/turkeys-assertiveness-in-and-around-cyprus-south-china-sea-redux/ https://www.geopoliticalmonitor.com/turkeys-assertiveness-in-and-around-cyprus-south-china-sea-redux/#disqus_thread Thu, 19 Sep 2019 11:53:16 +0000 https://www.geopoliticalmonitor.com/?p=37134 Opposition to Turkey’s geopolitical power play in the Eastern Mediterranean is mounting, but there’s no sign that Ankara will be backing down anytime soon.

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Summary

The discovery of significant offshore oil & gas fields in the Eastern Mediterranean in the past few years has drawn increased attention to this strategical area at the crossroads between Europe and the Middle East. Hydrocarbon deposits are also believed to lay under the waters surrounding Cyprus; but while exploration activities have generally fostered cooperation elsewhere, around the island the situation is different. Turkey, which has occupied the northern part of Cyprus since the 1974 crisis triggered by a Greece-backed coup, has been leveraging the presence of a Turkish minority and the self-proclaimed Turkish Republic of Northern Cyprus (TRNC) to assert its rights over the oil & gas deposits close to the island. This has raised concern in the region and in the European Union, which imposed sanctions on Turkey over its drilling activities in and around Cyprus.

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The Geopolitics of the Black Sea https://www.geopoliticalmonitor.com/the-geopolitics-of-the-black-sea/ https://www.geopoliticalmonitor.com/the-geopolitics-of-the-black-sea/#disqus_thread Tue, 03 Sep 2019 13:00:50 +0000 https://www.geopoliticalmonitor.com/?p=35443 Long the site of great power competition, the Black Sea region appears to be heating up once again.

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Summary

In today’s context of mounting tension between great powers, notably the West and Russia, the Black Sea holds a particular strategic importance: it represents the waterway connecting Europe, Russia, and the Middle East; it is believed to host substantial reserves of hydrocarbons; it is a gateway for gas pipelines fueling the European markets; and it is a key theatre in the confrontation between Russia and NATO. And now that the Atlantic Alliance’s cohesion is strained by internal disagreement (especially as Turkey wants to assert its own interests and act more independently from, if not against, its European and American allies), Moscow has a good opportunity to increase its influence in this critical region.

 

Background

Controlling the Black Sea has been an objective of Russian foreign policy for centuries. As a vast continental power, Russia wanted to reach the southern warm seas to expand its influence. Under this logic, dominating the Black Sea was the first step to later reaching the Mediterranean. After centuries of struggles, the rising Russian Empire finally managed to establish its firm control over the Black Sea’s northern coast after conquering the Khanate of Crimea in 1783. Afterwards, Russia’s push toward the south became an axis of its grand strategy. Among other factors, the tsar’s efforts to extend influence over the Balkans and to weaken the decaying Ottoman Empire triggered the Crimean War (1853-1856), which ended in a severe defeat for Russia. But this did not stop St. Petersburg’s quest, thus causing other conflicts in the region which culminated in the Great War. After the shocks of the 1917 Revolution and of WWII, Russia (now the Soviet Union) took control of all the Balkan Peninsula, Greece excepted, by establishing communist regimes that in 1955 were tied in an alliance known as the Warsaw Pact. As such, the Black Sea turned into a largely Soviet-controlled zone during the Cold War. The only section that fell outside of Moscow’s dominance was the southern coast, part of NATO member Turkey. In strategic terms, this meant that access to the Mediterranean was difficult for Soviet forces, but at the same time it was equally challenging for NATO units to enter and operate in the Black Sea.

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Tweets Alone Won’t Save Idlib from Tragedy https://www.geopoliticalmonitor.com/tweets-alone-wont-save-idlib-from-tragedy/ https://www.geopoliticalmonitor.com/tweets-alone-wont-save-idlib-from-tragedy/#disqus_thread Mon, 12 Aug 2019 13:35:30 +0000 https://www.geopoliticalmonitor.com/?p=36986 It will take direct and unified intervention, not tweets and condemnation, if the West is to head off a humanitarian catastrophe in Idlib.

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The desperate humanitarian toll from the renewed Syrian government offensive in Idlib is mounting by the day. Meanwhile, it will take much more than tweets of condemnation from the EU and United States to stop an increasingly confident Bashar al-Assad, and his Russian and Iranian backers, from retaking the key province despite the costs.

As displayed in Aleppo, Ghouta and Deraa, Assad and his allies have shown that they will stop at nothing to win. They have brutally employed a broad arsenal, from chemical weapons, starvation, blockade, and barrel bombs to using scorched earth tactics.

All the while, Western powers have largely failed to adopt a consistent and united approach to the civil war, now in its 9th year, let alone taking firm steps to stop the fighting.

With Idlib firmly in Assad’s sights, now is the time for tough choices, and for the West to take bold and swift action. Sitting on the fence is an indirect thumb up to Damascus and Moscow to continue their deadly operations.

Either the Western powers move beyond mere words and take a firm stance to stop the Idlib offensive, which includes reports of alleged new chemical weapons use, or they strike an unprecedented deal with Russia that gives renewed political recognition to Assad and averts a new humanitarian catastrophe and certain destruction of the city.

The alternative of doing nothing means that Assad will one way or another take back Idlib, whatever the cost. That cost is likely the slaughter of thousands more people, millions more displaced, and large-scale devastation.

In that scenario, as Assad eventually reclaims Idlib and other opposition territory through force, what little Western bargaining position that remains regarding the future framework of Syria will evaporate.

Ominously for Idlib, Russian President Vladimir Putin, on the topic of a full-scale assault, stated in recent weeks: “I don’t rule it out, but right now we and our Syrian friends consider that to be inadvisable given this humanitarian element.”

There have been thousands dead in recent weeks, thousands more displaced, and dozens of hospitals and civilian infrastructure destroyed. Ironically, this is all with Moscow keeping the “humanitarian element” in mind. What will become of Idlib if Russia and Assad ignore the humanitarian picture?

According to James Jeffrey, the US envoy for Syria, the Trump administration has found “overwhelming international support for an immediate ceasefire in Idlib, and this international support is only growing.”

However, as the last several years have proved, the United Nations is effectively paralyzed on Syria and words and tweets count little in discouraging Assad and Putin.

In fact, Moscow quickly rejected a tweet from the US President Donald Trump demanding that Russia and Syria “stop bombing the hell out of Idlib” and “indiscriminately killing innocent civilians.”

In this crucial phase of the Syrian war, the importance of Idlib cannot be underestimated. It borders with Turkey and links the key highways to major cities under regime control, including Aleppo, Hama, and Latakia.

These roads open up vital new channels for the regime in terms of much-needed commerce and logistics.

It is, of course, also the last bastion of the opposition forces and resistance against Assad. The population of the province increased from 1.5 million to almost 4 million as it became the center for thousands of displaced civilians and rebels from formerly opposition-held areas.

The same people that fled the likes of Ghouta and Deraa under fierce blockade and bombardment to seek relative sanctuary in Idlib are now facing a new round of atrocities.

Idlib remains vital to Turkey, which has a number of observation posts along the de facto border with regime forces as part of the 2018 “demilitarization zones” agreement with Russia and Iran.

Ankara thought it had a good understanding with Moscow over the plight of Idlib, but this is unravelling fast as the regime and Russian bombardment has intensified.

The demilitarization agreement may seem like a shrewd peace deal on the surface and a way to stave off more bloodshed, but in reality, it was always a veil for Assad and his backers to delay, regroup, and plan their inevitable military adventure on the remaining opposition-held areas.

The hardline Islamist group, Hayat Tahrir al-Sham (HTS), has a significant foothold in Idlib, and Ankara was always going to struggle to persuade mainstreams rebels to give up heavy weaponry, let alone get the jihadists to leave the planned buffer zone.

In turn, the presence of HTS was always going to be a recurring pretext for Assad and Russia to wage new military adventures.

As the battle threatens to gather speed, so too does Turkey’s conundrum. To stave off the assault, it has tried to unite various rebel factions and bolstered their defenses. Nevertheless, the more that Turkey reinforces rebel ranks, the more that diplomatic relations with Moscow and chances for a peaceful resolution to the war disappear.

The assault on Idlib threatens to send millions more refugees to Turkey, but it will also put Turkish spheres of influences in Afrin and al-Bab at risk. Turkey could easily become more directly embroiled in a war that it can ill-afford with plenty of domestic headaches already to contend with.

At the end of the day, Turkey alone is powerless to prevent Assad and Moscow from making their move. Ankara may have to make difficult choices of its own to retain its spheres of influences, and ultimately its main quest of keeping the Syrian Kurds in check.

Only a united response from the West can stop the transfer of Idlib and the rest of opposition territories to Assad, and given the Western track record over the past several years, that response is unlikely to go beyond mere tweets of condemnation.

 

The views expressed in this article are those of the author alone and do not necessarily reflect Geopoliticalmonitor.com or any institutions with which the author is associated.

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Backgrounder: Turkey and the S-400 Affair https://www.geopoliticalmonitor.com/backgrounder-turkey-and-the-s-400-affair/ https://www.geopoliticalmonitor.com/backgrounder-turkey-and-the-s-400-affair/#disqus_thread Tue, 23 Jul 2019 08:40:43 +0000 https://www.geopoliticalmonitor.com/?p=36902 Turkey has officially been kicked out of the F-35 program after purchasing Russia’s S-400 platform, but there’s still plenty more time before relations with the West truly hit rock-bottom.

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Summary

Turkey’s decision to purchase the Russia-made S-400 air defense system has driven another wedge between the country and its NATO allies in a period of already strained relations. In response, the United States removed Turkey from the F-35 fifth-generation stealth fighter program, and economic sanctions could also be implemented. Many are now questioning Ankara’s continued membership to the Atlantic Alliance. And while an expulsion remains unlikely, the S-400 issue will still have far-reaching repercussions for US-Turkey relations.

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Fallout Mounts for Saudi Arabia in Wake of Khashoggi Murder https://www.geopoliticalmonitor.com/fallout-mounts-for-saudi-arabia-in-wake-of-khashoggi-murder/ https://www.geopoliticalmonitor.com/fallout-mounts-for-saudi-arabia-in-wake-of-khashoggi-murder/#disqus_thread Tue, 23 Oct 2018 14:46:57 +0000 https://www.geopoliticalmonitor.com/?p=35805 The diplomatic consequences are mounting for Saudi Arabia after the apparent assassination of journalist Jamal Khashoggi.

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Summary

The three weeks following the murder of Jamal Khashoggi have amounted to a PR tug-of-war between the Kingdom and governments in the Western world.

Attempts by Saudi and US authorities to first ignore, then downplay, and then offer alternative explanations of the events leading up to Khashoggi’s death have so far fallen flat. This is one case where the news cycle has remained singularly focused on the scandal, helped by a stream of harrowing details coming out of Ankara.

Turkey has its own geopolitical reasons to make sure that the Saudis pay for their Khashoggi gambit, and President Erdogan has promised to release all the information he has on the assassination on Tuesday.

The ordeal has already resulted in serious costs for the Saudi regime, and there’s likely more to come.

 

 

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Global Forecast (9-25-2018) https://www.geopoliticalmonitor.com/global-forecast-9-25-2018/ https://www.geopoliticalmonitor.com/global-forecast-9-25-2018/#disqus_thread Tue, 25 Sep 2018 15:55:16 +0000 https://www.geopoliticalmonitor.com/?p=35659 Sweden’s far-right might sneak into the Riksdag via the back door, Brexit gut-check time in the United Kingdom, and new hope for US-Turkey relations.

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Sweden PM Löfven loses confidence vote

As expected, former prime minister and leader of the Social Democrats Stefan Löfven has lost a confidence vote and will be forced to step down as the country’s leader. He will remain prime minister in a caretaker capacity until a new administration is formed or new elections are held.

Löfven had first crack at forming a coalition following inconclusive elections earlier this month. His failure was assured in the direct aftermath of the election, when the center-right bloc under Ulf Kristersson pledged to reject Löfven’s leadership in a confidence vote.

We seem to be moving closer to the scenario envisioned in a previous Global Forecast. Sweden employs a negative majority system in its Riksdag, which means that the ruling coalition is enshrined not because it commands majority voting power, but rather because it hasn’t received a majority of votes against it. The system leaves significant room for ambiguity in coalition formation, which is an important factor given the political toxicity of the current kingmaker: the far-right Sweden Democrats.

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FLASH: Turkey Central Bank Raises Interest Rates to Stem Lira Collapse https://www.geopoliticalmonitor.com/flash-turkey-central-bank-raises-interest-rates-to-stem-lira-collapse/ https://www.geopoliticalmonitor.com/flash-turkey-central-bank-raises-interest-rates-to-stem-lira-collapse/#disqus_thread Thu, 13 Sep 2018 14:55:03 +0000 https://www.geopoliticalmonitor.com/?p=35477 Is Turkey’s central bank truly independent, or has the “enemy of interest rates” finally relented?

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Turkey’s central bank has hiked its interest rate from 17.75% to 24% in an effort to stem the slide of the lira. The rate increase came in higher than the 22% expected in a Reuters poll of prominent economists.

So far the rate hike has produced its intended effect of shoring up the value of the beleaguered Turkish lira. The currency has been trading as much as 5% higher today on the news.

The lira had been struggling in the run-up to the central bank meeting, losing over 40% of its value this year and triggering contagion fears for other vulnerable emerging markets. The lira had been down as much as 3% today before the central bank announcement. The dip came after President Erdogan, the self-styled ‘enemy of interest rates,’ defied accepted wisdom by calling for a rate cut, decrying interest rates as a ‘tool of exploitation.’

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