ANALYSIS
"The Cracks in CHP: The Breaking of the Fellowship?" by Hasim Tekines, Institute for Diplomacy and Economy
Turkey's main opposition party, CHP, has not yet recovered from the trauma of its recent election defeat. Despite the challenges posed by President Erdogan's extensive access to public resources for campaigning, his complete control over the media, and various election manipulations, it was a notable achievement for Kilicdaroglu to secure 48% of the votes. However, a segment of the opposition holds the view that Kilicdaroglu, who has been leading the party for 13 years, cannot fully realize the CHP's potential. This discrepancy between expectations and reality is causing instability within the CHP's leadership.
After the defeat, Kilicdaroglu is reluctant to step down, at least not before the local elections in 2024. He sees himself as a "safe harbor" to anchor the party for upcoming elections. While the recent elections were a devastating defeat according to Istanbul's popular mayor, Ekrem Imamoglu, and many others, Kilicdaroglu believes that he has transformed the CHP into a mass party, increasing its vote share from 20 percent to 48 percent by uniting 25 million voters. From his perspective, Kilicdaroglu sees the last ten years as a success story for the CHP's performance.
The gap between expectations and reality continues to shake the CHP, weakening Kilicdaroglu's authority and hierarchy within the party. Critics within opposition media outlets have intensified their scrutiny of Kilicdaroglu, and he faces stronger and younger rivals. However, he remains determined to hold onto his position. Regardless of who assumes the role of the new CHP leader, their influence on Turkish politics in the years to come will be substantial.
"Sweden Is Doing Fine in NATO's Waiting Room" by Elisabeth Braw, Foreign Policy
NATO headquarters has been dispatching a steady stream of solidarity-laden messages, always stressing Sweden's participation in its various undertakings (including a North Atlantic Council meeting this month). U.S. and other officials, for their part, haven't tired of mentioning Sweden in every discussion with Turkey and other NATO member states. Sweden is playing a starring role in the alliance.
The most painful disadvantage for Sweden as it continues its wait on NATO's doorstep may instead be its exclusion from the alliance's operational planning—and that's why NATO and some of its members are taking such pains to communicate how closely Sweden is already working with them.
It's a signal to Turkey and to any other NATO member state that may be inclined to try to squeeze concessions out of future accessions that such attempts might be frustrating but they're not fatal. If Sweden can enjoy a highly tolerable existence on NATO's doorstep, denying it membership won't force it to make concessions.
How many more U.S. bombers will land in Sweden before Erdogan decides he'll grant his fiat lux? How much NATO stratcom will feature Sweden as its protagonist? How many exercises will demonstrate Sweden's crucial role within the alliance's wider family? The goodwill will keep flowing—because it has to. Quite without anyone having planned it, Sweden is getting favorite child treatment. It may not look like it at the moment, but Sweden has won the NATO lottery.
"Erdoganomics is spreading across the world", The Economist
Since the election Turkey's monetary policy has become a little more reasonable, as interest rates have been raised. This has not stopped Mr. Erdogan's ideas catching on in the finance ministries of the developing world. "I truly wonder whether classical theories are the way to continue," muses Ken Ofori-Atta, Ghana's finance minister, who is one of several African ministers pondering such ideas. "We have to get rates low and growth going," shrugged another at a recent summit on green finance in Paris.
In the past month, officials in Brazil and Pakistan have expressed similar sentiments. Rather than looking at sky-high inflation, a floundering currency or fleeing investors, these ministers focus on Turkey's GDP growth, which has been remarkably resilient, reaching 5.6% last year. They are sceptical of warnings that such a state of affairs is unsustainable, owing to stalling productivity, which ultimately determines long-run growth, and depleted foreign reserves.
The problem comes with assuming Mr. Erdogan's policies will help. If high rates are diluted by foreign lenders and informal borrowers, so are low ones. Ms. Gopinath's research is reason to doubt ultra-doveish monetary policy can produce growth, but it does not support the idea that it can cut inflation, either, contra Mr. Erdogan. If she is correct, officials need to focus on cutting the risk premium on foreign borrowing to strengthen the impact of monetary policy on the economy. To do this, they must convince investors to take them seriously, which means keeping deficits in check and finances stable, not jumping on the bandwagon of outlandish theories. Mr. Erdogan's experiment is best left in its trial phase.
"Turkey says it busted Israeli Mossad spy ring targeting Hezbollah, others" by Amberin Zaman, Al-Monitor
Turkey's counter-intelligence services detained seven people who allegedly confessed to spying on behalf of Israel, part of a massive espionage ring targeting the likes of Lebanon's Hezbollah militant group, whose tentacles extended beyond Turkey to Sweden, Jordan, Thailand and Syria, Turkish media reported Monday.
The pro-government Daily Sabah said Turkey's national spy agency, MIT, had uncovered 56 operatives linked to nine separate networks who gathered "biographical intelligence" on foreign nationals, hacked into their communication devices and tracked their vehicles. Daily Sabah named one Israeli of Arab origin called Soliman Agbaria as one of the ringleaders.
Israel's Mossad intelligence agency allegedly sent ethnic Arab assets in Istanbul to Lebanon and Syria to establish the locations of Lebanese Hezbollah, notably in Beirut's Hrair Hreik municipality, with the aim of striking them with drones. All of their activities were orchestrated from Tel Aviv, Daily Sabah claimed.
It remains unclear what impact, if any, the latest case will have on Ankara's efforts to repair its frayed relationship with the Jewish state. There were earlier reports in the media that Israeli Prime Minister Benjamin Netanyahu would be meeting Erdogan this month in Turkey.
POLITICS
Imamoglu launches "Change for Power" Initiative to foster transformation in CHP
Istanbul Mayor Ekrem Imamoglu, a prominent figure in Turkey's main opposition party, the Republican People's Party (CHP), initiated discussions on "change" following the party's electoral defeat in May. He recently launched a website called "Change for Power" and invited individuals to participate in the discussions within the CHP and towards achieving political power.
The website acknowledges the current ineffective opposition structure and emphasizes the need for a rational approach to shape the future of Turkey, with the CHP playing a crucial role in bringing about change. Citizens are encouraged to share their opinions and suggestions through the platform.
Although Imamoglu advocates for change, he has not explicitly called for the resignation of party leader Kemal Kilicdaroglu, nor has he announced his candidacy.
Opposition's Felicity Party and Future Party unite to form a joint parliamentary group
Opposition parties Future Party and Felicity Party formed a joint parliamentary group consisting of the parliamentary deputies of the two parties. The alliance was announced on July 6, with the group being established as the sixth parliamentary group.
Both parties secured 10 MPs each in the May 14 elections under the Nation Alliance, requiring a minimum of 20 MPs to form a parliamentary group. The parties will maintain their identities, and Selcuk Ozdag from the Future Party will serve as the group chair. The first group meeting is scheduled for July 11, where both party leaders will address the members.
The DEVA Party, also part of the Nation Alliance, declined to transfer MPs to form a group due to concerns about confusion, governance issues, and the preservation of party self-identity.
Former CHP lawmaker announces candidacy for party leadership
In an interview with journalist Ismail Saymaz, former CHP lawmaker Ilhan Cihaner declared his candidacy for CHP leadership in the upcoming general congress, expressing the desire for a more leftist direction. Cihaner has criticized Kemal Kilicdaroglu's leadership for a long time, stating that CHP is leaning towards the right wing and questioned the alliance with the far-right anti-immigrant Victory Party in the presidential elections.
He also emphasized the need for change within the party, with or without Kilicdaroglu, to avoid defeat in the 2024 local elections. Cihaner previously attempted to run for the leadership post in the 2020 Congress but fell short of the required signatures.
ECONOMY
The lowest civil servant salary reaches 22,000 Turkish liras
The Turkish government proposed raising the lowest civil servant salary to 22,000 liras following the release of the official inflation rate. The bill submitted to parliament comes after the six-month inflation rate was reported as 19.77% in June.
The increase would provide civil servants with a raise of 17.55% and an additional monthly payment of 8,077 liras. The average civil servant salary is expected to rise to 25,015 liras, compared to the previous average of 14,417 liras.
The proposal does not address pensioners; their situation will be reviewed based on inflation figures. Pensioners, including those under the BAG-KUR and other pension funds, will receive an increase of 19.77% and an additional welfare share determined by the government.
Government raises tax rates to address budget deficit
On July 7, the Turkish government raised tax rates, including value-added tax (VAT) and consumer loan taxes, to reduce the budget deficit. The VAT on goods and services increases from 18% to 20%, while the tax on basic goods like toilet paper and detergents rises from 8% to 10%.
President Tayyip Erdogan signed several changes into law, including an increase in the Bank Insurance and Transaction Tax on consumer loans from 10% to 15%. Previously, the government doubled the motor vehicles tax (MTV) and increased the general corporate tax from 20% to 25%. Additionally, the registering fee for imported mobile phones rises significantly by 228% to 20,000 lira.
The budget deficit for the first five months of the year amounts to 263.6 billion lira ($10.21 billion), higher than the 124.6 billion lira deficit recorded a year ago. Economists estimate that the increased VAT rate will generate approximately 30 billion lira in state revenues.
Turkish Treasury and Finance Minister Mehmet Simsek stated that the recent tax increases implemented by the government are intended to address the expanding current account deficit. In a tweet on July 9, Simsek explained that the National Solidarity Package, being discussed in parliament, aims to partially mitigate the impact of the additional costs resulting from the earthquakes. He further noted that the new regulations would implicitly contribute to maintaining control over the current account deficit.
Turkey plans corporate tax increase to fund earthquake rebuilding
The government plans to increase corporate taxes to finance the reconstruction efforts following the major earthquakes in February.
President Erdogan's ruling AK Party presented a draft law to parliament, outlining several tax hikes to generate the necessary funds. The proposed changes include raising corporate tax from 20% to 25% and increasing corporate tax for banks and financial institutions from 25% to 30%. The bill also includes incentives to promote foreign trade, such as a five percentage point corporate tax discount for companies' export income.
Additionally, the draft law suggests transferring the treasury-managed portion of the foreign exchange-protected lira deposit accounts scheme to the central bank.
Turkey expects initial $10 billion direct investments from Gulf countries during President Erdogan's visit
Turkey anticipates initial direct investments of around $10 billion from Gulf countries as part of President Erdogan's upcoming trip to Saudi Arabia, Qatar, and the United Arab Emirates. The visit aims to secure foreign funding to bolster the Turkish economy following Erdogan's re-election in May.
While deals are still being finalized, the officials who requested anonymity due to the talks' private nature said that investments of up to $30 billion are expected over a longer period, primarily in Turkey's energy, infrastructure, and defense sectors. The officials emphasized the importance of these initial investments, with high expectations for the Gulf visit and the signing of significant agreements.
HUMAN RIGHTS
Court of Cassation prosecutor opposes Can Atalay's release
The chief public prosecutor's office of the Court of Cassation issued its opinion on the Gezi Park case, recommending the approval of convictions for all defendants except architect Mucella Yapıcı. The prosecutor's written opinion states that there is insufficient evidence to prove Yapıcı's involvement in the alleged crimes.
Additionally, the prosecutor advised against the release of defendant Can Atalay, who was elected as a parliamentarian in the May 14 elections, citing his conviction for attempting to overthrow the government, which makes him ineligible for parliamentary immunity. The final decision now rests with the Court of Cassation's 3rd Penal Chamber.
TELE1 TV faces broadcast suspension and fine over Yanardag's remarks
Turkey's media regulatory authority, RTUK, imposed a seven-day broadcast suspension and a fine equivalent to 5% of TELE1 TV's gross advertising revenue for allegedly "glorifying terrorists."
The penalties are related to the editor-in-chief's remarks about Abdullah Ocalan, the imprisoned leader of the PKK, during a broadcast in late June. Yanardag's remarks, criticizing the denial of access to lawyers and family members for Ocalan, led to investigations against him and the outlet. Yanardag was subsequently arrested on charges of "spreading terrorist propaganda" and "praising criminals" after his speech has been circulated on social media.
FOREIGN POLICY
Jordan's Foreign Minister Safadi holds talks with Turkish counterpart
Jordan's Foreign Minister Ayman Safadi became the first foreign minister to be officially hosted by Turkey's new Foreign Minister Hakan Fidan, following his visit to Damascus. The two ministers met in Ankara on July 4 to discuss bilateral and regional issues, with a focus on the Syria issue.
During a joint press conference, Safadi expressed support for Ankara's proposal to establish an international fund to facilitate Syrians' voluntary and safe return to their homeland. He emphasized the international community's responsibility in this matter.
Safadi also met with Turkish President Recep Tayyip Erdogan, where he reiterated Jordan's commitment to finding a political solution for the humanitarian, security, and political crises in Syria.
Fidan affirmed that Turkey and Jordan would continue their coordination on the Syrian issue and emphasized the importance of regional stability for the return of Syrians.
Egypt and Turkey appoint ambassadors after decade-long breakdown
Egypt and Turkey announced on July 4 the appointment of ambassadors to each other's capitals for the first time in a decade, signaling a restoration of diplomatic relations.
The breakdown in relations occurred in 2013 when Egypt's then-army chief ousted Mohamed Mursi, an ally of Ankara. Egypt expelled Turkey's ambassador and accused Ankara of supporting groups aimed at undermining the country. However, in May, the presidents of both countries agreed to reinstate ambassadors.
Amr Elhamamy will serve as Egypt's ambassador in Ankara, while Salih Mutlu Sen has been nominated as Turkey's ambassador in Cairo.
Turkey and Greece agree to restart confidence-building talks
Turkey and Greece agreed to restart confidence-building talks halted in 2022, as the Turkish Defense Ministry announced on July 5. The decision was made during a congratulatory phone call between Turkish Defense Minister Yasar Guler and his Greek counterpart Nikos Dendias.
The ministers agreed to resume the discussions on confidence-building measures, and further details will be addressed during NATO's Vilnius summit next week. Both sides also expressed the intention to maintain open channels of dialogue.
British PM calls Erdogan to speed up NATO ratification of Sweden's membership
British Prime Minister Rishi Sunak expressed his hope to Turkish President Erdogan that NATO would swiftly ratify Sweden's accession to the alliance. During their conversation on July 7, they discussed various topics, such as Ukraine, bilateral relations, and combating illegal immigration.
Sunak highlighted the positive advantages of Sweden joining NATO and acknowledged the steps taken by Sweden to address Turkey's legitimate security concerns. Sunak also emphasized the importance of expedited ratification of Sweden's NATO membership before the upcoming NATO summit.
Erdogan urges Russia to extend Black Sea grain deal; to host Putin in August
Turkish President Erdogan announced that he urges Russia to extend a Black Sea grain deal by at least three months. During a joint news conference with Ukraine's President Volodymyr Zelenskiy on July 7, they discussed the fate of an arrangement facilitated by Turkey and the United Nations. This arrangement enables the safe export of grain from Ukrainian ports via the Black Sea, even during the ongoing war.
Erdogan stated that efforts are underway to extend the deal beyond its current expiration date of July 17 and for longer durations. The grain deal will be a key topic on the agenda when President Putin visits Turkey in August. When asked about Putin's potential visit, Kremlin spokesman Dmitry Peskov mentioned that contacts are possible, but no specific dates have been confirmed yet.
Zelenskiy brings back Azovstal Commanders from Turkey, Russia criticizes release
Ukrainian President Volodymyr Zelenskiy brought back five former commanders of Ukraine's Mariupol garrison from Turkey. This move has significant symbolism but has been criticized by Russia, claiming it violates a prisoner exchange agreement from last year.
Russia had previously released some of these commanders in September as part of a prisoner swap facilitated by Turkey, with the condition that they remain in Turkey until the end of the war.
Moscow expressed its displeasure, stating that it was not informed about their release and accused Turkey of succumbing to pressure from NATO allies ahead of an upcoming summit.
Zelenskiy, on the occasion of the 500th day of the war, visited Snake Island in the Black Sea, which was seized by Russian forces during the invasion but later abandoned. Zelenskiy expressed gratitude to Turkish President Tayyip Erdogan for his assistance in securing the commanders' release and vowed to bring back all remaining prisoners.
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