The Econmist - USA (2021-10-30)

TheEconomistOctober30th 2021 43

Europe

Turkey

Autumn of the patriarch

A

good dust-upwith  one  Western  ally
or  another  is  something  that  Turkey’s
president,  Recep  Tayyip  Erdogan,  always
relishes. On October 23rd he took on ten of
them at the same time, announcing that he
had  ordered  the  American,  French,  Ger­
man,  Dutch,  Canadian,  Swedish,  Norwe­
gian,  Danish,  Finnish,  and  New  Zealand
ambassadors to be declared personae non
gratae, a prelude to having them kicked out
of  the  country.  Their  offence  was  to  have
signed a letter urging Turkey to release Os­
man Kavala, a philanthropist locked up on
farcical terror and coup charges. It took an­
other  couple  of  days,  the  exhortations  of
Turkish  officials,  who  warned  him  of  the
dire  potential  consequences  to  the  coun­
try’s economy, and a carefully crafted state­
ment  by  the  American  embassy,  in  which
the mission said it did not meddle in Tur­
key’s  domestic  affairs,  before  Mr  Erdogan
backed down. The envoys were allowed to
remain in Ankara.
After  nearly  provoking,  then  averting,
the  biggest  diplomatic  crisis  Turkey  has
seen  in  decades,  Mr  Erdogan  proclaimed
victory. The envoys “took a step back from

theslanderagainstourcountry”,hesaid.

“Theywillbemorecarefulnow.”

Theepisode,andthegloatingthatfol­

lowed, showed how badly Mr Erdogan

needs something to celebrate. Turkey’s

leaderishavingoneoftheworstslumpsof

hislongcareer.Anallianceofthetwomain

oppositionparties,thesecularRepublican

People’sParty(chp) andthenationalistIyi

(“Good”)partyispollingaheadofMrErdo­

gan’sgoverningcoalition,composedofhis

ownJusticeandDevelopment(ak) party

andtheNationalistMovementParty.Were

parliamentaryelectionstotakeplaceto­

morrow(theyarenotdueuntil2023,to­

getherwiththenextpresidentialelection),

therulingcoalitionwouldloseitsmajori­

ty.MrErdogan,meanwhile,trailsbehind

eachofthefourmostlikelycontendersfor

thepresidency,insomecasesbydouble

digitsinputativerun­offs.Thewhispers

arestartingtogrowlouder:couldtheErdo­

ganerabedrawingtoa close?

Theeconomy,hobbledbyhighprices

andaplummetingcurrency,isthemain

reason.Thelirahaslostover20%ofitsdol­

larvaluesincethestartoftheyear,more

thananyothermajorcurrency.Thelatest

routcameonOctober21st,whenthecen­

tralbankslashedthemaininterestrateby

twofullpercentagepoints.Daysearlier,Mr

Erdoganhadsackedthreemembersofthe

bank’s monetary­policy committee. The

surprise cut, the second in as many

months,broughttherateto nearlyfour

pointsbelowtherateofinflation,which

reached19.6%inSeptember.Manygovern­

ments have used negative real interest

ratestorevivegrowth,usuallyafterunder­

shootingtheirinflationtargets.Turkeyis

overshootingitsowntarget(5%)fourfold.

Investorshaverunoutofpatience.

FromMrErdogan’svastpalaceinAnka­

ra,thingsdonotlooksobad.Theeconomy

grewbya record21.7%inannualtermsin

thethreemonthstoJuly,thankstolarge

I STANBUL
As the lira tanks, so does President Erdogan’spoliticalstock

→Alsointhissection

44 FencingtheEU’sborders

46 Serbia’smilitarybuild-up

46 WhyFrancelovesacronyms

48 Russia’sfeistyCommunists

50 Charlemagne:NuclearEurope

Erdogan’s gift to Turkey

Turkish lira per $, inverted scale

Source: Refinitiv Datastream

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