Turkey Post-elections (II)
There have been a couple of important developments regarding the post-elections landscape:
First, there were some rumors that the Savings Deposit Insurance Fund and the BRSA will act to rein in overlending. Acciording to an article in Turkish daily Habertuk, SDIF will increase deposit insurance premiums and the BRSA will increase equity capital requirement from 25 t0 40% slowly. This makes sense: Even if we won’t be getting fiscal tightening, enacting such measures ASAP would be useful. BTW, daily Dunya has an in-depth piece about the government’s economic policy priorities (in Turkish). The priorities are, according to the paper, addressing the current account deficit, turning Istanbul into a financial center, improving the investment climate and making the labor market more flexible. On the latter, you can read (if you speak castellano, of course) my thoughts in two articles in the Spanish daily El Pais- these are from a phone interview with their Turkey correspondent last week.
Second, more people in the main opposition CHP, including ex-leader Deniz Baykal, are starting to raise their voices, with some openly inviting leader Kemal Kilicdaroglu to resign. This confirms my concerns that the 26 percent vote is far from quieting down the dissidents. Such infighting, even if it doesn’t end in a coup or a split party, would hamper the CHP’s hand during possible Constitution negotiations.
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