Markets

The markets are alarmed about Turkey


A man takes a selfie in front of Hagia Sophia in Istanbul.
Picture: EPA

Falling stocks, weak foreign exchange market: Turkey’s economy and finances were considered unstable even before Corona. The recent weakness of the lira is also due to President Recep Tayyip Erdogan.

NTurkish connoisseurs like the former German ambassador to Ankara Martin Erdmann call the efforts of the Turkish President Recep Tayyip Erdogan eoosmanic to make the country a Muslim regional power in the Mediterranean region a good 100 years after the collapse of the Ottoman Empire. There are many examples of this: interventions in Iraq, Syria, Libya, the military base on the Red Sea, the search for natural gas off Cyprus despite opposition from neighbors and the EU, saber rattles in the Aegean, the conversion of Hagia Sophia into a mosque. But the strength that this gripping policy suggests rests on a fragile fiscal and economic policy basis.

Turkey has been living above its means for years, says Thomas Meißner, who has been following events there for a long time. Imports exceeded exports and the corona pandemic made the situation worse. The short-term dollar debt of the EU’s important trading partner, at $ 170 billion, is roughly the same as last year’s export earnings. “They are constantly heading for a balance of payments crisis,” says the Head of Strategy Research at Landesbank Baden-Württemberg. “It’s that time of the year again. The markets are alarmed. “

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