Turkey’s economic staff is in a state of disarray due to the successive depreciation of the Turkish lira against the dollar and the euro, which cause rumours over the possible freezing of foreign currency accounts. Foreign analysts are talking about a possible big crisis, with the government responding that it is war signs from those who want to damage Erdogan.
The rumours stirred up things more and many investors appeared very worried so, the BHDK chairman, Mehmet Ali Akben has been forced to deny it, saying “such rumours have no basis. Not even in the 2001 crisis did this happen, the rumours are of no value.”
Concern at the AKP government headquarters is rising, as 31 days before the presidential election, the devaluation of the Turkish currency in one week has exceeded 10% while cumulatively in one month it has exceeded 18%. Essentially, this is the rate at which the Turks have become poorer.
On Tuesday, the dollar / pound exchange rate fell to 4.84 and the depreciation within 24 hours exceeded 3.5%. The euro / Turkish lira has reached 5.66 and the devaluation in one day has exceeded 3%.
Corporate borrowing and trade deficit
The major problem of the Turkish economy is not the public debt, but the private debt of companies and households that, due to the long-term fixed exchange rate, borrowed in a foreign currency.
An example is the new Istanbul airport, which will be inaugurated next October. The project is self-financed and the construction company borrowed from state-owned banks, along with construction costs and payments to the state, there is a cost of $ 25 billion, which is burdened by every single devaluation.
At the same time, fuel and natural gas imports burden the trade balance, despite the increase in exports. The trade deficit in March 2018 showed an increase of 28%, and in April it is estimated to have exceeded 30%; rating agencies observe that immediate action should be taken.
Erdogan does not want an increase in interest rates
Economists say that in order to contain inflation that has grown to 11% and stop the rise in the trade deficit, the central bank will have to raise interest rates, but Recep Tayyip Erdogan, through successive statements, has made it clear that he does not want something like that.
The Central Bank, so far, has been trying to curb devaluation by selling to the market from foreign exchange reserves. Immediately, Finance Minister Nihat Zeybekci sent a message to the Central Bank, saying “the competent authorities should take the necessary measures.” Economists ask for measures and say Turkey is “a breath ahead the edge of the cliff”.
Analysts warn that if the Central Bank of Turkey does not act urgently, raising interest rates by at least 200 basis points, then the Turkish economy will be “a breath ahead the edge of the cliff”. It is threatened with disorderly adjustment and a great economic slowdown, even with a recession, at a time when Erdogan tries to persuade voters to trust him again.
Turkish government: “It’s a war against Erdogan”
Turkish Deputy Prime Minister Bekir Bozdag argued that by “playing” with the dollar exchange rate, some persons are trying to harm the (Turkish) people and to influence the election result. They are wrong. The people know. With God’s help, however, on June 24 (presidential election date) we will make a new start.”
“The exponential rise in the exchange rate of the Turkish pound is a clear indication of a monetary crisis,” Commerzbank analyst Ulrich Leuchtmann told Bloomberg. “The government refuses to see things as they are at this point of the crisis. It’s also part of the usual development of a crisis”, he added.
Turkey’s foreign borrowing costs are charged almost 5 billion Turkish liras (€ 900m) for every devaluated cent of the currency.
Opposition: “We will hit a wall. Economy sinks”
Republican People’s Party (CHP) candidate Muarrem Ince said “we are ready to hit a wall. The economy sinks. I appeal to President Erdogan to directly change his financial advisers, which give him wrong information.”…. / IBNA
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The U.S. Attorney General in Croatia, discusses bilateral anti-terror co-op
The U.S. Attorney General Jeff Sessions visited Croatia where he met with the country’s Interior Minister Davor Božinović, on Thursday.
The two talked about matters of mutual interest “with special emphasis on bilateral and regional security cooperation and continuing training for police officers, prosecutors and representatives of financial and other institutions within the Partnership for Education” programme, HRT reports.
Davor Božinović said “We are cooperating with the United States in the area of the rule of law both bilaterally and through Interpol and Europol. The Directive on the exchange of information on suspicious person will soon come into force in Croatia”, underlining that “transnational organized crime and contemporary security threats, all of which are cross-border in nature, can be opposed if the state attorney’s office, the police and competent agencies cooperate.”
Sessions told the press, that on Thursday he held meetings with the chiefs of police and chief state attorneys of Albania, Bosnia and Herzegovina, Croatia, Kosovo, fYROMacedonia, Montenegro and Serbia. “Police in our countries have been in close contact and partnership for decades. I am really proud to say that these partnerships are still strong today and I believe that we can further improve them with regard to our areas of interest, namely international terrorism, human trafficking and drugs.” …. / IBNA
Main Photo: Croatian Interior Minister Davor Božinović
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The Borg group betrayed the Croatian PM Andrej Plenković
The “Hotmail” affair in Croatia, i.e. published transcripts proving the close relationship between the prime minister Andrej Plenković and a small interest group, the so called Borg group is burdening the political scene in Croatia.
Two Social Democratic Party members of parliament – Peđa Grbin and Siniša Hajdaš Dončić have filed a report against PPlenković with the Conflict of Interest committee, claiming there is conflict of interest.
“We believe that his role, especially ‘in bringing certain partners’ to write ‘lex Agrokor’, evident from emails and media statements”, Siniša Hajdaš Dončić said as cited by HRT.
Hajdaš Dončić noted that “A ministry that is preparing any law must form a certain working group. If they request any opinions, then they pay consultants. We believe that they avoided forming a working group and engaged people who were later paid exclusively from Agrokor.” In his opinion, “lex Agrokor” will influence Croatia’s budget to a great extent…. / IBNA
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Venice Commission experts try to resolve an electoral issue in BiH
After several useless meetings about necessary changes of the BiH Election law, the Federation of Bosnia and Herzegovina politicians, Croats and Bosniaks agreed on one thing – they are not able to solve that issue without help from third party experts. Therefore, they contacted the European Commission for Democracy through Law, known as Venice Commission, to send experts in order to provide necessary help.
As it is defined, the role of the Venice Commission is to provide legal advice to its member states and, in particular, to help states wishing to bring their legal and institutional structures into line with European standards and international experience in the fields of democracy, human rights and the rule of law. This means that Commission experts are not suggesting a solution and their role is to offer guidelines for further negotiations that will result in Election law changes in accordance with EU legal practices.
Over the past three days, the Venice Commission’s representatives held several meetings with representatives, but not leaders, of political parties and the Central Election Commission, focusing on the issue of filling the seats in the FBiH House of Peoples.
Two years ago, the BiH Constitutional Court ruled that some provisions of the Election Law are not in accordance with the BiH Constitution. The result was that two sections of the Law, which treat the matter of representation in the House of Peoples of the Federation of Bosnia and Herzegovina (FBiH), were deleted. The problem is located in Federation BiH but not in the Republika Srpska that does not face similar election issues.
According to the Vice President of the Party of Democratic Action (SDA) Šefik Džaferović, who participated at the meeting on Thursday morning, the number of disputable issues has narrowed down to the problem of House of Peoples and this matter should be solved at the level of political parties’ leaders and the Venice Commission’s experts. The meeting of Venetian Commission experts and party leaders is scheduled for next month.
“It would be normal if the Election Law was amended before the election process, but a possibility of doing that after the election process opens is not ruled out in BiH”, said Džaferović.
BiH Social Democrat Party (SDP BiH) representative, Zoran Mikulić, on the other hand, said the reaching of the solution was on the parliamentarians. According to him, the problem solution lies in an entity law at the FBiH level.
Democratic Front (DF) representative, Damir Bećirović, confirmed it was said during the meeting that the matter could be solved at entity level. He stressed, however, that no change should be passed contrary to the FBiH Constitution.
The electoral system in BiH is one of the most complicated in the world because three constitutive nations (Serbs, Bosniaks and Croats), along with a category of “Others” elect ten assemblies in cantons, two assemblies at entities’ level and the assembly at state level. At the same time, voters elect three members of BiH Presidency, the President of Republika Srpska and two RS vice presidents. This creates the chance for misusage and the Federation BiH House of Peoples is the most radical example. Basically, the change of the law should prevent Bosniak voters (majority) to elect Croat (minority) representatives as, the former want people loyal to Bosniaks…. / IBNA
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Report: Patients suffering from mental illnesses in Albania are kept in degrading conditions
The conditions under which patients suffering from mental illnesses in Albania are considered to be inhumane and degrading. This is the conclusion of the report issued by the Council of Europe for the Prevention of Torture and Inhumane and Degrading Punishment, despite the recommendations that have been made in several occasions since the visit of a delegation of this institution in Albania in 2000.
Meanwhile, according to the report, there is also an inadequacy of psychic care, calling on Albanian authorities to draft a detailed plan for the creation of a Legal Psychiatric Hospital.
On the other hand, the report points out that the treatment that police give to reprehended people has seen a significant improvement, adding that there are still police stations offering very poor conditions. /ibna/
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The Church will not determine the government’s policy on Kosovo, Vulin says
“Serbian Orthodox Church (SPC) is among our most respected institutions and we will pay attention to its recommendations on Kosovo and Metohija; however, these recommendations will not determine the government’s policy”, said Defence minister Aleksandar Vulin. According to media accounts, SPC has previously “warned the political leadership of the country not to refrain from the Kosovo issue, calling it the ‘heart of Serbia’ “.”We owe SPC attention, respect and gratitude for everything it did throughout history, but Serbia is a secular state in which politicians, chosen by the people through elections, (are the ones who) make decisions”, Vulin told Pink TV.”The Church gives recommendations and we must pay due respect to that. Will that (recommendations) determine the government’s policy in a sense that there is only one option which we must follow (and no alternative to choose from)? No, it will not”, said the minister.Vulin added that president Aleksandar Vucic also has “sincere and great respect” for what SPC does.”What must be understood, however, is that the Church has its (own) stance regarding Kosovo and Metohija which must not be unconditionally accepted”, he went on.
Dacic: Serbia should find a lobbyist
Foreign minister Ivica Dacic has said that Serbia should find “some lobbyist” to defend its interests in resolving the Kosovo issue, as soon as possible. “The objective has to be to reach those who make decisions – which is the United States president Donald Trump – to get their support”, Dacic told Blic daily.
Dacic claimed that 173 countries have “lobbyist contracts” with American agencies. “The point is that such a contract should be transparent”, he went on.He said that the previous cabinets have signed such a contract with Podesta Group at the price of 100,000 US dollars per month. “However, Podesta Group later began to lobby for Albanians… They proved themselves dishonest”, Dacic concluded…. / IBNA
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