The analysis Chatham House scared of Turkey: the economic collapse will work at the stage

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Previously, a senior official at the World Bank experts, noting the possibility of becoming unable to pay the external debt of giant corporations, "In such a situation a crisis in the financial system in Turkey and a deep and take provoking plus an economic recession "expressed his opinion. [19659004] Hakuraa in time, "Turkey goes to the economic crisis with steps under way" article published under the title as follows:

President Erdogan of Turkey, 15 days after the parliamentary elections and presidential by the constitution in Turkey, he was given appointed a new government with broad powers.

"His inexperienced mother-in-law named Berat Albayrak Minister of Finance and Treasury"

] More importantly, Erdogan told his former deputy prime minister and former chief economist of Merrill Lynch Mehmet Şimşek, his finance and treasury minister, instead of his inexperienced son-in-law, Berat Albayrak.

Erdogan will give priority to short-term growth regardless of the cost of macroeconomic and financial stability, regardless of the size of the economy. This includes stopping double-digit inflation which is growing out of control, and dropping interest rate hikes needed to support the Turkish lira, which has lost nearly 20% this year.

"The Central Bank was Politicized"

Erdogan, with his earlier promise, was able to support the Central Bank He received a resolution that he issued his authority for appoint its chair, assistants and members of the Monetary Policy Council to its four-year term. The process of politicization of the Central Bank, which was once a respected and independent institution, has been completed by this movement. This change is also in line with the unusual outlook that Erdogan's high interest rate in monetary policy equates to high inflation.

"The Audi style economy, Ferrari style growth"

Erdogan sees progress equal to mirrored skyscrapers, flashy giants infrastructure projects and high growth numbers. Audi's average economy-style Turkey, to bring their Ferrari-style growth rate in the upper segment becomes the gas is squeezed. However, as any mechanic knows, such tactics have no chance of succeeding in the long run. Since the end of the engine.

Erdogan, Turkey's richest economies in the growth model in order to jump to the league does not accept the fact that deep changes to achieve. This growth model relied heavily on infrastructure and sustainable private investment and exports, as well as on government-financed and construction-financed infrastructure projects, as well as on cash-flow-financed consumer spending. speculative.

Net result: The foreign exchange debts of the business world, breaking the record at the end of 2017, reached 328 billion dollars. Even after the loss of assets in foreign currency, it was still worrying $ 214 billion. The stock of debt in dollars and euros has doubled since 2008, and 80% of this stock is in the hands of domestic banks. When this heavy balance of payments, taking into account the conditions, in order to prevent the emergence of foreign assets of Turkey, it would be necessary to think in the short or medium term to bring the control of capital n 39; is not a remote possibility.

It is not surprising that some of the large Turkish companies, whose financial burden has increased due to the depreciation of the lira, have begun negotiations with their buyers to restructure their large external debts. If you become large Turkish companies can not pay a significant portion of its external debt, which is reflected in the general economy of Turkey, leading to mass consumer panic, shaken confidence international financial markets and Turkey to a crisis in the financial system and from a depth and take provokes more an economic recession. [19659004] Erdogan's nationalist MHP ally revealed his hand by refusing to take part in the decision. MHP leader Devlet Bahçeli had to learn a lesson from the financial crisis that erupted in 2001, when he was one of the partners in the tripartite coalitions. So, rather than taking the risk of coloring with the responsibility of an economic crisis, he chose to act outside.

"Economic deterioration heel of Achilles Erdogan"

President's Turkey, regardless of spills, sui generis management approach double fold. Regardless of political dominance, the deformed economy is the biggest threat to Erdogan's ascetic hegemony and his leadership that still seems unbeatable.