Archive for August 2018

The Latest: Erdogan, Putin talk economic ties as lira falls

August 10, 2018


Adem Altan | AFP | Getty Images – Turkey’s President Recep Tayyip Erdogan (L) and Russia’s President Vladimir Putin last April.

By The Associated Press ANKARA, Turkey — Aug 10, 2018, 10:08 AM ET

Source Link: The Latest: Erdogan, Putin talk economic ties as lira falls

{Note: The original article in this post has disappeared from CNBC and it’s affiliates…strange. I guess it was just an update, but the title was changed as well. – LS}

{Turkey runs to Putin for help. Good luck with that. – LS}

The Latest on Turkey’s financial turmoil (all times local):

5:10 p.m.

Turkish officials say President Recep Tayyip Erdogan has held a telephone conversation with Russian President Vladimir Putin during which they discussed economic ties between the two countries.

Officials from Erdogan’s office said the two on Friday “expressed pleasure” that economic and financial ties between their countries were progressing “positively” and of the continued cooperation in the defense industry and energy. The officials provided the information only on condition of anonymity according to protocol.

It was an apparent reference to Turkey’s decision to purchase Russian-made S-400 missile defense systems. Russia is also building a nuclear power plant.

The news of the conversation came shortly after U.S. President Donald Trump said he had authorized the doubling of steel and aluminum tariffs “with respect to Turkey,” causing the Turkish currency to plunge further against the dollar.

———

4:15 p.m.

In a bid to ease investor concerns about Turkey’s economic policy, the country’s finance minister says the government will safeguard the independence of the central bank.

Treasury and Finance Minister Berat Albayrak on Friday also vowed sustainable and healthy economic growth as well as “strong struggle” against inflation, which currently stands at close to 16 percent.

Albayrak was speaking at a conference where he outlined his ministry’s “new economic policy” as the currency plunged, raising questions about the country’s financial stability.

He said: “One of our principles will be ensuring the full independence of monetary policy.”

Investors are worried about the president’s unorthodox economic policies, pressure exerted on the central bank, and a dispute with the United States that has led to sanctions.

———

4:10 p.m.

President Donald Trump says he’s just authorized the doubling of steel and aluminum tariffs “with respect to Turkey.”

Trump says via tweet that the tariff on aluminum imports will be increased to 20 percent and the tariff on steel imports will be raised to 50 percent as the Turkish Lira “slides rapidly downward against our very strong Dollar!”

Trump is also declaring that, “Our relations with Turkey are not good at this time!”

The United States slapped sanctions on two Turkish officials earlier this month over a detained American pastor who is being tried on espionage and terror-related charges.

Turkey vowed retaliation “without delay” and warned the move would further harm relations between the two allies.

Trump’s tweet caused a further drop in the Turkish currency, which is now down 13 percent on the day.

———

3:05 p.m.

Turkish President Recep Tayyip Erdogan is appealing for calm as the country’s currency plunges, urging people to change foreign money into local lira.

The lira tumbled about 10 percent on Friday to another record low as investors worry about Erdogan’s unorthodox economic policies and U.S. sanctions.

Erdogan said during an address to supporters: “Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks. This is a domestic and national struggle.”

He appeared to blame foreigners for trying to hurt Turkey, saying: “This will be my people’s response against those waging an economic war against us.”

The lira fell further as Erdogan spoke.

———

2:15 p.m.

President Recep Tayyip Erdogan says his government “will not lose the economic war.”

Turkish newspaper Hurriyet and other media reports quote Erdogan as making the comment to a group of worshippers following traditional Muslim Friday prayers during a visit to the northern city of Bayburt.

On Friday, the Turkish currency plunged to another record low amid concerns over Erdogan’s unorthodox economic policies and a diplomatic row with the United States that has led to sanctions.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.96, down more than 7 percent on the day.

———

12:05 p.m.

An analyst at Berenberg bank in London is downplaying the risks to Europe’s economy from Turkey’s currency turmoil, saying the impact on trade would be small.

European economist Carsten Hesse said Friday that even if the export of goods to Turkey falls 20 percent that would take no more than 0.1 percentage point from annual GDP in the 19 countries that use the euro currency.

He cautioned that a banking crisis in Turkey could have “some negative repercussions” on eurozone banks that loaned money there or own Turkish banks. But he said that the possible losses seem “too small to cause a significant eurozone crisis.”

Hesse noted that business confidence in the eurozone did not suffer after Turkey’s economy contracted in 2016 in the wake of a failed coup there.

———

11:40 a.m.

The euro sagged to a 13-month low against the dollar amid worries about the impact of financial market turmoil in Turkey.

The 19-country currency fell 0.7 percent to trade at $1.1450 in morning trading in Europe. The dollar, which traders buy in times of financial concern, was up against most other currencies.

The euro’s fall comes as investors try to come to grips with how big a threat the troubles in Turkey might pose for the currency union. Turkey’s currency sagged to an all-time low Friday amid doubts about the country’s economic management and souring ties with the United States.

The Financial Times added to concerns with a report that the European Central Bank was worried about possible losses at eurozone banks operating in Turkey. European officials also rely on a deal with Turkey to restrain migrant flows in return for aid.

———

11:20 a.m.

The Turkish currency has plunged to an all-time low amid concerns over the president’s economies policies persisted and as a dispute with the United States showed no sign of subsiding.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.94, down 7 percent on the day. The currency has fallen 66 percent since the start of the year.

High level meetings in Washington between U.S. and Turkish officials over a detained American pastor ended this week without an apparent resolution. Washington imposed financial sanctions on two Turkish ministers and warned of additional measures.

President Recep Tayyip Erdogan on Thursday portrayed the currency drop as a “campaign” to harm Turkey.

He said: “If they have their dollar, we have the people, we have Allah.”

‘Return flotilla’ to leave Gaza for Israel

August 10, 2018

Flotilla to launch from Gaza tomorrow aiming to ‘return’ to Israeli territorial waters.

Arutz Sheva Staff, 10/08/18 14:28
http://www.israelnationalnews.com/News/News.aspx/250340
boats by Gaza (archive)

Abed Rahim Khatib /Flash90

The first ‘Return Flotilla’ is expected to leave Gaza on Saturday for Israel’s territorial waters in an attempt to break the naval blockade imposed on the Gaza Strip.

The flotilla is organized by an organization called the National Movement to Break the Siege on Gaza, which takes place simultaneously with the Friday demonstrations held along the Gaza Strip border.

The Hamas political bureau, the supreme body of the Hamas leadership, convened last week in the Gaza Strip to decide to continue the return riots on the Gaza border and the “popular struggle” and “unpopular” against Israel.

Various forms of terrorist activity are included under the heading of “Popular Struggle,” including stone-throwing, stabbing, burning, the launching of incendiary kites and balloons, and other forms of violence.

In February 2010 Hamas sent explosive barrels into Israel’s territorial waters. One of the barrels was swept ashore in Palmachim, 8 miles north of the Gaza Strip.

Analysis: Where is Trump’s Israeli-Palestinian peace plan?

August 10, 2018

In testing whether time is right for a rollout, the administration may be releasing both false and genuine trial balloons to gauge a response.

By Michael Wilner
August 9, 2018 21:10
https://www.jpost.com/Arab-Israeli-Conflict/Analysis-Where-is-Trumps-peace-plan-564508
United States Ambassador to the United Nations (UN) Nikki Haley speaks in front of White House senior adviser Jared Kushner during a meeting of the UN Security Council at UN headquarters in New York, U.S., February 20, 2018. . (photo credit: REUTERS)

US President Donald Trump’s plan for Israeli-Palestinian peace may be the most closely guarded policy secret in Washington these days, 18 months in the making and yet still known only to the small handful of men behind it.

Senior administration officials describe the plan as detailed, pragmatic, and essentially complete. All that prevents them from publishing it is their sense that the timing is off.

They are waiting for some ripe moment to present itself – perhaps when the Palestinian leadership decides to give the administration a second chance after writing it off for recognizing Jerusalem as Israel’s capital last year. But such a moment seems unlikely any time soon. The Palestinian Authority, which has not seen the plan, says that Trump’s peace team has given every indication that its contents will reflect bias in favor of Israel by sidestepping explicit references to a two-state solution, dismissing refugee claims, endorsing a permanent Israeli presence in the Jordan Valley, allowing Jewish settlers to remain in the West Bank and remaining silent on the future placement of a sovereign Palestinian capital.

There are reasons to believe they are right. While the White House insists that its recognition of Jerusalem as Israel’s capital does not predetermine sovereignty over the entire city in an eventual peace agreement, it has never explicitly stated, as it did with Israel in December, that Palestinians have a reciprocal right to a capital in the holy city – or to any capital at all.

They have removed all reference to a two-state solution, to Palestinian independence or Palestinian territories from State Department language, dismissing those terms as “meaningless” without yet spelling out alternatives. And they have defunded the UN Relief and Works Agency, characterizing the Palestinian aid organization as a corrupt and inefficient body perpetuating a false narrative on refugees unhelpful to the pursuit of peace.

“The traditional core issues are essential and we focus on them extensively with a strong appreciation of the historic differences between the two sides,” Jared Kushner, the president’s son-in-law and senior adviser leading the peace effort, told the Palestinian Al-Quds newspaper in June. “We are committed to finding a package of solutions that both sides can live with.”

But, he added: “Simply resolving core issues without creating a pathway to a better life will not lead to a durable solution.”

Kushner and Jason Greenblatt, the president’s special representative for international negotiations, have said their plan tackles some of the thorniest issues in the conflict with specificity and ingenuity – a truly novel take on a geopolitical challenge that has, for too long, been mired in stale thinking. But while past efforts have failed, the careful balance American presidents have walked in since 1967 has allowed them to bring both sides around the same table, to the precipice of an agreement multiple times. Trump’s approach thus far has not. The reason the timing has been off may be because the approach is off.

TRUMP’S TEAM says that the PA leadership is prejudging what is in their plan before they see it, and this much is true: Palestinian officials, like the rest of us, have been left to read tea leaves based on the behavior they have seen thus far. If the plan includes revelatory material that defies expectations – as the team claims – then it should not wait for a moment of kindness from the Palestinians to present itself before releasing the plan. That moment will be created by the presentation of the plan.

The peace team seems to be considering this approach, expressing confidence that their work will see the light of day whether or not the Palestinians come around beforehand. They say the plan will include proposals that both parties will love and hate, and lament that they are frequently forced to dismiss rumors on the contents of their plan that scatter news reports.

But in testing whether the time is right for a rollout, the administration may be releasing trial balloons – based both on false as well as genuine tidbits from the plan – to gauge public response, knowing full well it can simply deny whichever ones float too high. Regardless of the strategy, public response has been self-evident as the plan is still under wraps.

Palestinian leaders are skeptical Trump’s team will ever support a policy that disadvantages Prime Minister Benjamin Netanyahu, and at some point, it will have to prove them wrong to earn their trust back. And report in Foreign Policy magazine last week, which quoted Kushner from back in January questioning the role of UNRWA, did them no favors. White House officials said it was a stretch to say they were denying the refugee status of millions of Palestinians simply by challenging UNRWA’s mandate, which treats the descendants of refugees from the 1940s the same as their modern-day ancestors. But Palestinian leaders saw Kushner’s comments in an e-mail calling for the “disruption” of UNRWA as further evidence of his plans to erode Palestinian claims to a homeland there.

There is one new sign the administration is working on a rollout with direction and purpose. The Associated Press reported last week that the peace team had begun staffing up, on-loading officials from the State Department and National Security Council to create working groups on the policy dimensions of the plan, the economic components of the plan and the strategic sale of the plan to the public. The formation of these teams would indicate that a release is not imminent – these staffers still need time to get into place and prepared – but that publication could be ready in the coming months.

“You can’t put something out where everybody says, ah, this is dead on arrival,” a senior administration official told The Jerusalem Post in June. “You can’t do that. And the same exact document that may be dead on arrival on a Monday might not be dead on arrival on a Thursday. That sounds kind of counterintuitive, but that’s the way this works.”

 

Amid lull in fighting, Hamas says Gazans will resume border protests

August 10, 2018

Spokesperson for the terror group says Palestinians will ‘challenge the Israeli war machine’ in ‘March of Return’ demonstrations on Friday

Today, 1:18 pm

https://www.timesofisrael.com/amid-lull-in-fighting-hamas-says-gazans-will-resume-border-protests/

Palestinian protesters at the Israel-Gaza border, in Khan Yunis in the southern Gaza Strip, on August 3, 2018. (AFP/Said Khatib)

The Hamas terrorist group on Friday said the so-called “March of Return” border demonstrations would continue unimpeded later in the day, despite a cessation of hostilities with Israel clinched the night before.

The announcement came after a 12-hour lull in fighting, following two days that saw the heaviest exchange of Palestinian rocket fire and reprisal Israeli airstrikes since the 2014 Gaza war.

For the past four months there have been near-weekly, violent protests along the Israel-Gaza border organized by Gaza’s Hamas rulers.

Hamas spokesman Hazem Qassim tweeted on Friday that demonstrators would continue to “break the siege” on the Gaza Strip.

“Every time the Israeli killing machine attempts to break our people’s will to continue its struggle and marches, it fails to do so,” he wrote. “Today our people will head to the ‘Marches of Return’ to challenge the Israeli war machine.”

“Our Palestinian people has a long-lasting, struggling soul,” the Hamas spokesperson wrote. “It will continue its resistance in all of its forms until it gains its freedom, independence and right to a dignified life.”

A plume of smoke rises from the remains of a building west of Gaza City that was targeted by the Israeli Air Force in response to a rocket attack that hit southern Israel earlier in the day on August 9, 2018. (Mahmud Hams/AFP)

Over the past four months the “March of Return” protests have led to deadly clashes which saw Israeli security forces facing gunfire, grenades, Molotov cocktails, and efforts — sometimes successful — to damage or cross the border fence.

At least 160 Palestinians have been killed by Israeli fire since the weekly protests began, the Hamas ministry says. Hamas has acknowledged that dozens of those killed were its members.

One Israeli soldier was shot dead by a Palestinian sniper.

In addition to the border clashes, southern Israel has experienced hundreds of fires as a result of incendiary kites and balloons flown over the border from Gaza. Over 7,000 acres of land have been burned, causing millions of shekels in damages, according to Israeli officials.

 

Turkey lira crashes to new lows as market alarm grows

August 10, 2018


© AFP | The lira’s drastic fall has European banks worried

10 August 2018 – 13H20 France 24

Source Link: Turkey lira crashes to new lows as market alarm grows

{Trump drops another economic bomb. – LS}

ISTANBUL (AFP) –

Turkey’s embattled lira on Friday hit new record lows against the US dollar and euro, losing over six percent in value as strains with the United States showed no sign of abating and fears grew over the exposure of European banks.

The lira was trading at 5.90 to the dollar, a loss on the day of 6.5 percent. Earlier, it had crashed some 12 percent through the 6.00 level for the first time in history, trading at one point at more than 6.20 lira per dollar.

The lira has now lost over a third of its value against both the dollar and the euro this year, with the currency battered by both concerns over domestic economic policy and the political situation.

Versus the euro on Friday the lira lost 7.0 percent to trade at 6.8.

Turkey remains at loggerheads with the United States in one of the worst spats between the two NATO allies in years over the detention for the last two years of American pastor Andrew Brunson and a host of other issues.

Talks this week in Washington failed to resolve the impasse which has led both sides to slap sanctions on senior officials amid fears of graver measures to come.

– Doubts over central bank –

Meanwhile, markets are deeply concerned over the direction of economic policy under President Recep Tayyip Erdogan with inflation nearly 16 percent but the central bank reluctant to raise rates in response.

UBS chief economist for EMEA emerging markets Gyorgy Kovacs said a giant rate hike of 350-400 basis points would be “consistent with real rate levels that in the past helped to stabilise the currency.”

He warned a “rate hike alone might not stem the worries about the US and Turkey tensions and a potential further escalation.”

And it remains unclear if the bank would be willing to sharply lift rates with analysts saying the nominally independent institution is under the influence of Erdogan, who wants low rates to keep growth humming.

Erdogan after winning June 24 elections with revamped powers tightened his control over the central bank and appointed his son-in-law Berat Albayrak to head a newly-empowered finance ministry.

“President Erdogan’s strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilise the economy,” said William Jackson, chief emerging markets economist at Capital Economics in London.

He said the lira’s fall was being exacerbated by fears the central bank “isn’t being permitted to raise interest rates”.

– ‘Accelerating speed’ –

Concerns were intensified Friday by a report in the Financial Times that the supervisory wing of the European Central Bank (ECB) had over the last weeks began to look more closely at euro zone lenders’ exposure to Turkey.

The report said that the situation is not yet seen as “critical” but Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas are regarded as particularly exposed.

“Investors have been looking at the unfolding currency crisis in Turkey as a local difficulty, however the accelerating speed of the declines appears to be raising concerns about European banks exposure to the Turkish banking system,” said Michael Hewson, chief market analyst at CMC Markets UK.

Albayrak, who formerly served as energy minister, is on Friday expected to announce what he has described as a “new economic model” for Turkey but markets remain sceptical.

The president did nothing to reassure markets with comments overnight that the pressure on the lira was due to what he described as a “variety of campaigns” and appearing to play down the magnitude of the crisis.

“If they have dollars, we have our people, we have our right and we have Allah!” he said.

The plunge in the lira has featured remarkably little on Turkish television channels and newspapers — most of which after recent ownership changes are loyal to the government — with most media focusing instead on recent flooding by the Black Sea.

© 2018 AFP

Iran’s former hard-line president asks Rouhani to resign – Israel Hayom

August 10, 2018

Source: Iran’s former hard-line president asks Rouhani to resign – Israel Hayom

Hamas interprets Israeli restraint as weakness 

August 10, 2018

Source: Hamas interprets Israeli restraint as weakness – Israel Hayom

Israel needs to intensify pressure on Hamas‎ 

August 10, 2018

Source: Israel needs to intensify pressure on Hamas‎ – Israel Hayom

The advantages of a cease-fire – Israel Hayom

August 10, 2018

Source: The advantages of a cease-fire – Israel Hayom

Reasons for restraint 

August 10, 2018

Source: Reasons for restraint – Israel Hayom

Dr. Eran Lerman

Why hasn’t the Israel Defense Forces used all of its force to combat the growing terrorism from the Gaza Strip? Not surprisingly, this is a question many Israelis are finding difficult to answer. For some, this frustration translates into blunt language directed at both the military and the political echelon. Yet even if Hamas foolishly drags Israel into a wide-scale conflict, the IDF has had three good reasons to adhere to its policy of containment and measured military responses.

The first consideration concerns Israel’s long-term interest in avoiding taking full and ongoing military control of Gaza, a possible outcome of an all-out military campaign; and the no less problematic possibility of a bloody draw, which could stem from a partial campaign. There can be no doubt the IDF is capable of subduing and controlling the escalation. The Hamas leadership is motivated by irrational urges, and so Israel prefers to try to manage its steps through the involvement of a third side – Egyptian intelligence, for example – who have a better chance of giving their interlocutors a clearer idea of the level of risk they are taking.

From this point, we can derive a second consideration: Israel has a role to play in the band of regional forces that raise the banner of stability and are partners in the fight against radical Islamism in all its forms, from Iran to the Islamic State. It is precisely because of this partnership that Israel must exhaust the potential for joint action with Egypt. Both countries view Hamas as an enemy, an enemy upon whom it would be best to deter than to engage in an all-out conflict, the outcome of which would be difficult to control.

A third consideration stems from the possible ramifications of embarking on a military campaign in the south at the height of what might quickly develop in a crisis in the north. Tensions between the United States and Iran, along with economic problems in Tehran, make it ever more likely that the Iranian regime will make some provocative moves. A watchful eye in the north demands that the IDF remain as available as possible to fortify deterrence against Israel’s chief enemy.

Col. (ret.) Dr. Eran Lerman, former deputy director of the National Security Council, is the vice president of the Jerusalem Institute for Strategic Studies.