Tag Archives: Turkey

Turkey’s opposition strikes blow to Erdogan with Istanbul mayoral win

Ekrem Imamoglu, mayoral candidate of the main opposition Republican People's Party (CHP), greets supporters at a rally of in Beylikduzu district, in Istanbul, Turkey, June 23, 2019. REUTERS/Kemal Aslan

By Humeyra Pamuk and Jonathan Spicer

ISTANBUL (Reuters) – Turkey’s opposition has dealt President Tayyip Erdogan a stinging blow by winning control of Istanbul in a re-run mayoral election, breaking his aura of invincibility and delivering a message from voters unhappy over his ever tighter grip on power.

Ekrem Imamoglu of the secularist Republican People’s Party (CHP) secured 54.21% of votes, the head of the High Election Board announced on Monday – a far wider victory margin than his narrow win three months ago.

The previous result was annulled after protests from Erdogan’s Islamist-rooted AK Party, which said there had been widespread voting irregularities. The decision to re-run the vote was criticized by Western allies and caused uproar among domestic opponents who said Turkey’s democracy was under threat.

On Sunday and in the early hours Monday, tens of thousands of Imamoglu supporters celebrated in the streets of Istanbul after the former businessman triumphed over Erdogan’s handpicked candidate by almost 800,000 votes.

“In this city today, you have fixed democracy. Thank you Istanbul,” Imamoglu told supporters who made heart signs with their hands, in an expression of the inclusive election rhetoric that has been the hallmark of his campaigning.

“We came to embrace everyone,” he said. “We will build democracy in this city, we will build justice. In this beautiful city, I promise, we will build the future.”

Erdogan congratulated him for the victory and Imamoglu’s rival, Binali Yildirim of the ruling AK Party (AKP), wished him luck as mayor barely two hours after polls closed.

WANING SUPPORT

Erdogan has ruled Turkey since 2003, first as prime minister and then as president, becoming the country’s most dominant politician since its founder, Mustafa Kemal Ataturk, nearly a century ago.

His AKP has strong support among pious and conservative Turks and its stewardship of Turkey’s economy through a decade and a half of construction-fuelled growth helped Erdogan win more than a dozen national and local elections.

But economic recession and a financial crisis have eroded that support and Erdogan’s ever-tighter control over government has alarmed some voters.

Turkey’s lira tumbled after the decision to annul the March vote and is down 8% this year, in part on election jitters.

But assets rallied on Monday as investors welcomed the removal of one source of political uncertainty. The lira firmed 1% against the dollar, shares rose nearly 2% and bond yields fell.

Imamoglu won support even in traditionally pious Istanbul districts, once known as AK Party strongholds, ending the 25-year-long Islamist rule in the country’s largest city.

“This re-run (election) was one to put an end to the dictatorship,” said Gulcan Demirkaya, a 48-year-old housewife in Istanbul’s AKP-leaning Kagithane district. “God willing, I would like to see him as the president in five years’ time. The one-man rule should come to an end.”

FALLOUT IN ANKARA

The results are likely to trigger a new chapter in Turkish politics, now that the country’s top three cities now held by the opposition. Cracks could also emerge within Erdogan’s AKP, bringing the economic troubles more to the fore.

“This is definitely going to have an impact on the future of Turkish politics given the margin of victory. It’s alarming sign for the AKP establishment,” said Sinan Ulgen, visiting scholar at Carnegie Europe in Brussels and former Turkish diplomat.

Analysts say the loss could set off a Cabinet reshuffle in Ankara and adjustments to foreign policy. The leader of the AKP’s nationalist ally played down the prospect that the loss could even trigger a national election earlier 2023, when the next polls are scheduled.

“The election process should close,” MHP party leader Devlet Bahceli said. “Talking of an early election would be among the worst things that can be done to our country.”

The uncertainty over the fate of Istanbul and potential delays in broader economic reforms have kept financial markets on edge. Threats of sanctions by the United States if Erdogan goes ahead with plans to install Russian missile defenses have also weighed on the markets.

A Council of Europe delegation said its observers were given a “less than friendly reception” in some places and had “too many unnecessarily aggressive and argumentative encounters to ignore,” but that the election was conducted competently.

“The citizens of Istanbul elected a new mayor in a well-organized and transparent vote, albeit in tense circumstances,” delegation head Andrew Dawson said in a statement.

(Reporting by Humeyra Pamuk and Jonathan Spicer; Additional reporting by Ezgi Erkoyun, Ali Kucukgocmen and Daren Butler; Writing by Dominic Evans; Editing by Jon Boyle)

Erdogan does not expect U.S. sanctions over Russian S-400 deal

FILE PHOTO - Turkish President Recep Tayyip Erdogan attends talks with Iranian President Hassan Rouhani and Russian President Vladimir Putin, during their meeting in the Black sea resort of Sochi, Russia, 14 February 2019. Sergei Chirikov/Pool via REUTERS

By Jonathan Spicer and Humeyra Pamuk

ISTANBUL (Reuters) – President Tayyip Erdogan said on Thursday he did not expect the United States to impose sanctions over Turkey’s planned purchase of a Russian missile defense system, but he would retaliate if it did.

Speaking at a rare news conference for foreign media in Istanbul, Erdogan repeated that the purchase of Russian S-400 systems was a done deal and said the United States should think carefully before imposing sanctions on a NATO member.

“I do not see any possibility of these sanctions happening,” Erdogan said. However, if they did, “we will have sanctions of our own”.

Washington has repeatedly threatened to impose sanctions unless Ankara backs down from the S-400 purchase. Erdogan said the delivery of the system would start in the first half of July.

His expectation of no sanctions appeared largely based on his personal relationship with President Donald Trump. “I say this very openly and sincerely, our relations with Trump are at a place that I can call really good … In the event of any issues, we immediately work the phones,” Erdogan said.

He said he would discuss the issue with Trump at the G20 summit in Japan at the end of June, and that the problem was largely with other U.S. officials. “When we have talks with those below Trump, we see that many cannot agree with our officials, and one example is the S-400,” he said.

Turkey and the United States have been at loggerheads over the issue for months. Washington says the S-400 is incompatible with NATO’s defense network and could compromise its F-35 fighter jets, an aircraft Turkey is helping build and planning to buy.

Buying military equipment from Russia leaves Turkey liable to U.S. retribution under a 2017 law known as the Countering America’s Adversaries Through Sanctions Act, or CAATSA.

Even minor U.S. sanctions could prompt another sharp sell-off in the Turkish lira. A 30 percent slide in the currency drove the Middle East’s largest economy into recession last year. It has fallen another 10 percent this year and markets remain on edge.

Erdogan said Turkey wanted to buy Patriot missiles from the U.S. but that offer was in no way comparable to Russia’s.

He said Turkey would appeal to international courts and ask for its F-35 payments to be refunded if needed.

(Additional reporting by Ali Kucukgocmen and Canan Sevgili; Writing by Humeyra Pamuk; Editing by Daren Butler and John Stonestreet)

Has ‘the sacrificial lamb’ arrived?: U.N. cites new recordings in Khashoggi murder

FILE PHOTO: Participants take photos next to a picture of Saudi Crown Prince Mohammed bin Salman during the Misk Global Forum in Riyadh, Saudi Arabia, November 14, 2018. REUTERS/Faisal Al Nasser/File Photo

RIYADH (Reuters) – Moments before Saudi journalist Jamal Khashoggi was killed and dismembered last October, two of his suspected murderers laying in wait at the kingdom’s Istanbul consulate fretted about the task at hand, according to a U.N. report published on Wednesday.

Will it “be possible to put the trunk in a bag?” asked Maher Mutreb, a Saudi intelligence officer who worked for a senior advisor to Saudi crown prince, according to a report from the U.N. special rapporteur on extrajudicial executions.

“No. Too heavy,” responded Salah al-Tubaigy, a forensic doctor from the Interior Ministry who would dismember and dispose of the body. He expressed hope his task would “be easy”.

Tubaiqy continued: “Joints will be separated. It is not a problem. The body is heavy. First time I cut on the ground. If we take plastic bags and cut it into pieces, it will be finished. We will wrap each of them.”

Mutreb and 10 others are now standing trial in closed hearings in Saudi Arabia for their role in the crime.

Saudi Arabia’s minister of state for foreign affairs, Adel al-Jubeir, rejected the investigator’s report as “nothing new”.

He added in a tweet: “The report of the rapporteur in the human rights council contains clear contradictions and baseless allegations which challenge its credibility.”

The report, which calls for Crown Prince Mohammed bin Salman and other senior Saudi officials to be investigated over their liability for Khashoggi’s death, relies on recordings and forensic work conducted by Turkish investigators and information from the trials of the suspects in Saudi Arabia.

Khashoggi, a critic of the prince and a Washington Post columnist, was last seen at the consulate where he was to receive papers ahead of his wedding.

TEXT MESSAGE

The report concludes that his murder was deliberate and premeditated. The CIA and some Western countries believe the crown prince ordered the killing, which Saudi officials deny.

Media reports have published the contents of some recordings obtained from inside the consulate, but the U.N. report discloses chilling new details.

At the end of the exchange with Tobaigy, Mutreb asks if “the sacrificial lamb” has arrived. At no point is Khashoggi’s name mentioned, but two minutes later he enters the building.

Khashoggi is ushered to the consul general’s office on the second floor where he meets Mutreb, whom he knew from when they worked together at the Saudi Embassy in London years earlier.

Mutreb tells Khashoggi to send his son a mobile text message.

“What should I say? See you soon? I can’t say kidnapping,” Khashoggi responds.

“Cut it short,” comes the reply. “Take off your jacket.”

“How could this happen in an embassy?” Khashoggi says. “I will not write anything.”

“Type it, Mr. Jamal. Hurry up. Help us so that we can help you because at the end we will take you back to Saudi Arabia and if you don’t help us you know what will happen at the end; let this issue find a good end,” Mutreb says.

The report says the rest of the recordings contain sounds of movement, heavy panting and plastic sheets being wrapped, which Turkish intelligence concluded came after Khashoggi’s death as Saudi officials dismembered his body.

(Reporting By Stephen Kalin, Editing by William Maclean)

Turkey chafes at U.S. pressure over Russian defenses

FILE PHOTO: A view shows a new S-400 "Triumph" surface-to-air missile system after its deployment at a military base outside the town of Gvardeysk near Kaliningrad, Russia March 11, 2019. REUTERS/Vitaly Nevar/File Photo

By Daren Butler

ISTANBUL (Reuters) – Turkey said on Tuesday a U.S. House of Representatives’ resolution condemning Ankara’s purchase of Russian defense systems and urging potential sanctions was unacceptably threatening.

Relations between the two NATO members have been strained on several fronts including Ankara’s plans to buy Russia’s S-400 air defense systems, the detention of U.S. consular staff in Turkey, and conflicting strategy over Syria and Iran.

The standoff threatens to bring U.S. sanctions, which would hurt Turkey’s already recession-hit economy, and raise questions over its role in the North Atlantic Treaty Organization.

The resolution, introduced in May and entitled “Expressing concern for the United States-Turkey alliance”, was agreed in the House on Monday.

It urges Turkey to cancel the S-400 purchase and calls for sanctions if it accepts their delivery, which may come as soon as July. That, the resolution said, would undermine the U.S.-led transatlantic defense alliance.

In response, Turkey’s Foreign Ministry said in a statement that its foreign policy and judicial system were being maligned by “unfair” and “unfounded” allegations in the resolution.

“It is unacceptable to take decisions which do not serve to increase mutual trust, to continue to keep the language of threats and sanctions on the agenda and to set various artificial deadlines,” it added.

PILOT PROGRAM WOUND DOWN

President Tayyip Erdogan’s government faces a balancing act in its ties with the West and Russia, with which it has close energy ties and is also cooperating in neighboring Syria.

The United States is also pressuring Turkey and other nations to isolate Iran, including blocking oil exports.

U.S. officials said on Monday the training of Turkish pilots on F-35 fighter jets had come to a faster-than-expected halt at an air base in Arizona, as Ankara’s involvement was wound down over the S-400 controversy.

The United States says Turkey’s acquisition of Russia’s S-400 air defenses poses a threat to Lockheed Martin Corp’s F-35 stealth fighters, which Turkey also plans to buy.

“We rarely see it in foreign affairs, but this is a black and white issue. There is no middle ground. Either Mr. Erdogan cancels the Russian deal, or he doesn’t,” Eliot Engel, chairman of the House Committee on Foreign Affairs, said on the House floor on Monday.

“There is no future for Turkey having both Russian weapons and American F-35s. There’s no third option.”

Regardless of the U.S. warnings, Turkey appeared to be moving ahead with the S-400 purchase. Erdogan said last week it was “out of the question” for Turkey to back away from its deal with Moscow.

(Reporting by Daren Butler; Editing by Jonathan Spicer and Andrew Cawthorne)

U.S. to stop training Turkish F-35 pilots because of Russia deal: sources

FILE PHOTO: A Lockheed Martin F-35 aircraft is seen at the ILA Air Show in Berlin, Germany, April 25, 2018. REUTERS/Axel Schmidt/File Photo

By Phil Stewart and Humeyra Pamuk

WASHINGTON/ISTANBUL (Reuters) – The United States has decided to stop accepting any more Turkish pilots who had planned to train in the United States on F-35 fighter jets, three U.S. officials said, in a sign of an escalating dispute over Ankara’s plans to purchase Russian air defenses. The two NATO allies have sparred publicly for months over Turkey’s order for Russia’s S-400 air defense system, which Washington says poses a threat to the Lockheed Martin Corp F-35 stealthy fighters, which Turkey also plans to buy.

The United States says Turkey cannot have both, but had avoided taking steps to curtail or halt planned training of Turkish pilots in the program, a reprisal that could be seen as an embarrassment in Turkey.

The three U.S. officials, who spoke to Reuters this week on condition of anonymity, left open the possibility the decision could be reversed, perhaps if Turkey altered its plans. They said the decision so far only applied to upcoming rounds of Turkish pilots and maintenance crews who would have normally trained in the United States.

Reuters was first to report the U.S. decision on pilots, which traders said pressured the Turkish lira on Friday.

A spokesman for Turkey’s Defense Ministry declined comment on Friday.

The Pentagon declined comment on whether it would accept new Turkish pilots. But it has stressed discussions are taking place with Ankara on potentially selling Turkey Patriot missile defenses, which are made by Raytheon Co.

The United States also has threatened to halt training of Turkish pilots and maintenance crews already in the United States, two of the officials said. Reuters reported last week that the step was being seriously considered.

One official said the pilots in the United States could be removed by the end of July.

Four Turkish pilots are currently training at Luke Air Force Base in Arizona. Two additional Turkish pilots are there working as instructors. Beyond those six Turkish officers, there are an additional 20 Turkish aircraft maintainers at the base undergoing training as well, the U.S. military says.

Turkey has expressed an interest in buying 100 of the fighters, which would have a total value of $9 billion at current prices.

STRAINED RELATIONSHIP

If Turkey were removed from the F-35 program, it would be one of the most significant ruptures in recent history in the relationship between the two allies, experts said.

Strains in their ties already extend beyond the F-35 to include conflicting strategy in Syria, Iran sanctions and the detention of U.S. consular staff in Turkey.

The disclosure of the decision on the pilots follows signs that Turkey is moving ahead with the S-400 purchase. Defense Minister Hulusi Akar said on May 22 that Turkish military personnel were receiving training in Russia to use the S-400, and that Russian personnel may go to Turkey.

President Tayyip Erdogan said on Tuesday it was “out of the question” for Turkey to back away from its deal with Moscow.

Erdogan said the United States had not “given us an offer as good as the S-400s.”

The Turkish lira declined as much as 1.5% on Friday before recovering some losses. The currency has shed nearly 10% of its value against the dollar this year in part on fraying diplomatic ties and the risk of U.S. sanctions if Turkey accepts delivery of the S-400s.

Kathryn Wheelbarger, one of the Pentagon’s most senior policy officials, said last week that Turkey’s completion of the transaction with Russia would be “devastating,” dealing heavy blows to the F-35 program and to Turkish interoperability within the NATO alliance.

“The S-400 is a Russian system designed to shoot down an aircraft like the F-35,” said Wheelbarger, an acting assistant secretary of defense. “And it is inconceivable to imagine Russia not taking advantage of that (intelligence) collection opportunity.”

(Reporting by Phil Stewart and Humeyra Pamuk; Additional reporting by Dominic Evans, Mike Stone and Ece Toksabay; Editing by Mary Milliken, Peter Cooney and Howard Goller)

Turkey breaks up smuggling ring that brought thousands of migrants to Europe

FILE PHOTO: Migrants in a dinghy paddle their way on the Mediterranean Sea to attempt crossing to the Greek island of Kos, as a Turkish Coast Guard ship patrols off the shores off Bodrum, Turkey, September 19, 2015. REUTERS/Umit Bektas/File Photo

ISTANBUL (Reuters) – Turkish police said on Wednesday they had detained the leaders of what they called Europe’s biggest people-smuggling ring, which helped thousands of irregular immigrants reach Europe from the Middle East.

Twenty people, including ringleader Akbar Omar Tawfeeq, were detained in operations in four Turkish provinces after a year-long investigation into the organization, Istanbul police said.

The network mainly helped Afghan, Iraqi and Syrian nationals cross into European countries from Turkey by land and sea, police said, adding that the group had also worked with other smuggling groups in Ukraine, Italy and Greece.

As part of the operations, police detained 569 irregular immigrants and seized six vehicles and six boats, they said in a statement. The smuggling group, whose leaders are mainly from northern Iraq, earned an average 2 million euros annually.

Video footage released by police showed special operations police breaking down the door of the suspects’ residence and seizing phones, drugs and digital material.

More than a million migrants and refugees, many fleeing conflict and poverty in the Middle East and Africa, arrived in the European Union in 2015. Turkey was one of the main launch points for the dangerous sea leg of their journey, on which thousands died.

Numbers declined sharply in the following year when Turkey, in exchange for 3 billion euros in European Union aid and a promise to ease visa restrictions for Turks, began to exert more control on migrants trying to cross to Europe via its territory.

Overall Mediterranean arrivals to the European Union, including migrants making the longer and more perilous crossing from north Africa to Italy, stood at 172,301 in 2017, down from 362,753 in 2016 and 1,015,078 in 2015, according to U.N. data.

(Reporting by Ali Kucukgocmen; Editing by Dominic Evans and Frances Kerry)

Turkey detains 127 people in Istanbul on May Day

Police detain a protester after marching on Taksim Square to celebrate May Day in Istanbul, Turkey May 1, 2019. REUTERS/Murad Sezer

ISTANBUL (Reuters) – Istanbul police said they detained 127 people on Wednesday for attempting to hold illegal demonstrations in various parts of the city to celebrate May Day.

Police had cordoned off Istanbul’s central Taksim square, but small groups of demonstrators converged on it anyway.

“Squares belong to the people, they cannot be closed off. Long live May 1,” protesters yelled there, as police hauled them away, covering their mouths to stop them chanting.

Protests for May Day, the international workers’ holiday, are an annual occurrence in Turkey and have in the past been characterized by police action against demonstrators. Protests have often centered on Taksim square where 34 people were killed during demonstrations on May 1, 1977.

Earlier in the day, police had allowed a ceremony by union leaders to be held at Taksim Square, and another group laid carnations on a street nearby.

Authorities allowed celebrations to be held in the Bakirkoy district, which is located some distance from the city center.

By 1300 GMT, Istanbul police said they had detained 127 demonstrators in various parts of the city, including the central districts of Besiktas, Sisli and Beyoglu.

In Besiktas a small group of protesters spontaneously began shouting slogans and waving red flags of the leftist People’s Libration Party (HKP). Footage from the scene showed police scuffling with protesters, rounding some of them up and putting them in police vans.

Ozgur Karabulut, general manager of Dev Yapi-Is Union, said the celebrations were continuing smoothly in Bakirkoy, with participants from all parts of society.

(Reporting by Murad Sezer, Ali Kucukgocmen and Bulent Usta; Editing by Peter Graff)

Erdogan’s AK Party challenges Istanbul, Ankara election results

Supporters of Ekrem Imamoglu, main opposition Republican People's Party (CHP) candidate for mayor of Istanbul, wait for him to visit Anitkabir, the mausoleum of modern Turkey's founder Mustafa Kemal Ataturk, in Ankara, Turkey, April 2, 2019. REUTERS/Umit Bektas

By Daren Butler and Tuvan Gumrukcu

ISTANBUL/ANKARA (Reuters) – President Tayyip Erdogan’s AK Party has submitted objections to local election results in all districts of Istanbul and Ankara, party officials said on Tuesday, after results showed the opposition earned narrow victories in both cities.

The AK Party is on track to lose control of what are Turkey’s two biggest cities, its commercial hub of Istanbul and the capital Ankara, in a surprise election setback that may complicate Erdogan’s plans to combat recession.

In Istanbul, the mayoral candidate of the main opposition Republican People’s Party (CHP), Ekrem Imamoglu, and his AKP rival, ex-prime minister Binali Yildirim, both said on Monday Imamoglu was around 25,000 votes ahead. Istanbul has an estimated total population of 15 million.

The AKP had previously said it would use its right to object to the results where there were voting irregularities, adding that the errors at the ballots had affected the outcome.

On Tuesday, Bayram Senocak, the AKP’s Istanbul head said that objections had been submitted by the 3 p.m. (1200 GMT) deadline for appeals, and added that legal action would be taken against electoral officials who made the errors.

“We have submitted all our appeals to the district electoral councils,” Senocak said, as he waved ballot records in which he said vote count irregularities could be seen.

An AKP deputy chairman later said the difference between Imamoglu and Yildirim was down to 20,509 votes and would keep falling as a result of their appeals. He said the elections were “the biggest blemish in Turkish democratic history.”

The CHP’s Istanbul head Canan Kaftancioglu said her party submitted objections in 22 districts, adding they expected to receive 4,960 more votes after the appeals were resolved.

“They are trying to steal the will of the people as it was reflected in the ballots,” she told reporters in Istanbul.

The CHP’s Imamoglu said on Tuesday he was saddened by the AKP failure to congratulate him after the election board count put him ahead.

“I’m watching Mr Binali Yildirim with regret. You were a minister of this nation, the parliament speaker and a prime minister,” Imamoglu said in Istanbul. “What could be more noble than congratulating?”

“The world is watching us with shame right now. We are ready to manage the big city of Istanbul. Let go and congratulate us with honor, so we can do our job,” he said.

“MOMENT OF BEGINNING”

Ahead of the elections, the CHP had formed an electoral alliance with the Iyi (Good) Party to rival that of the AKP and their nationalist MHP partners. The alliances nominated joint candidates in certain cities, including Ankara and Istanbul.

Imamoglu, who laid a wreath at the mausoleum of modern Turkey’s founder, Mustafa Kemal Ataturk, in Ankara, later went to CHP headquarters to meet Mansur Yavas, the opposition’s candidate in the capital. Speaking at the CHP building, Imamoglu said the elections marked a “moment of beginning” for Turkey.

In Ankara, Yavas received 50.9 percent of votes, ahead of his AKP rival and former minister Mehmet Ozhaseki in Sunday’s local elections by nearly 4 percentage points. The AKP said it had also submitted objections to results across Ankara.

Defeats in Ankara and Istanbul would be a significant setback for Erdogan, who has dominated Turkish politics for more than 16 years. He had campaigned relentlessly ahead of the vote, describing it as a “matter of survival” for the country.

Erdogan’s political success has rested on years of stellar economic growth in Turkey, but an economic recession that has brought surging inflation and unemployment and a plunging lira currency have taken their toll on his popularity.

Uncertainty generated by the local elections has added to pressure on the lira, which weakened sharply last week as a lack of confidence in the currency among Turks led them to snap up record holdings of dollars and gold.

On Tuesday the lira weakened more than 2 percent against the dollar on concerns about tensions with the United States after it halted delivery to Turkey of equipment related to the F-35 fighter aircraft.

(Reporting by Ezgi Erkoyun and by Tuvan Gumrukcu; Additional reporting by Ece Toksabay; Writing by Tuvan Gumrukcu and Daren Butler; Editing by Dominic Evans. Gareth Jones, William Maclean)

Turkish lira down as U.S. halts fighter parts delivery, threatens sanctions

FILE PHOTO: Turkish Lira banknotes are seen in this October 10, 2017 picture illustration. REUTERS/Murad Sezer/Illustration/File Photo

By Sarah Dadouch

ISTANBUL (Reuters) – The lira dropped nearly 3 percent on Tuesday after the United States halted delivery of equipment related to a Turkish order of F-35 fighter planes, warning Ankara’s insistence on buying Russian defense systems risked triggering sanctions.

At 1634 GMT, the lira stood at 5.6590 against the dollar, having earlier fallen 3.3 percent to as low as 5.6800.

The Turkish currency lost nearly 30 percent against the dollar last year in a sell-off sparked by concerns over the independence of the central bank and exacerbated by worsening ties with Washington.

“Factors behind last year’s currency crisis have reared their heads again,” said Jason Tuvey, senior emerging markets economist at Capital Economics.

Washington and other NATO allies are concerned that radar on the Russian S-400 missile system that Turkey is also buying will learn how to track the F-35, making it less able to evade Russian weapons.

A senior U.S. official said the purchase of the S-400 risked triggering sanctions.

Acting Defense Secretary Patrick Shanahan said later on Tuesday he expected to resolve the dispute, but his comments had little impact on the lira.

The row marks the latest in a series of bilateral disputes, notably over Turkish demands that the United States extradite Islamic cleric Fethullah Gulen, differences over Middle East policy and the war in Syria, and sanctions on Iran.

STRUCTURAL PROBLEMS

The lira has also been under pressure from domestic political developments.

Currency volatility in the run-up to local elections on Sunday led the central bank to suspend one-week repo auctions, a move seen by analysts as a “back door” tightening that reignited worries that the central bank was under pressure from politicians to lower its policy rate.

The lira lost as much as 2.5 percent against the dollar on Monday after results showed President Tayyip Erdogan’s AK Party on track to lose control of both Ankara and Istanbul, his popularity hit by the recession that the lira’s losses in large part triggered.

The AKP submitted objections to the results in all districts of both cities, party officials said on Tuesday.

“The lira is under pressure as now the focus is back on structural problems for the Turkish economy,” said Nikolay Markov, a senior economist at Pictet Asset Management.

A widening current account deficit could deepen the recession through a further lira depreciation, leading to higher inflation and borrowing costs, Markov said.

“The central bank should raise policy rates but that won’t happen because of pressure from the government,” although AKP electoral losses could reduce that pressure, he said.

(Reporting by Ezgi Erkoyun and Sarah Dadouch; Additional Reporting by Tom Arnold in London; Editing by Dominic Evans and John Stonestreet)

U.S. sends message to Turkey, halts F-35 equipment shipments

FILE PHOTO: A Lockheed Martin F-35 aircraft is seen at the ILA Air Show in Berlin, Germany, April 25, 2018. REUTERS/Axel Schmidt/File Photo

By Mike Stone and Humeyra Pamuk

WASHINGTON (Reuters) – The United States has halted delivery of equipment related to the stealthy F-35 fighter aircraft to Turkey, a Pentagon spokesman said on Monday, marking the first concrete U.S. step to block delivery of the jet to the NATO ally in light of Ankara’s planned purchase of a Russian missile defense system.

In recent days, U.S. officials told their Turkish counterparts they will not receive further shipments of F-35 related equipment needed to prepare for the arrival of the stealthy jet, two sources familiar with the situation told Reuters on Monday.

Turkish President Tayyip Erdogan has refused to back down from Ankara’s planned purchase of a Russian S-400 missile defense system that the United States has said would compromise the security of F-35 aircraft.

“Pending an unequivocal Turkish decision to forgo delivery of the S-400, deliveries and activities associated with the stand-up of Turkey’s F-35 operational capability have been suspended,” Air Force Lieutenant Colonel Mike Andrews, a Defense Department spokesman, said in a statement.

Turkey has said it will take delivery of the S-400s in July.

The sources, who spoke on condition of anonymity, told Reuters the next shipment of training equipment, and all subsequent shipments of F-35 related material, had been canceled. The aircraft is built by Lockheed Martin Corp.

The disagreement over the F-35 is the latest of a series of diplomatic disputes between the United States and Turkey including Turkish demands that the United States extradite Islamic cleric Fethullah Gulen, differences over Middle East policy and the war in Syria, and sanctions on Iran.

A Pentagon official had told Reuters in March that the United States had a number of items it could withhold in order to send Turkey a signal that the United States was serious about Ankara dropping its ambition to own the S-400.

Turkish officials in Ankara were not immediately available for comment.

NATO SUMMIT

The U.S. decision on the F-35s was expected to complicate Turkish Foreign Minister Mevlut Cavusoglu’s planned visit to Washington this week for a NATO summit. The latest development in the F-35 dispute came a day after Erdogan suffered one of his biggest electoral losses in decades in local elections.

Reuters reported last week that Washington was exploring whether it could remove Turkey from the production of the F-35. Turkey makes parts of the fuselage, landing gear and cockpit displays. Sources familiar with the F-35’s intricate worldwide production process and U.S. thinking on the issue last week said Turkey’s role can be replaced.

The United States and other NATO allies that own F-35s fear the radar on the Russian S-400 missile system will learn how to spot and track the jet, making it less able to evade Russian weapons in the future.

In an attempt to persuade Turkey to drop its plans to buy the S-400, the United States offered the pricier American-made Patriot anti-missile system in a discounted deal that expired at the end of March. Turkey has shown interest in the Patriot system, but not at the expense of abandoning the S-400.

Turkey has engaged with U.S. negotiators in recent days about buying the Patriot system, a person familiar with the matter said on condition of anonymity. The system is made by Raytheon Co.

Turkish Defense Minister Hulusi Akar in March said that despite some issues, Turkish pilots were continuing their training at an air base in Arizona on the F-35, each of which costs $90 million, and that Ankara was expecting the aircraft to arrive in Turkey in November.

U.S. lawmakers also have expressed alarm over Turkey’s planned purchase of the Russian system. Four U.S. senators last week introduced a bipartisan bill that would prohibit the transfer of F-35s to Turkey until the U.S. government certifies that Ankara will not take delivery of the S-400 system.

(Reporting by Mike Stone and Humeyra Pamuk in Washington; Editing by Chris Sanders and Will Dunham)