The reign of Yildirim starts with great peril

TURKEY - In Brief 23 May 2016 by Atilla Yesilada

---

AKP’s unanimously elected chairman Mr. Binali Yildirim was appointed by 7 pm Sunday as PM-designate by president Erdogan. He is expected to unveil his Cabinet on Tuesday, the first task of which will be the introduction of a mini package of constitutional amendments to the Grand Assembly to allow the president to retain his party affiliation (semi-presidential system). Mr. Yildirim takes over the helm at a time of great peril for Turkey, where he will act at best as the spokesperson and executor of the policies crafted by Erdogan. The choices to be made by the duo in the next 30 days could change Turkish political history. This update provides a brief review and predictions of the main events to come. AKP’s extraordinary convention also witnessed the departure of half of the Central Administrative and Executive Committee, one of the two highest decision-making bodies of the party. Notable by their absence were names like the Finance Minister Mr. Naci Akbal, Labor Minister Mr. Suleyman Soylu and deputy PM Mr. Numan Kurtulmus. I don’t know whether they were let go because of disagreements with Erdogan, or so that they can better focus on their new jobs in the cabinet. More importantly, most of the news emanating from AKP ranks suggests that Mehmet Simsek will not be in the new cabinet, to be replaced by Mr. Nurettin Canikli or Erdogan’s son in law Mr. Berat Albayrak. Parenthetically, while the Dollar Index rose by 0.8% last week, TL dropped only 0.6% against the dollar, suggesting that neither a 50 basis point O/N lending rate cut by CBRT nor the departure of Mr. Simsek are fully priced by the investors at this juncture. Tuesday could prove extremely turbulent in the mar...