ANALYSIS
"Erdogan's Visit to Germany: We Can Take Refugees Even If You Don't Sell Eurofighter", by Ahmet Baransu, Institute for Diplomacy and Economy
President Erdogan's visit to Germany on November 17 topped the agenda of both countries. During his visit, Erdogan met with German Chancellor Scholz and President Steinmeier. Although Chancellor Scholz invited him, Erdogan was clearly an unwelcome guest for many political opponents and politicians in Germany.
In the shadow of the discussions before the visit, Erdogan and Scholz engaged in discussions on various topics, including the Israeli-Palestinian Crisis, Turkey's EU membership, trade and military relations, and the EU-Turkey Migration Agreement.
During the meeting, Erdogan stated that he had not made any request to Chancellor Scholz for the procurement of "Eurofighters." He also said that if Germany does not change its stance on selling these fighter jets, Turkey has other alternatives, and they are not obliged to buy them.
Interestingly, the day before Erdogan's visit to Germany, Yasar Guler, the Minister of National Defense, revealed the government's plans to acquire 40 Eurofighter Typhoon fighter jets produced by a consortium of Germany, Britain, Italy, and Spain. He announced that the UK and Spain had given the green light, and they were trying to convince Germany. In the upcoming period, positive developments in this regard are of great importance to Turkey's military capabilities.
During the joint press conference, the reason why Prime Minister Scholz turned a blind eye to Erdogan's populist statements on Gaza can be linked to the "EU-Turkey Migration Agreement."
Anticipating that they will sooner or later face a humanitarian crisis in Palestine and the refugee problem created by this crisis, German officials expect, among others, a huge wave of migration influx from Palestine after the events in Gaza. The refugee issue is an urgent concern for Chancellor Scholz. Scholz likely has struck a bargain with Erdogan to tackle irregular migrants. If the two countries have reached a compromise on this issue, this means that Turkey will host more refugees in the upcoming period. We can attribute Erdogan's speech, with a plum in his mouth during the press conference, to Germany's need for Turkey to address the refugee issue.
"Inside Hamas’s sprawling financial empire", The Economist
Millions of dollars flow to Hamas through crypto markets. “You’d be surprised how much of the market’s activity comes back to [Hamas],” says Firuze Segzin, an economist at Bilkent University in Turkey. America’s Treasury Department says Hamas has smuggled more than $20m through Redin, a currency exchange crammed among tourist shops deep in Istanbul’s run-down Fatih neighbourhood.
Today, while Hamas’s politicians favour Doha, the capital of Qatar, and its companies range from Algeria and Sudan to the UAE, its financiers live in Istanbul. Zaher Jabarin, accused by Israel of running Hamas’s finances (which he denies), is based there, as are several other individuals under sanctions by America for funding the organisation. Eager to garner regional influence by supporting the Palestinian cause, Recep Tayyip Erdogan, Turkey’s president, offers shelter. Israel says that the Turkish government hands out passports (which it denies) and lets Hamas keep an office in the country.
Meanwhile, Turkey’s banking system helps Hamas dodge American sanctions by conducting complex transactions across the world. A booming, lightly regulated crypto market makes things even easier. Many of Turkey’s biggest banks, including Kuveyt Turk, have been accused by Israel and America of knowingly storing Hamas’s cash. Some murmur that Mr Erdogan quietly approves. In 2021 the Financial Action Task Force, a G7 watchdog, placed Turkey on its “grey list” of countries doing too little to freeze terrorists’ assets.
No one benefits more than Hamas’s businessmen. The Turkish government’s tacit approval “opens doors and makes things smooth in business”, says one of the group’s finance employees. Trend GYO, an Istanbul-listed firm that has been placed under sanctions by America for funneling funds to Hamas, won an official contract to build Istanbul Commerce University. Construction companies, which feature heavily in Hamas’s portfolio, can quietly swallow huge lumps of cash and often receive large loans. All this enables Turkish officials to protest that they are not directly lining Hamas’s pockets.
For Israel, the prospect of Hamas growing richer despite the war would be a bitter failure. With its wealth and financial roots intact, Hamas—or a similar organisation—might re-emerge and flourish anew from the destruction. While Gazans have been plunged into tragedy, Hamas’s money is safely ensconced elsewhere—and its financiers can eat lobster as they gaze across the Bosporus.
"Establishing a balanced “Give-and-Take” in energy diplomacy of Turkey" by Mehmet Ogutcu, Yetkin Report
Considering Turkey’s total economic size, which is expected to surpass $1 trillion for the first time this year, it allocates approximately 10 percent to energy imports. The share of energy imports in total imports is also high, accounting for 20 percent, with petroleum and natural gas constituting 50 percent and 40 percent, respectively, within energy imports. This significantly affects the balance of payments and trade deficit.
The heavy dependence between buyers and sellers not only opens the door to negotiations in the energy field but also extends to political, security, and commercial matters, resembling a “give-and-take” style of bargaining. Large-scale projects, such as the purchase of major weapons systems, orders for passenger planes from BOEING or AIRBUS, and the construction of nuclear power plants costing billions of dollars, do not materialize without obtaining other values and concessions in return.
Therefore, Turkey should make special efforts to create direct or indirect business opportunities in producer and seller countries such as Russia, Iran, Iraq, Libya, Azerbaijan, Kazakhstan, Turkmenistan, Algeria, and Qatar, where it annually incurs tremendous expenses for energy and resource supply.
The presence of Turkish state and private sector companies in Azerbaijan is incomparable. Tremendous opportunities can be created in investments related to oil, natural gas, petrochemicals, pipelines, trade, transportation, sales, and even joint projects in Iraq, Libya, the Eastern Mediterranean, and the Black Sea. Achieving this requires SOCAR to act proactively, which, of course, is not possible without the intervention and green light of the leaders of both countries.
The same approach should be taken with SOMO, KMG, the Libyan National Oil Corporation, the Iranian National Oil Company, Gazprom, Rosneft, TürkmenGas, Mubadala, ARAMCO, and others.
In my opinion, there is no better time than today to creatively and dynamically turn energy diplomacy into tangible actions based on investment and trade partnerships, following the “win-win” principles.
LEADERS ON THE MOVE
Minister Fidan, alongside other Foreign Ministers appointed by the Extraordinary Joint Summit of the Organization of Islamic Cooperation and the Arab League, will convene with the Spanish Minister of Foreign Affairs, Jose Manuel Albares Bueno, to discuss the latest developments in Gaza.
POLITICS
Turkish political leaders object to Erdogan's proposal to simply presidential elections
Opposition leaders in Turkey expressed concerns and objections to President Recep Tayyip Erdogan's proposal to amend the Constitution, aiming to make it easier to elect the president by removing the requirement for an absolute majority.
Devlet Bahceli, an ally of Erdogan and the leader of the far-right Nationalist Movement Party (MHP), was the first to object, emphasizing the importance of an absolute majority in the presidential election. He said that 50 percent+1 is the backbone, the core and security of the system.
Ozgur Ozel, the leader of the main opposition Republican People’s Party (CHP), accused the ruling Justice and Development Party (AKP) and the MHP of monopolizing the nation’s agenda with talks of constitutional changes. He declared that his party would not support any such amendment.
Tuncer Bakirhan, co-chairperson of the pro-Kurdish Peoples’ Equality and Democracy Party (HEDEP), criticized the AKP and MHP, stating that they are undermining a system they established only five years ago, warning that a system not considering people's needs is destined to fail.
Meral Aksener, leader of the Good Party, highlighted that she had previously warned Erdoğan about potential problems with a presidential system in 2017, and now those concerns are surfacing.
Ahmet Davutoglu, leader of the Future Party, and Felicity Party leader Temel Karamollaoglu also voiced objections during a joint parliamentary group meeting. While Davutoglu emphasized that changes to the state's structure and rules should not be arbitrary, Karamollaoglu accused Erdogan of acting arbitrarily in state affairs.
Far-right party leader reveals secret deal with former main opposition leader
On November 23, the leader of the far-right Victory Party (ZP), Umit Ozdag, publicly revealed details of a secret deal between him and presidential candidate Kemal Kilicdaroglu before the second round of the election in Turkey.
Ozdag shared that the agreement, made before the second round of the election, included the allocation of the Ministry of Interior and two other ministries to the ZP, along with deputy ministerial roles in security, justice, and the economy. He also asserted that decisions on appointments to these positions would be made jointly with him.
This revelation has sparked widespread disappointment and criticism among Kilicdaroglu's political allies and supporters and strong reactions from Kurdish activists and pro-Kurdish political figures.
Turkish Supreme Court rejects pro-Kurdish party's name change
The Chief Prosecutor’s Office of the Supreme Court of Appeals rejected the name change request of the pro-Kurdish Green Left Party (YSP), which renamed itself the Peoples’ Equality and Democracy Party (HEDEP) in October during a party congress in Ankara.
The court cited the similarity of the acronym HEDEP with the People’s Democracy Party (HADEP), another pro-Kurdish party closed down in 2003 on terrorism charges, as the reason for refusal. HEDEP has been advised by the court to alter its acronym.
On November 24, Aysegul Dogan, spokesperson for the HEDEP, announced that the party would change its abbreviation while retaining the party's name.
ECONOMY
Turkey's Central Bank surprises with 500-point rate hike to 40%
On November 23, Turkey's central bank surprised the markets by raising its policy rate by a significant 500 basis points to 40%. The bank stated that as the rate approaches its peak, the pace of monetary tightening will slow down. In a post-meeting statement, the bank expressed confidence that the current level of monetary tightness is close to what's needed to establish a disinflationary trend.
According to central bank officials, there's a noticeable influx of funds into the Turkish lira from major corporate investors on the U.S. West Coast, and discussions with foreign funds suggest this trend will persist.
The President of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, said that Turkey's policy rate would need to remain high for an extended period to rebuild confidence effectively.
Government rejects banks' request for inflation-adjusted accounting due to potential revenue losses
Turkey's government turned down a request from banks to implement the inflation-adjusted accounting method due to concerns about potential tax revenue losses ranging from 70-80 billion lira (up to $2.8 billion), as reported by bankers to Reuters.
Treasury and Finance Minister Mehmet Simsek had previously mentioned that private-sector companies would adopt this method, leaving room to exclude banks. Despite lobbying from banks, with assets totaling 21 trillion lira ($737 billion) in September, the Treasury recently rejected their proposal to utilize inflation-adjusted accounting.
Typically, this accounting method helps shield lenders from higher taxes and provides a more realistic performance picture, especially in an economy with a high annual inflation rate, expected to rise in the following year.
Over 17.6 million in need of social assistance in Turkey
During parliamentary discussions on the 2024 budget of the Family and Social Services Ministry, it was revealed by the daily Birgun that around 17.6 million people in Turkey are currently in need of social assistance. Minister Mahinur Ozdemir Goktas announced that in 2023, 4.4 million households benefited from social assistance, with 3.5 million receiving regular aid. These figures mark a notable increase from 2018 when Turkey transitioned to a presidential system where 3.5 million households received social assistance.
The ministry allocated 91.6 billion Turkish liras ($3.2 billion) in 2023 to combat poverty, a significant rise from 62.7 billion liras in 2022. The budget for 2024 is projected to reach approximately 205.9 billion liras.
HUMAN RIGHTS
Turkey among top countries requesting content removal from Google
A virtual private network company Surfshark report revealed that Turkish government agencies have made 90,400 requests to Google to remove web pages and content over the past decade. Turkey ranks as the fourth country globally, following Russia, North Korea, and India, in making the most removal requests to Google.
In the last 10 years, 150 countries have submitted 335,000 removal requests, targeting 3,870,000 websites and pages considered "objectionable." Turkey's 18,900 removal requests targeted 90,400 pieces of online content, averaging approximately 5 requests per day.
The most common reasons cited by governments globally for content removal are "national security" (27 percent), "copyright" (19 percent), and "defamation" (10 percent). Turkey leads in citing defamation, accounting for over a fifth of all defamation claims with more than 7,600 requests.
FOREIGN POLICY
Turkey notifies NATO of delay in Sweden's membership approval ahead of alliance meeting
On November 22, sources told Reuters that Turkey informed NATO that the ratification process for Sweden's membership bid would not be finalized until the accession ceremony scheduled during the alliance foreign ministers' meeting in Brussels on November 28-29.
The Turkish parliament's foreign affairs commission recently postponed a vote on Sweden's NATO membership bid to allow for additional discussions. According to the source, the commission is expected to resume its debate on November 28 or 29.
Turkey explores acquisition of Eurofighter Typhoon jets amid uncertainty over F-16s purchase
A source from the Turkish defense ministry revealed that Turkey has initiated discussions with European nations to purchase 40 Eurofighter Typhoon jets due to potential challenges in securing F-16 jets from the United States.
The Turkish defense ministry and the British Embassy in Ankara confirmed that Defense Minister Yasar Guler discussed the issue with his British counterpart, Grant Shapps, in Ankara on November 23. While F-16s are the first choice, the source said that the Eurofighter Typhoon is a suitable alternative given the extended process with the F-16s and that Turkey aims to procure the most advanced, newly built version of the Eurofighter. The source also added that UK officials expressed willingness to help persuade Germany to withdraw their objections.
The British Embassy in Ankara confirmed that the two ministers also signed a statement of intent on defense cooperation, aiming for closer collaboration between the defense industries of both countries and other related areas.
Russia and Turkey near agreement on gas hub
On November 25, Russian Deputy Prime Minister Alexander Novak announced that Moscow and Ankara are on track to finalize an agreement to establish a natural gas hub in Turkey soon. He highlighted the close collaboration between Russia's Gazprom and Turkey's Botas, emphasizing ongoing discussions about the project roadmap.
The initiative stems from Russia's proposal last year to create a gas hub in Turkey to compensate for lost sales to Europe.
Top US Treasury official to visit Turkey for talks on sanctions against Russia and Hamas Activities
A senior US Treasury official, Brian Nelson, is set to visit Turkey next week for discussions on American sanctions against Russian entities and the financial activities of the Palestinian militant group Hamas, Bloomberg reported.
Nelson, the Treasury Under Secretary for Terrorism and Financial Intelligence, is expected to meet with Turkish counterparts during his second visit to Ankara this year. The talks aim to seek Turkish compliance with US sanctions targeting certain Russian entities and address concerns about Hamas's financial activities.
Last month, the US Treasury expanded its list of sanctioned individuals in Turkey, alleging ties to Hamas, designated as a terrorist organization by the US and the European Union.
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