Communiqué du séminaire à Rome 27 & 28 octobre 2016

By Other

Communiqué du séminaire à Rome 27 & 28 octobre 2016 Il faut agir ensemble pour développer les régions rurales du Sud et du Nord Méditerranée La Fondation du Dialogue Sud-Nord Méditerranée, présidée par M. NOTHOMB, Ministre d’Etat de la Belgique, en partenariat avec la Bibliothèque d’Alexandrie, réunit depuis 2006 tous les trois ans, sur un pied de stricte égalité, des acteurs de la société civile et des acteurs publics des deux rives de la Méditerranée. Au congrès de Milan en Octobre 2015, les participants, avec le GFAR-Global Forum for Agricultural Research et YPARDYoung Professionals for Agricultural Development, deux réseaux appuyés par la FAO, ont discuté du développement des régions rurales du Sud et du Nord, une priorité absolue pour éviter que les déséquilibres entre Sud et Nord ne s’aggravent et amplifient davantage les flux migratoires. En 2015, il avait été convenu de se rencontrer en 2016 pour faire le point des évolutions, notamment depuis la nouvelle politique de voisinage de l’Union européenne. Les 27 et 28 octobre 2016 les participants se sont, comme convenu, réunis à Rome pour discuter de l’évolution et préparer le prochain congrès de la Fondation en 2018. Les discussions ont souligné l’importance de la vie associative et de la capacité et l’autonomie des autorités régionales et locales, éminemment nécessaires pour dénouer les problèmes de développement dans les zones rurales. Une bonne coordination entre les stratégies « bottom up » et « top down » est indispensable pour assurer une évolution positive. Des perspectives doivent être offertes aux jeunes et à la situation des femmes dans les zones rurales. Certaines initiatives des acteurs du Nord, tel que l’ agritourisme, la culture hydroponique, commencent à être reproduites dans le Sud. Un bon accompagnement est indispensable. D’autres programmes prometteurs sont aussi mis en place dans plusieurs pays du Sud. La formation professionnelle, l’accompagnement sur le terrain par la société civile et un véritable partenariat entre pouvoirs publics et société civile sont indispensables pour offrir un avenir pour les zones rurales et par cela contribuer à infléchir les flux migratoires. Les défis sont énormes (changement climatique, pénuries d’eau, croissance démographique,…). Il faut donc créer des opportunités pour les jeunes souvent découragés. Les réseaux sociaux devraient aussi contribuer à rendre l’environnement rural plus attrayant. Les participants se sont largement accordés sur la nécessité impérative d’intensifier la coopération entre les deux rives. Des efforts sont faits, certains progrès sont déjà visibles mais encore insuffisants au regard des multiples défis. Ils appellent pour cela d’une part à une intensification du dialogue positif entre tous les acteurs des deux rives et d’autre part à un effort financier accru, en particulier dans le cadre de la politique de voisinage de l’Union européenne. Ils estiment qu’un accroissement significatif des investissements dans les régions rurales du Sud et du Nord de la Méditerranée, y compris dans l’éducation et la formation, aurait un impact positif sur l’emploi des jeunes et le statut des femmes. Les participants appellent l’Union pour la Méditerranée à un dialogue continu avec la Fondation. Seule une bonne coordination entre les différents acteurs et un appui financier soutenu de l’Union européenne et des Etats du Nord et du Sud et une coopération entre régions pourront contribuer à améliorer la situation économique et sociale dans les régions rurales du Sud méditerranéen.

Crafting a way forward – European Movement Proposals

By Other

The decision of Britain to leave the EU puts the European idea to a test. We have to openly discuss the state of our Union, and the way forward. It is our responsibility to offer bold solutions to the pressing challenges facing all European citizens.

Nationalist and anti-European forces are exploiting people’s insecurities and seek the end of the European project by spurring isolationism and division amongst the European partners.

We need to stand together and confront them head-on. Whether we address migration, the economy, globalisation, climate change, security threats or Britain’s exit from the EU, what the people of Europe need is unity, solidarity and political vision. The European Movement International will continue to strive for a united, fair, diverse, open and prosperous Europe that puts the common interest above petty divisions, and that answers the needs of its citizens.

We believe that our Union needs:

Meaningful participation and transparency
Improving citizens’ trust in politics and policy-making at the national and European level is crucial to building legitimate European policies. Transparency, meaningful participation of citizens and civil society in the decision-making process, and full democratic scrutiny of policies and institutions by the European Parliament are necessary to close the perceived gap between the EU on the one hand, and citizens and representative organisations on the other hand. Concretely, this should entail the full implementation of Article 11 of the Lisbon Treaty, the introduction of structured consultations with equal access for all stakeholders, and a mandatory transparency register for lobbyists. Furthermore, it should encompass innovations in the European elections that will strengthen the link between parties and the European public. Such innovations should include the establishment of a transnational list, more visible European political parties, the introduction of e-voting and the extension of the voting age to 16. But above all we need a proper debate on European issues ahead of European elections, with parties able to link their policies at the European level with citizens’ needs at the local level.

Prosperity, economic stability, and social protection
Europe’s economic growth, the stability of the euro and social protection of its citizens can only be ensured with an improved and comprehensive Economic and Monetary Union (EMU). Increased budgetary and fiscal coordination, a fiscal capacity based on own resources for counter-cyclical policies, and a social dimension mainstreamed into the overall EMU governance structure are essential elements to maintain and improve our prosperity, economic stability, and social rights. The social dimension should include common social convergence criteria, a minimum support scheme, parameters for minimum wages and minimum income, and the integration of social policy objectives into macroeconomic and budgetary surveillance mechanisms. Furthermore, a system of European Economic Governance based on the Community method and subject to democratic checks and balances is necessary to increase the democratic accountability of the EMU.

A common market that works for everyone
A consolidation and extension of the Single Market is needed to ensure the sustainable economic development of Europe. We need to improve the way our market works for business, small and big, by removing barriers to trade and citizens, by safeguarding social, consumer, and environmental protection. In particular, the completion of the Energy union will ensure Europe’s supply with secure, affordable and climate-friendly energy. The Single Market should be to the benefit of all European citizens and we must ensure that we do not go backwards on hard-fought for rights. Initiatives such as the Digital Single Market are very welcome from the perspective of jobs and growth, if they pursue the interests of all Europeans through the development of new skills, support for the workforce, and an improved business climate for SMEs, social enterprises and start-ups. Trade agreements such as TTIP can only succeed if the concerns of all stakeholders are thoroughly and openly recognised and addressed.

Open borders and freedom of movement
Freedom of movement and the removal of internal border controls through the Schengen Agreement have played a significant role in breaking down barriers for trade and labour mobility. The freedom to live, study, work and retire anywhere in Europe is the most tangible success of European integration; it is a defining feature of the EU and key for the economic prosperity of our continent. It has also contributed to greater cultural understanding between the peoples of Europe through travel and the exchange of ideas, goods, services and best practices. The unravelling of Schengen will neither make Europe stronger nor more able to solve its problems. Gaps and concerns in the current system can be addressed, however, through the joint management of Europe’s outer border, investment in intelligence gathering and sharing, and a sound Common European Immigration and Asylum System. In all existing and new measures, EU citizens’ rights and those of refugees and asylum seekers should be fully respected.

Security and a strong international position
In an increasingly competitive global environment, speaking with one voice to represent the interests of the European Union is crucial. A joint message and common strategy are needed to respond to the ongoing and future security challenges, as well as increased defence cooperation both in existing and new areas, such as cybersecurity. The stability of the European Union is also dependent on stability in its neighbourhood. Enlargement has been a very successful instrument in neutralising instability at Europe’s borders, and expanding the prosperity, democracy and the rule of law across Europe. A credible enlargement perspective and long-term vision on the investment in peace and security can bring about positive change in the Western Balkans and the Eastern Partnership countries, and offer a clear outlook for their citizens.

The integrity and defence of European values and rights
The founding values of the European Union – respect for human dignity, liberty, democracy, equality, the rule of law and respect for human rights – form the pillars of European cooperation. Membership of the EU must be intimately linked with continuous adherence to these principles. Violations of these values cannot be accepted and should carry with it sanctions, enforceable jointly by the European Parliament and the Council, following the recommendation of the European Commission. The European Union can only safeguard its standing and reach its objectives if it ensures that its core principles will not be compromised. The same should apply to certain social, employment, environmental and human rights that should be linked to EU citizenship, guaranteed by the EU and stand inalienable and irreversible by national governments.

Turkey : Economic Outcome and Elections : Interview with Dimitri Bettoni from OBCT

By Diğer, Other

You will find below the original interview done by Dimtri Bettoni with Turabder’s President Gül Günver Turan which was later on shortened to fit the required 10.000 characters. The final interview can be found on the website of the Ossevatorio Balcani e Caucaso Transeuropa. (https://www.balcanicaucaso.org/eng/Areas/Turkey/Turkey-Economy-and-Elections-188693

Turkey’s Current  Economic Situation.

What are the current strenghts and weaknesses of the Turkish economy?

The following traits stand out when looking back at recessions and financial crises the Turkish economy have gone through in the past: Resilience characterized by a readiness for revitalization, recuperation, and recovery. Add to these a strong belief in the future, strong enterpreneurial spirit, a business friendly environment, readiness to use new technologies, an energetic workforce, close family ties allowing for support systems to operate, all allowing  recovery to be more rapid than expected. This ability to withstand and cope with shocks, this bouncing back is unfortunately hampered today by vulnerabilities, weaknesses  caused by  both external and internal economic shocks. These shocks are not only a result of intrinsic features of Turkey’s economy but are also due to a lack of good governance and sound macroeconomic management.

Turkey is an export oriented economy easily affected by external shocks such as sudden drops in foreign demand. Its domestic economy is dependent on strategic imports such as gas, oil and raw materials whose prices are currently on the rise. The resulting current account deficit amounts to 57 billion dollars between March 2017 and 2018. Low domestic savings has led to high dependency on foreign savings. Foreign direct investments and portfolio investments are not as high as may have been wished, constituting a major problem at a time when  repayment of foreign debt in 2018 amounts to 240 billion dollars, To make things worse,  domestic capital outflow has increased while Turkish firms operating abroad have become more reluctant to send their earnings back to Turkey.  Shortage of hard currency is also exacerbated by the perception by both domestic and foreign actors that there is a weakening of the rule of law and deterioration of the judicial processes.

How can  the weakness of the lira be explained

The weakness of the TL can be explained by the large amount of foreign debt, an increasing current account deficit, low rates of foreign direct and portfolio investments and fear of the future while the Central Bank remains dormant.  Article 4, part II of the Law on the Central Bank of Turkey entitled defining the “Fundamental Powers of the Bank” stipulates that  the Bank, with the objective of maintaining price stability, shall be authorized to use monetary policy instruments described in this law and also determine and implement other monetary policy instruments that it deems appropriate. De jure the Central Bank is independent but de facto it has taken its clues from President Erdoğan who favors the lowering of interest rates.  His insistence that inflation is a result of high interest rates and therefore interest rates should be lowered has accelerated the run on the currency.  At a time when there is an increasing demand for foreign exchange and interest rates are below inflation rates, the logic of economics would dictate a rise rather than a drop in the interest rates.

The Central Bank raised the interests twice last weeks. Why precisely now?

And what did President Erdogan mean when he spoke about bringing monetary policy more under the government’s control? With what consequences?

It is only when the  TL  hit a record low of 4.9290 against the US dollar that the Central Bank finally decided on tightening monetary policy and raised interest rates. The President’s recent declaration that he would take greater control over monetary policy after the presidential and parliamentary election has once again speeded the selling of TL holdings, but the Central Bank’s determined stand and its increasing of rates a second time have helped a modest recovery of the TL. How long lived this will be we shall have to see… The trend is presently upward. After all, the fever (inflation) is not yet down but at least the termometer (interest rate) is now allowed to show how high this fever is. Can we attribute any logical meaning to what was said by the President during a political rally? It is as if he wished exchange rates to skyrocket again…It may be that he was misguided by his personal economic advisors who thought that Neofisherism could apply to Turkey, characterized by an overheated economy with high rate of inflation and in great need of foreign exchange.

How has this affected the economy?What part of the Turkish society is at the moment suffering the most and what part is gaining advantages

The burden of businesses who had contracted foreign debt denominated in dollars or euros has now increased. The State itself faces the same problem when repaying public debt. Export and imports can both be negatively affected by the depreciation of the TL since the exchange elasticity is negative.  Gas, oil and raw material imports have become more expensive which will fuel even more inflation in the coming months.

A report published by DISK ( Confederation of Progressive Trade Unions of Turkey entitled “Labour under the AKP” emphasizes that trade union rights were violated, strikes prohibited, social security benefits reduced, income distribution deteriorated unfavorably against workers, unemployment grew, the tax burden of workers has increased as indicated by the share of indirect taxes in total taxes going up to 65% in 2017. We can therefore say that the income of Turkey’s low income groups have not improved. Any winners? These days, there seem to be more losers than winners  except for those who held their earnings and savings in gold and/or  foreign exchange.

Why is the government insisting so much in pursuing economic growth despite its high costs in term of inflation and the loss of value of the currency?

The insistence is due to the obligation the President feels to realize the Vision 2023 plan he had made public in 2011. The vision consists of a list of economic, political and social goals  to be achieved by 2023, the centennial of the Republic. The major economic goals were to move up Turkey from a middle income to a high income country with a GDP per capita of 25,000 dollars, allowing Turkey to become the 10th largest economy in the world, tripling its exports to 500 billion US dollars, develop ten globally recognized Turkish brands  and complete accession negotiations with the EU.

Although Turkey has a well functionning market economy and has achieved a strong growth in 2017 coupled unfortunately with high current account deficit and double digit inflation, it is far from achieving these goals.  The  spectacular growth attained so far is unsustainable since it was realized mainly by government guarantees encouraging loan expansion, by tax incentives and by boosting private consumption. This policy has simultaneously fueled imports of consummer goods.  We are in an election year and the government, naturally wishing to win the elections, can not afford to tell its constituencies that this growth is only temporary and that inflation can only be controlled if growth rates are lowered. Ensuring sustainabilitiy of high growth rates can only be achieved with higher domestic saving rates, higher investments and less dependency on foreign capital inflows.

President Erdoğan also  voiced the possibility of the creation of a national rating agency. How would you evaluate this move?

In March 2018 the Head of the Banking Regulation and Supervision Agency (BDDK), at a press review also talked about the establishment by Turkish banks of such a  credit rating agency which would become operational within a few years. Would such a national agency be truly independent, impartial and in compliance with international standards, would it be trusted by international investors it its reports contradict those prepared by international rating agencies, I seriously doubt it.

 Is Erdogan consciously putting Turkey’s economy in a dire situation in order to pursue an ideological agenda that aims at severing the bonds with the West?

I do not think that this is his current agenda. He has realized now that not much can be achieved by siding up solely with the sunni Arab world, that Russia by itself is not a reliable party, that China has still a long way to go and that Africa is still too small a market. He also realizes how costly it can be to severe bonds with the West since 70% of foreign direct investments comes from the EU, since around 50 % of trade is conducted with it, and since recent polls indicate that more than 78 % of the Turkish people wish for the continuation of accession negotiations with the EU. Authoritarian leaders have a tendency to behave alike. Look at Trump who follows a selfish nationalistic agenda with no consideration for others including its close allies, but who will change sides and views when necessary. Opportunistic behaviour is a characteristic of the political arena in the comtemporary world.

Early Elections and the Future of Turkey

Were early elections called in by the government as an attemp to secure the control over the state before Turkey enters the storm of an economic crisis?

Parliamentary and presidential elections were supposed to take place in November 2019 with local elections taking place earlier, in March 2019. Polls showed a decline in the support for the AKP and the popularity of the President while economic indicators gave signs of a turbulence which would require drastic contractionary policies. To mitigate these fallouts, the President announced that early elections would be held on June 24. If the coalition formed by the AKP (Justice and Development Party) and MHP (Nationalist Action Party) wins the election, the constitutional referendum passed last year will allow them to move to a presidential system where the president’s power is increased, the prime ministry and council of ministers is eliminated and the powers of the parliament weakened.

How and why were electoral coalitions formed and did any of the candidates propose something you consider meaningful and appealing during this electoral campaign?

The polls indicated that the MHP might not pass the 10% national electoral threshold after the party split into two with the newly formed IYI Party (Good Party)  under Meral Akşener becoming more popular than Mr. Bahçeli’s MHP. To counter this development, the AKP passed a law enabling electoral alliances and formed  the Republic Alliance with the MHP. To their great surprise, the opposition parties, though ideologically distant from one another, also formed an alliance called the Nation Alliance, the partners being two right wing parties  (IYI : Good Party and SP: Felicity Party) and one center left party (CHP: Republican Peoples Party). During elections voters will vote for the party of their choice and if the party they voted for is member of an alliance, the percentage of the total vote of the alliance parties will be used as the figure used in determining whether the electoral threshold has been reached,  allowing smaller alliance partners to pass the 10% threshold.

A tacit agreement appears to have been concluded between the parties forming the Nation Alliance also. During the first round of the presidential election, the supporters of these three parties will vote for the candidate of their choice. If no candidate gets more than 50 % of the vote, the competition goes to a second round between the two top runners. The Nation Alliance  parties have promised to rally behind the candidate of their partners who have made it to the second round. If the Nation Alliance wins, they promise to return to a parliamentary regime and to implement a radical democratization program.

What should be Turkey’s priorities in terms of economic reforms?

Difficult days await Turkey. The economy is in dire need of reforms and whoever wins the elections will be facing difficult problems and challenges. The Central Bank seems to have lost its credibility. It has acted too slowly to rein in  inflation and protect the TL.  The Treasury’s credibility is also in question. Turkey has become too dependent on short term external funds with maturation dates of less than a year. The other required political and economic reforms can be listed as follows:

  • Improvement of the judicial system
  • Bringing down inflation and interest rates below the 5% level
  • Promoting investments in high valued products and increase the share of high tech exports.
  • Promoting policies to increase investment in R&D
  • Increasing corporate and household saving rates.
  • Reducing bureaucracy and red tape

The list could be longer. Discussions in business and financial circles center on who will be responsible for the conduct of the economy after the elections. Presently none of the presidential candidates have disclosed the economy team they will be working with. Much await to be disclosed and done….

Turkey : Economic Outcome and Elections : Interview with Dimitri Bettoni from OBCT

By Other

You will find below the original interview done by Dimtri Bettoni with Turabder’s President Gül Günver Turan which was later on shortened to fit the required 10.000 characters. The final interview can be found on the website of the Ossevatorio Balcani e Caucaso Transeuropa. (https://www.balcanicaucaso.org/eng/Areas/Turkey/Turkey-Economy-and-Elections-188693

Turkey’s Current  Economic Situation.

What are the current strenghts and weaknesses of the Turkish economy?

The following traits stand out when looking back at recessions and financial crises the Turkish economy have gone through in the past: Resilience characterized by a readiness for revitalization, recuperation, and recovery. Add to these a strong belief in the future, strong enterpreneurial spirit, a business friendly environment, readiness to use new technologies, an energetic workforce, close family ties allowing for support systems to operate, all allowing  recovery to be more rapid than expected. This ability to withstand and cope with shocks, this bouncing back is unfortunately hampered today by vulnerabilities, weaknesses  caused by  both external and internal economic shocks. These shocks are not only a result of intrinsic features of Turkey’s economy but are also due to a lack of good governance and sound macroeconomic management.

Turkey is an export oriented economy easily affected by external shocks such as sudden drops in foreign demand. Its domestic economy is dependent on strategic imports such as gas, oil and raw materials whose prices are currently on the rise. The resulting current account deficit amounts to 57 billion dollars between March 2017 and 2018. Low domestic savings has led to high dependency on foreign savings. Foreign direct investments and portfolio investments are not as high as may have been wished, constituting a major problem at a time when  repayment of foreign debt in 2018 amounts to 240 billion dollars, To make things worse,  domestic capital outflow has increased while Turkish firms operating abroad have become more reluctant to send their earnings back to Turkey.  Shortage of hard currency is also exacerbated by the perception by both domestic and foreign actors that there is a weakening of the rule of law and deterioration of the judicial processes.

How can  the weakness of the lira be explained

The weakness of the TL can be explained by the large amount of foreign debt, an increasing current account deficit, low rates of foreign direct and portfolio investments and fear of the future while the Central Bank remains dormant.  Article 4, part II of the Law on the Central Bank of Turkey entitled defining the “Fundamental Powers of the Bank” stipulates that  the Bank, with the objective of maintaining price stability, shall be authorized to use monetary policy instruments described in this law and also determine and implement other monetary policy instruments that it deems appropriate. De jure the Central Bank is independent but de facto it has taken its clues from President Erdoğan who favors the lowering of interest rates.  His insistence that inflation is a result of high interest rates and therefore interest rates should be lowered has accelerated the run on the currency.  At a time when there is an increasing demand for foreign exchange and interest rates are below inflation rates, the logic of economics would dictate a rise rather than a drop in the interest rates.

The Central Bank raised the interests twice last weeks. Why precisely now?

And what did President Erdogan mean when he spoke about bringing monetary policy more under the government’s control? With what consequences?

It is only when the  TL  hit a record low of 4.9290 against the US dollar that the Central Bank finally decided on tightening monetary policy and raised interest rates. The President’s recent declaration that he would take greater control over monetary policy after the presidential and parliamentary election has once again speeded the selling of TL holdings, but the Central Bank’s determined stand and its increasing of rates a second time have helped a modest recovery of the TL. How long lived this will be we shall have to see… The trend is presently upward. After all, the fever (inflation) is not yet down but at least the termometer (interest rate) is now allowed to show how high this fever is. Can we attribute any logical meaning to what was said by the President during a political rally? It is as if he wished exchange rates to skyrocket again…It may be that he was misguided by his personal economic advisors who thought that Neofisherism could apply to Turkey, characterized by an overheated economy with high rate of inflation and in great need of foreign exchange.

How has this affected the economy?What part of the Turkish society is at the moment suffering the most and what part is gaining advantages

The burden of businesses who had contracted foreign debt denominated in dollars or euros has now increased. The State itself faces the same problem when repaying public debt. Export and imports can both be negatively affected by the depreciation of the TL since the exchange elasticity is negative.  Gas, oil and raw material imports have become more expensive which will fuel even more inflation in the coming months.

A report published by DISK ( Confederation of Progressive Trade Unions of Turkey entitled “Labour under the AKP” emphasizes that trade union rights were violated, strikes prohibited, social security benefits reduced, income distribution deteriorated unfavorably against workers, unemployment grew, the tax burden of workers has increased as indicated by the share of indirect taxes in total taxes going up to 65% in 2017. We can therefore say that the income of Turkey’s low income groups have not improved. Any winners? These days, there seem to be more losers than winners  except for those who held their earnings and savings in gold and/or  foreign exchange.

Why is the government insisting so much in pursuing economic growth despite its high costs in term of inflation and the loss of value of the currency?

The insistence is due to the obligation the President feels to realize the Vision 2023 plan he had made public in 2011. The vision consists of a list of economic, political and social goals  to be achieved by 2023, the centennial of the Republic. The major economic goals were to move up Turkey from a middle income to a high income country with a GDP per capita of 25,000 dollars, allowing Turkey to become the 10th largest economy in the world, tripling its exports to 500 billion US dollars, develop ten globally recognized Turkish brands  and complete accession negotiations with the EU.

Although Turkey has a well functionning market economy and has achieved a strong growth in 2017 coupled unfortunately with high current account deficit and double digit inflation, it is far from achieving these goals.  The  spectacular growth attained so far is unsustainable since it was realized mainly by government guarantees encouraging loan expansion, by tax incentives and by boosting private consumption. This policy has simultaneously fueled imports of consummer goods.  We are in an election year and the government, naturally wishing to win the elections, can not afford to tell its constituencies that this growth is only temporary and that inflation can only be controlled if growth rates are lowered. Ensuring sustainabilitiy of high growth rates can only be achieved with higher domestic saving rates, higher investments and less dependency on foreign capital inflows.

President Erdoğan also  voiced the possibility of the creation of a national rating agency. How would you evaluate this move?

In March 2018 the Head of the Banking Regulation and Supervision Agency (BDDK), at a press review also talked about the establishment by Turkish banks of such a  credit rating agency which would become operational within a few years. Would such a national agency be truly independent, impartial and in compliance with international standards, would it be trusted by international investors it its reports contradict those prepared by international rating agencies, I seriously doubt it.

 Is Erdogan consciously putting Turkey’s economy in a dire situation in order to pursue an ideological agenda that aims at severing the bonds with the West?

I do not think that this is his current agenda. He has realized now that not much can be achieved by siding up solely with the sunni Arab world, that Russia by itself is not a reliable party, that China has still a long way to go and that Africa is still too small a market. He also realizes how costly it can be to severe bonds with the West since 70% of foreign direct investments comes from the EU, since around 50 % of trade is conducted with it, and since recent polls indicate that more than 78 % of the Turkish people wish for the continuation of accession negotiations with the EU. Authoritarian leaders have a tendency to behave alike. Look at Trump who follows a selfish nationalistic agenda with no consideration for others including its close allies, but who will change sides and views when necessary. Opportunistic behaviour is a characteristic of the political arena in the comtemporary world.

Early Elections and the Future of Turkey

Were early elections called in by the government as an attemp to secure the control over the state before Turkey enters the storm of an economic crisis?

Parliamentary and presidential elections were supposed to take place in November 2019 with local elections taking place earlier, in March 2019. Polls showed a decline in the support for the AKP and the popularity of the President while economic indicators gave signs of a turbulence which would require drastic contractionary policies. To mitigate these fallouts, the President announced that early elections would be held on June 24. If the coalition formed by the AKP (Justice and Development Party) and MHP (Nationalist Action Party) wins the election, the constitutional referendum passed last year will allow them to move to a presidential system where the president’s power is increased, the prime ministry and council of ministers is eliminated and the powers of the parliament weakened.

How and why were electoral coalitions formed and did any of the candidates propose something you consider meaningful and appealing during this electoral campaign?

The polls indicated that the MHP might not pass the 10% national electoral threshold after the party split into two with the newly formed IYI Party (Good Party)  under Meral Akşener becoming more popular than Mr. Bahçeli’s MHP. To counter this development, the AKP passed a law enabling electoral alliances and formed  the Republic Alliance with the MHP. To their great surprise, the opposition parties, though ideologically distant from one another, also formed an alliance called the Nation Alliance, the partners being two right wing parties  (IYI : Good Party and SP: Felicity Party) and one center left party (CHP: Republican Peoples Party). During elections voters will vote for the party of their choice and if the party they voted for is member of an alliance, the percentage of the total vote of the alliance parties will be used as the figure used in determining whether the electoral threshold has been reached,  allowing smaller alliance partners to pass the 10% threshold.

A tacit agreement appears to have been concluded between the parties forming the Nation Alliance also. During the first round of the presidential election, the supporters of these three parties will vote for the candidate of their choice. If no candidate gets more than 50 % of the vote, the competition goes to a second round between the two top runners. The Nation Alliance  parties have promised to rally behind the candidate of their partners who have made it to the second round. If the Nation Alliance wins, they promise to return to a parliamentary regime and to implement a radical democratization program.

What should be Turkey’s priorities in terms of economic reforms?

Difficult days await Turkey. The economy is in dire need of reforms and whoever wins the elections will be facing difficult problems and challenges. The Central Bank seems to have lost its credibility. It has acted too slowly to rein in  inflation and protect the TL.  The Treasury’s credibility is also in question. Turkey has become too dependent on short term external funds with maturation dates of less than a year. The other required political and economic reforms can be listed as follows:

  • Improvement of the judicial system
  • Bringing down inflation and interest rates below the 5% level
  • Promoting investments in high valued products and increase the share of high tech exports.
  • Promoting policies to increase investment in R&D
  • Increasing corporate and household saving rates.
  • Reducing bureaucracy and red tape

The list could be longer. Discussions in business and financial circles center on who will be responsible for the conduct of the economy after the elections. Presently none of the presidential candidates have disclosed the economy team they will be working with. Much await to be disclosed and done….

Is There A Future For Social Democracy In Europe?

By Other

 

The response to the Great Recession from European social democratic/centre-left parties, with some notable exceptions like Portugal’s, was largely to implement the austerity policies of the right: they bailed out the banks and the bondholders, and they tightened fiscal policies and supported loose monetary ones. The economic and political consequences of these policies have been disastrous, particularly for Southern Europe: they led to brutal recessions that have left many of our countries in shambles, with deepening inequalities, increasing political instability, and a pervasive sense of fear and loss of hope about the future. These have led to the electoral defeats of centre-left parties and fueled the rise of populism all over Europe.

The biggest mistake, of course, was the acceptance and implementation of austerity, which turned social democratic governments into reactionaries. Centre-left politicians, convinced that elections were won from the centre, obsessed with a mission to prove that they could also be fiscally responsible, incapable of joining forces at EU level to counter Germany’s dogmatism, and complacent because they felt that leftist voters had no alternatives, jumped eagerly onto the austerity bandwagon, in some cases even doubling down to prove their bona fides to the markets, with all the consequences our countries will suffer from for years to come.

The problem, however, is that despite this debacle the left does not seem to be undergoing a process of renewal. We are missing a formulation of new policies and alternatives that challenge the dominant neoliberal paradigm.

Decline And Fall

There are structural reasons for the decline of social-democratic/centre-left parties and unions: workforces are less unionized, and traditional class identities and party systems have eroded. Furthermore, most of the current problems preceded the crisis. Indeed, the relative stagnation of real incomes among the working and middle classes; falling living standards; the decline of social mobility; the increase in employment insecurity driven by technological changes and the liberalization of trade and financial markets; and the cultural and social upheaval wrought by immigration, these all started decades before the Great Recession. The centre-left, however, minimized these problems and failed to come up with policies to address them effectively.

If centre-left parties want to arrest their decline and confront effectively the rise of populism, they need to find a way forward that addresses the concerns of a broad middle-class: acknowledging their justified fears and anxieties and making them the starting point of their policy initiatives rather than an afterthought. They either return to their Keynesian roots and offer hope and solutions to the young and their own traditional voters, or the populist parties will and they will be left out on the margins.

Rather than blindly supporting fiscal austerity and free trade agreements, which have hurt their core traditional constituencies, progressive governments need to find the right mix of monetary and fiscal policies, support public sector investment, and lower taxes to the middle class to encourage greater consumption. They also need to reform their tax and welfare systems to encourage a fairer distribution of wealth and reduce inequality, as well as invest in infrastructure and in their communities; implement industrial policies that help diversify our economies as well as apply labor standards that protect our workers, even if we need to change our trade rules; and enforce financial regulations that prevent the damage caused by short-term capital flows. Finally, they need to rethink how we educate and train our workforce to meet the demands of the future.

And they need to accept that many of the solutions need to be implemented at the European level. The constraints imposed by EU rules are central to understand the predicament of centre-left parties because Eurozone members must abide by a plethora of strict fiscal rules that constrain national policies and have forced centre-left parties to worship at the altar of budgetary restraint and competitiveness to satisfy their Eurozone masters (as well as financial markets), often at the expense of social policies and their citizens’. Right now, for any country to escape the fiscal straitjacket of the Growth & Stability Pact, the only real option is to leave the euro. That is the solution offered by extremist parties. Rather, what we need is more fiscal flexibility and a Eurozone-wide investment plan funded by Eurobonds. While this is now opposed by Germany, centre-left parties need to find a way to come together and counter this rigid stance.

Moreover, centre-left leaders need to acknowledge that while globalization may be blamed, it cannot be wished away. They need to accept that the world is different: the combination of factors that enabled global growth and expanded globalization have weakened, trust in governments and institutions has largely evaporated, the national social compacts that supported welfare states and trade openness have eroded, and consensus around immigration and free trade has come undone. Indeed, the recent crisis has brought to the fore the imbalances between globalization and the power of national governments, and it has showcased the strong links between money and politics along with the negative effects of trade agreements that have been written largely for the benefits of corporations. That needs to change. The benefits of globalization must be fairly distributed, corporations and the wealthy need to pay their fair share of taxes, and policies need to be developed to cushion the social upheaval.

The centre-left has not died but it needs to build a new coalition to reinvent and re-energize itself. Populists feed on pessimism. In order to deal with the splintering of its traditional support base and confront the rise of populism, the centre-left should come up with an optimistic narrative that focuses on opportunities to address the fears of the day, while offering real solutions to citizens’ problems. This should start with a rejection of austerity in favor of investment economics, as well as growing European economic cooperation and solidarity. There is no easy blueprint to rebuild trust but it is urgent that this process starts. The future of our liberal democracies is at stake.

https://www.socialeurope.eu/2017/04/future-social-democracy-europe/

 

EM Ireland: Just the Facts – Slovak Presidency of the Council of the EU

By Other

Background

On 1 July Slovakia took over the rotating Presidency of the Council of the European Union (EU) for the upcoming 6 months. This transfer marks the first time Slovakia has held the Presidency and the second phase of the current rotation, the Presidency having previously been held by the Netherlands and still to be held by Malta for the first 6 months of next year.

Slovak Presidency Briefing

On Tuesday, 19 July 2016, European Movement Ireland held its 10th Presidency Briefing. The Ambassador of the Slovak Republic to Ireland, H.E. Mr Dušan Matulay, and the Minister for European Affairs, EU Digital Single Market and Data Protection, Dara Murphy TD, were in attendance to provide an overview and discuss the priorities of the new Presidency.

The Ambassador acknowledged that challenging times lie ahead for the EU, particularly stemming from the UK’s referendum decision last month. However, H.E. Mr Matulay stressed that Slovakia is well placed to assist in the mediation of future negotiations between the EU and the UK, and that this critical juncture should be used to consider how the bond between citizens and the Union can be deepened. H.E. Mr Matulay went on to detail the key ambitions of the Slovak Presidency to bring about tangible results.

Minister Murphy echoed the Ambassador’s call for the EU to foster a united front in the face of current challenges. He also underscored the need for national politicians to acknowledge the role that national governments play in creating EU policies.

At the event, the Ambassador and the Minister launched EM Ireland’s six-month Slovak Presidency Calendar. Download your copy here.

Presidency Priorities

The Slovak Presidency will focus on four key priorities:

Economically Strong Europe

The Slovak Presidency will advocate the need for the EU to foster innovation and competitiveness in a bid to stimulate job creation, through the removal of barriers to investment and the pursuit of structural reforms and responsible fiscal policies. The Slovak Presidency will also push for progress on completing the Economic and Monetary Union, as well as the Capital Markets Union. Further to this, the Presidency will promote an economy in which small and medium-sized enterprises can prosper, by encouraging alternative sources of funding away from banks.

Modern Single Market

In adapting to today’s realities and removing unjustified barriers that hamper its functioning, the Slovak Presidency will be at the forefront of the EU’s continuing effort to strengthen, deepen and modernise the Single Market. The Presidency will particularly focus on the Digital Single Market and the Energy Union, alongside a forward-looking climate policy in line with the COP21 Agreement reached in Paris in December.

A Sustainable Migration and Asylum Policy

The Slovak Presidency will strongly advocate the need to develop tenable, sustainable policies which maintain the freedom of movement ensured by the Schengen Agreement while also maintaining control over EU external borders. Measures promoted by the Slovak Presidency will include the European Border Guard and legislation on Smart Borders, encouraging greater dissemination of border information.

Globally Engaged Europe

Another key component of the Slovak Presidency’s objectives is to bolster and sustain the EU’s position in the world, in line with the EU Global Strategy on Foreign and Security Policy. The Presidency will pay particular attention to ongoing accession negotiations with candidate countries where a clear European perspective is key to economic and political stability. The Presidency will also advocate the need to continue with negotiations to establish strong trade links with global economic actors.