IKV’s Trustee Organisations:

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ISSUE: 42 AUGUST-SEPTEMBER 2018 www.ikv.org.tr / contact: [email protected] 4TH RAG MEETING REAFFIRMED ’S COMMITMENT TO EU REFORMS Meeting after a three-year break, the RAG underlined Turkey’s determination to step up political reforms in line with its EU membership perspective.

he 4th meeting of the Reform Action Group (RAG) was Theld on 29 August 2018, in Ankara under the chairmanship of the Minister of Foreign Affairs and Chief Negotiator Mevlüt Çavuşoğlu with the participation of Minister of Justice Abdulhamit Gül, Minister of Treasury and Finance Dr. Berat Albayrak and Minister of Interior Süleyman Soylu. Turkish Grand National Assembly’s Committee on Foreign Affairs Chair Volkan Bozkır and Committee on EU Harmonisation Chair Mehmet Kasım Gülpınar, Chairman of the Turkey- EU Joint Parliamentary Committee İsmail Emrah Karayel and the Chief Ombudsman Şeref Malkoç were also present during the meeting. The group, formerly called “Reform Monitoring Group,” held its first meeting after a three-year break. Moreover, the RAG meeting in Ankara was significant for being the first of its kind following Turkey’s transition to the executive presidency system. RAG meetings have been instrumental in monitoring the implementation of reforms on the way to EU accession on the basis of Turkey’s compliance with emergency rule, Turkey withdrew of the new Judicial Reform Strategy the commitment to the Turkey-EU accession negotiations, chapters the political criteria as well as the its derogations from Article 4 of by the end of 2018, the main goal of Statement and the refugee deal. 23 and 24 covering the rule of law developments concerning the the UN Covenant on Civil and which is enhancing the accessibility Lastly, ongoing key negotiation issues were brought to the table. The chapters on judiciary, civil liberties, Political Rights and Article 15 of the and quality of justice. As an integral areas namely; the Turkey-EU RAG called for the opening of those freedoms and security. During the European Convention on Human part of this reform process, the Visa Liberalisation Dialogue, two chapters and as reflected in the previous period, many decisions Rights (ECHR). This step has been competence of the Human Rights modernisation of the Customs Union press release issued by the Ministry in terms of accelerating Turkey-EU welcomed by the EU. The positive Compensation Commission was as well as EU accession negotiations of Foreign Affairs. It was underscored accession negotiations, reforming atmosphere has been reflected on expanded by the legislation that were brought to the agenda. that the opening of those chapters the judicial system, preparing the press conference held by the entered into force on 31 July 2018. Regarding visa liberalisation, Minister would facilitate Turkey’s reform proposals for political reforms have four ministers following the RAG And, as agreed upon during the Çavuşoğlu pointed to the fulfilment and alignment efforts. As the final been made just after the so-called meeting. The ministers started their RAG meeting, bold moves targeting of another Visa Liberalisation point, the RAG underlined with RAG meetings. Therefore, it is critical remarks by underlining that utmost sexual harassment of children are Roadmap chapter which has to a tremendous enthusiasm that to take a snapshot of the meeting’s importance would be given to foreseen in the near future. do with the alignment of Turkish Turkey would continue its reform outcomes. bolstering the EU Departments of Regarding the home affairs and passports to EU standards. Currently, efforts with determination in the the Ministries which are experienced internal security arrangements, there remain 6 more criteria to be forthcoming period in line with The RAG, the Reform Agenda in coordinating and conducting the reforms foreseen would fulfilled. And Minister Çavuşoğlu, its EU membership perspective. and Expectations relations with the EU. most probably tackle the issues during the press meeting, called Turkey’s commitment to increase The RAG meeting took place In terms of the justice sector, of mobility and organised crime. for bona fide from the EU side the level of standards in the area just after the termination of the the ministers emphasised their The participants of the RAG concerning the visa liberalisation of political reforms has been state of emergency. By ending expectations towards the updating meeting once again reaffirmed issue. Furthermore, in regard to the highlighted.

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IKV AGENDA

TURKEY-EU JCC TURKEY WING REPRESENTATIVES WERE RECEIVED BY PRESIDENT ERDOĞAN

resident Recep Tayyip Erdoğan received of Public Servants’ Trade Unions (MEMUR- Pthe representatives of the Turkey-EU SEN) President Ali Yalçın, HAK-İŞ Trade Union Joint Consultative Committee (JCC) Turkey Confederation President Mahmut Arslan, wing. The delegation, which was led by Turkey Public Workers Unions Confederation the Union of Chambers and Commodity (KAMU-SEN) President Önder Kahveci Exchanges of Turkey (TOBB) President M. Rifat and Turkish Confederation of Employer Hisarcıklıoğlu, was made up of Confederation Associations (TISK) President Kudret Önen. of Turkish Tradesmen and Craftsmen (TESK) The reception was also attended by several President Bendevi Palandöken, Confederation ministers.

AYHAN ZEYTİNOĞLU RECONFIRMED AS IKV CHAIRMAN AT IKV GENERAL ASSEMBLY

Assembly, TOBB Vice-President Tamer objective of the improvement in and trustee organisations’ and Kıran, ISO President Erdal Bahçıvan the relations is the realisation of full particularly TOBB’s valuable supports, and ITO Vice-President İsrafil Kuralay membership, which is our ultimate as ‘Turkey’s EU expert’, we envisage to representing the founder and trustee objective. Despite the existence continue working hard with respect organisations delivered speeches. of considerable opposition in the to our country’s relations with the They pointed out that the EU EU nowadays, we must remember EU and focusing on international membership perspective has become that perceptions and decisions developments from the perspective increasingly prominent and that IKV could change rapidly. In a world, of the development, democratisation as “Turkey’s EU expert” plays a crucial in which we experience extremely and integration of our country in the role in this process. Representatives of rapid and dramatic changes in global system. We will strive to meet the trustee organisations recalled EU’s international conditions, Turkey’s our challenges and provide benefits significance in Turkey’s foreign trade EU membership may be possible in which are well beyond what is and foreign investment and voiced the medium term, provided that the expected of us.” the business community’s expectation necessary conditions are met and IKV’s new Board of Directors for the revival of the EU accession political will exists. At this point, as is composed of Ayhan Zeytinoğlu, process. representatives of civil society and Prof. Dr. Halûk Kabaalioğlu, Zeynep During his opening speech, the business community, we should Bodur Okyay, Atila Menevşe, Yavuz Chairman Zeytinoğlu welcoming that closely monitor the EU and the Canevi, Zeynel Abidin Erdem, Sedat yhan Zeytinoğlu was reconfirmed as well as supporting organisations Turkey-EU relations are on the course world, examine the impacts of the Zincirkıran, Ali Sami Aydın, Nevzat Aas the Chairman of IKV’s Board and delegates, IKV Chairman Ayhan of normalisation pointed that visa developments in our country, and Seyok, Levent Taş, Mehmet Kaya, of Directors during IKV’s 56th General Zeytinoğlu delivered an opening liberalisation and the modernisation contribute to reaching EU norms and Ömer Gülsoy, Süleyman Uyar, Yavuz Assembly which was held on 30 July speech on the foundation’s activities of the Customs Union could lead to a standards.” Altun, Işınsu Kestelli, Simone Kaslowski 2018. During the meeting, which was in the period from July 2017 to July revitalisation in the relations. Finally, Chairman Zeytinoğlu and İsmail Gülle, while the Audit attended by representatives of the 2018. Chairman Zeytinoğlu continued indicated the following: “First of all, Committee is composed of Hasan founder and trustee organisations At the opening of the General as follows: “Consequently, the essential on behalf of all our dear founder Hüseyin Coşkun and Mustafa İçöz. IKV CHAIRMAN PAID A VISIT TO HEAD OF EU DELEGATION TO TURKEY THE TIM CHAIRMAN AMBASSADOR BERGER VISITED IKV

ead of the EU Delegation to Turkey Chairman Zeytinoğlu gave information about Ambassador Christian Berger visited IKV IKV’s research and activities for the upcoming KV Chairman Ayhan Zeytinoğlu and the visit, IKV Chairman Ayhan Zeytinoğlu H on 14 September 2018 and came together period. During the visit, Ambassador Berger was Secretary General Assoc. Prof. Çiğdem conveyed his wish of success for İsmail I with IKV Chairman Ayhan Zeytinoğlu. In the accompanied by Head of Unit for Trade Bartosz Nas visited Turkish Exporters Assembly Gülle, who has been elected as the meeting, during which recent developments Przywara and Sector Manager for Internal Market (TIM) and met with Chairman İsmail Gülle chairman at the occasion of the 25th TİM in Turkey-EU relations were discussed, IKV and Industrial Policy Ela Yazıcı İnan. on 14 September 2018. In the context of General Assembly.

 ISSUE 42 . August-September 2018 19 65 1965 www.ikv.org.tr 19 65 2018 IKV AGENDA TIMELINE AUGUST-SEPTEMBER 2018 “MEETING OF THE REFORM ACTION 1 2 32 GROUP IS PROMISING FOR THE EU 4 IKV Chairman Ayhan 53 Zeytinoğlu issued a statement PROCESS” 6 on the US decision to re- impose sanctions on Iran. led to a rapprochement with the EU. Lastly, Chairman Zeytinoğlu 74 In particular, the cracks in Transatlantic referred to some events that could 8 Alliance under the influence of Trump’s be important for the revival of the EU Treasury and Finance Minister Berat 9 approach have impelled the EU to seek process in the forthcoming days: “Our Albayrak unveiled Turkey’s new 5 common alliance with the countries Foreign Minister will attend the Informal economic model. 10 IKV Chairman Ayhan around its borders. We see the effects Meeting of EU Ministers of Foreign 116 Zeytinoğlu commented on the of this process in French President Affairs in Austria. Federal Minister for 12 messages of support coming from EU member states in the Macron’s speech in which he proposes Foreign Affairs of Germany will visit 13 partnership with Turkey and Russia. Turkey. Our President will visit Germany 7 face of US sanctions. However, as Turkey, we have to be on at the end of September. It is also said 14 alert when the proposal of strategic that the Federal Minister of Economy 158 The updated second edition partnership instead of full membership of Germany will be visiting Turkey, with 16 of the IKV report entitled comes up. We have to demonstrate a delegation of business people. As a 17 “Brexit and beyond: Future of that for Turkey, the objective of full result, there are going to be intensive 9 EU Integration and Turkey” (in he Reform Action Group (RAG), membership continues not in word but contacts with Germany, which has 18 Turkish) was published. which carries significance in terms T in action. In this respect, the gathering a great significance when it comes 1910 of Turkey’s alignment with the EU, of RAG is an important indication.” to opening up the doors of the EU. 20 convened on 29 August 2018 with the IKV Chairman Zeytinoğlu also Germany is especially closely associated participation of Ministers of Foreign addressed the expectations regarding with investments and the business 2111 Affairs, Justice, Treasury and Finance RAG meeting: “RAG’s agenda includes environment in Turkey. Germany 22 and the Interior following a three-year the fundamental rights and judiciary has been leading those opposing 23 break. In a press release, IKV Chairman within the scope of Chapters 23 and the modernisation of the Customs 12 Turkey’s Treasury and Finance 24 Ayhan Zeytinoğlu assessed the RAG 24 and political criteria, which are Union. Therefore, a rapprochement Minister Albayrak met with the meeting which is seen as an important particularly significant during the EU with Germany could accelerate the 2513 French Finance Minister Le Maire step for the revitalisation of Turkey’s EU accession process. The best step to modernisation of the Customs Union as 26 process: take in order to overturn the view well. Moreover, with the Syria Summit in Paris. 27 IKV Chairman issued a press “The meeting of the RAG, which Foreign Minister Çavuşoğlu visited 14 release assessing the RAG which has been mentioned in recent which is set to be held in September, 28 brings related ministries together as a EU documents as “Turkey is getting and subsequently the Geneva talks Lithuania. meeting as an important th step for the revitalisation of platform overseeing Turkey’s alignment further from the EU”, would be to regarding the Syrian constitution, 4 Reform Action Group Meeting 29 15 Turkey’s EU process. with the EU particularly on the political realise this agenda. The revitalisation the future of Syria is coming to the Foreign Minister Çavuşoğlu 30 criteria, after a three-year break is a very of the EU process would lead to the fore. We also expect opportunities for attended the Gymnich meeting. 31 welcome development. I welcome it development and relaxation in the collaboration and joint work to arise 16 as a concrete indication that the EU political sphere; it would enable between Turkey and the EU. If we can 1 has entered the government’s agenda the launch of the modernisation harmonise common values on the basis 172 once again. Recently, especially in of Customs Union and would be of common interests, this could help Treasury and Finance Minister Albayrak visited the UK. the face of US sanctions on Turkey, instrumental in the development of a Turkey to solve these issues, enhance its 3 the support of the EU countries, business climate favourable for foreign standard of living and to get out of the 184 German Foreign Minister Maas particularly Germany and France, has investments and the business world.” middle-income trap.” visited Turkey. 5 196 Presidents of Turkey, Iran and Russia met in Tehran to discuss 7 IKV PRESS RELEASE CONCERNING THE the future of Syria. 208 Trilateral Meeting of Foreign 9 The IKV delegation came together with ICOC Secretary Ministers of Turkey-Romania- 1021 LATEST DEVELOPMENTS IN GLOBAL TRADE Poland General Assoc. Prof. Nihat 11 Alayoğlu. compensation. In this regard, Chairman Zeytinoğlu pointed Commission President Juncker’s 1222 An IKV delegation visited out to the overlap between Turkey and EU’s approach and State of the Union address 13 interests regarding Iran. TUSIAD Secretary General Dr. Bahadır Kaleağası. IKV Chairman Zeytinoğlu recalled that the trade 1423

wars triggered by Trump had put pressure on the EU 15 Head of the EU Delegation to and China urging them to take countermeasures which Central European leaders gathered in Bucharest for the 3rd Three Seas 1624 Turkey Ambassador Berger in turn have led to a rapprochement between them. Initiative Summit. 17 visited IKV. Chairman Zeytinoğlu welcomed the two parties’ liberal rd order promoting approach in terms of the restoration Opening of the 73 session of the 1825

of the global architecture and the re-functionalisation UN General Assembly 19 of international organisations. But at the same time, as EU leaders met in Salzburg for 2026 KV Chairman Ayhan Zeytinoğlu, in a press release ensuring the continuation of the international liberal order an informal summit to discuss 21 Ifollowing the Trump-Juncker meeting on 25 July 2018, without the US would be difficult; he stressed that all parties internal security, migration and stated that the reconciliation reached on the removal of should cooperate to draw the US within the system again. Brexit. 2227 tariffs, non-tariff barriers and subsidies for non-automotive Lastly, Chairman Zeytinoğlu pointed to the temporary 23 industrial products and reducing bureaucratic obstacles and protection measures on the EU’s importation of steel 2428 IKV EU Information Centre’s screening of the initiating dialogue on standards was pleasing, however this products by stating that the EU is resorting to temporary 25 may provide temporary relief as there is still the possibility protection measures in order to prevent the steel products Issue 25 •movie December “Buğday” (Grain) 2016 on 3 that tariffs for the automotive sector could be increased. heading for the EU market which might eventually lead 2629 the occasion of EU Climate IKV Chairman Zeytinoğlu also emphasised that the EU to implement 25 percent tariff in case countries 27 Action Week serious differences of opinion namely on Iran sanctions still including Turkey exceed the determined threshold import. President Erdoğan’s state visit to 2830 persisted between the two sides. The EU had adopted a Therefore it would create a situation which would obstruct Germany blockade law against the US’ decision to impose sanctions Turkey’s steel exports from increasing, as steel imports are 29 on Iran which gives companies affected by Iran sanctions not a part of the Customs Union. 30 31

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IKV AGENDA “THE SANCTIONS IMPOSED ON IRAN WILL STRAIN THE TURKISH BUSINESS COMMUNITY” KV Chairman Ayhan Zeytinoğlu suppliers.” decisions to move the US embassy Iissued a statement on 7 August 2018 Pointing out to Turkey’s to Jerusalem and to withdraw from following the re-imposition of US sensitivities, IKV Chairman Zeytinoğlu the nuclear deal have deepened the sanctions on Iran. Zeytinoğlu stated that added: “We are anxious regarding rift between the US and Europe. IKV the sanctions that have begun to be re- the damage which the sanctions on Chairman indicated that it is positive applied to Iran were critical for Turkey. Iran will cause on Turkish economy. that a consensus has been reached IKV Chairman Zeytinoğlu, emphasising Even in the past, it was Turkey which during US President Trump’s meeting that Iran is the main transit country in was damaged the most by the similar with European Commission President Turkey’s trade with Central Asia and its sanctions on Iraq and Iran. We don’t Jean-Claude Juncker regarding the transportation to the Gulf countries, want to encounter a similar situation. trade of non-auto industrial goods; drew attention to the importance of The relevant institutions should carry however he underlined that this does economic and commercial relations out the necessary work in order to not mean that all problems were with Iran. prevent our country from being resolved. IKV Chairman Zeytinoğlu stated: damaged by possible sanctions.” Zeytinoğlu also pointed out that “It is a pity for us to be talking about IKV Chairman Ayhan Zeytinoğlu trade agreements between the EU the US sanctions on Iran in a very short also commented on the joint statement countries such as France, Germany, time after the removal of the sanctions. made by the EU, France, the UK and Italy and Spain along with private Iran is an important neighbour in terms Germany on 6 August 2018 regarding companies with Iran are worth around of both economic and commercial the US sanctions on Iran, that they are 600 billion dollars. Zeytinoğlu stated: are not temporary but are based on international community, especially relations and energy imports. Iran is committed to protecting European “The relations international powers multi-faceted interests. In this regard, from the EU. Contrary to assumptions, one of Turkey’s most important regional companies which do business with Iran. and global companies have built it is difficult for Trump’s Iran policy to global capital would not profit in this trade partners and major energy According to Zeytinoğlu, Trump’s with Iran following the nuclear deal receive the expected support from the orientation.” “CUSTOMS UNION IS IMPORTANT IN THE NORMALISATION PROCESS WITH THE EU”

KV Chairman Ayhan Zeytinoğlu made a statement process and strengthening of the legal system, finally recognising products originating from San Marino Iconcerning the central role of the Customs Union in the revitalisation of the accession process. and Andorra as EU products, IKV Chairman the normalisation of Turkey-EU relations. After having In reference to the global developments in trade Zeytionoğlu underscored that a similar arrangement reminded that talks for the modernisation of Turkey- and the EU’s trade policy, Zeytinoğlu emphasised should also be made available to Turkey in EU’s future EU Customs Union could not start due to political that in spite of the protectionist moves led by the US FTAs. reasons, IKV Chairman Ayhan Zeytinoğlu emphasised President Donald Trump the EU aimed to increase Chairman Zeytinoğlu also expressed that that with the end of the state of emergency and its share in world trade, especially through FTAs. IKV safeguard measures should not be the subject of a the transformation to the new system as well as the Chairman also underlined the need for countries such well-functioning and equitable Customs Union and improvement in the relations with the EU Member as Turkey, which have a Customs Union with the EU, stated that both the EU and Turkey should leave States, a new era started for the normalisation in to accommodate these FTAs. the mutual application of these practices which is Turkey-EU relations. Chairman Zeytinoğlu expressed Referring to the special provisions annexed essential for the healthy functioning of the Customs his expectations for the acceleration of the reform to the EU-Japan Economic Partnership Agreement Union. IKV VISITED TUSIAD AND “EU SUPPORT IN THE FACE OF US ICOC SECRETARIES GENERAL SANCTIONS HOLDS SIGNIFICANCE”

n 13 August 2018, IKV Chairman Ayhan Zeytinoğlu Minister of Germany for Economic Affairs and Energy Ocommented on the messages of support coming from Peter Altmaier emphasised that Trump’s trade sanctions EU member states such as Italy and Germany following would put consumers at disadvantage first and foremost US President Trump’s decision doubling tariffs on steel and by undermining economic growth. The calls, which come aluminium: from the EU and invite the US to behave more rationally, he IKV delegation consisting of with Secretary General Assoc. “Following US President Trump’s decision for customs point to the negative consequences of trade wars. Turkey Secretary General Assoc. Prof. Prof. Nihat Alayoğlu of ICOC and T duties to be applied on steel and aluminium on Friday, two and the EU are also on the same page when it comes to Çiğdem Nas, Research Director Secretary General Dr. Bahadır EU countries made statements which can be interpreted sanctions which will be imposed on Iran. Turkey acting Çisel İleri and Strategy and Business Kaleağası of TUSIAD. During the as support for Turkey. While criticising the decision together with the EU on the continuation of liberal Development Director Gökhan meetings, current developments that could endanger Turkey’s economy further, Italian economic order is of utmost importance. These messages Kilit visited the Istanbul Chamber in Turkey-EU relations and Foreign Minister Enzo Moavero noted that Turkey’s drift of support from the EU in the face of recent sanctions of Commerce (ICOC) and TUSIAD opportunities for strengthening the into a crisis would have negative consequences for the by the US are also promising for embarking on a new on 10 and 12 September 2018 links and cooperation between the balance of the Mediterranean. On the other hand, Federal normalisation process with the EU.” respectively. The delegation met two institutions were discussed.

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TURKEY-EU WATCH PRESIDENT ERDOĞAN UNVEILED THE 100-DAY ACTION PLAN President Recep Tayyip Erdoğan disclosed on 3 August 2018 the first1 00-day action plan of Turkey’s new presidential cabinet.

he action plan includes 400 additional income will be generated; -The land allocation for the be established in Istanbul’s Tuzla district, Tprojects in diverse sectors to be -Istanbul’s new airport will be petrochemical plant with 1 billion Kocaeli, Kırklareli and Iğdır provinces to accomplished in the first1 00 days operational on 29 October 2018; dollars investment in Adana Yumurtalık combat irregular migration. of the presidential government. The -Environmental impact assessment will be done; -New markets will be targeted action plan covers goals in various of Canal Istanbul will be completed; - Istanbul International Finance in tourism sector, an action plan to sectors such as foreign policy, defence, -The Great Istanbul Tunnel will be Centre Project will be launched; increase China’s share in the country’s economy, transportation, tourism, tendered for construction based on -Chinese, Mexican and Russian tourism market will be formed. education, finance, agriculture as well as build-operate-transfer model; markets will be prioritised; -In order to make Turkey a environment. -35 new countries and cities will be -New generation special free global brand in health, tourism, President Erdoğan, in his speech defined for rising foreign trade volume; zones will be built mainly in software, and international health services, a for the presentation of the action plan, -The execution, plan, project follow information technologies, health, corporation will be established and stressed the importance of developing up system will be established in the education and film sectors; number of health tourism companies a domestic industry pointing out that Presidency Complex; -Mosul and Basra head consulates will be increased. 48 out of 400 projects in the action plan -The first unit of Akkuyu nuclear will be re-activated; -Turkish Space Agency will be are related to the defence industry. power plant will be in 2023 and work for - A Turkish deputy commander will established and works will be launched Under the action plan the main Sinop nuclear plant will continue; be assigned at NATO’s Iraq mission; for indigenous 5G technology. goals are summarised as follows: - The list of a total of 3,000 -Domestically produced Turkish -Projects for indigenous satellites -Nearly 40 billion Turkish liras public megawatts of solar power plants with training plane HURKUS (Free Bird) will be will be developed and a Space finance will be managed under one a total investment of about 4.8 billion listed under the Air Forces Command. Technologies Optic system research account; around 4 billion Turkish liras dollars will be disclosed; -Four new repatriation centres will centre will be opened.

TURKISH GOVERNMENT ANNOUNCED THE NEW ECONOMIC PROGRAM Treasury and Finance Minister Berat Albayrak announced on 20 September 2018 the Turkish government’s New Economic Program covering goals and guidelines for the period 2019-2021.

and 2020. Turkish economy is predicted to grow this year and 1.8 percent in 2019, 1.9 percent in 3.8 percent in 2018, 2.3 percent in 2019, and 3.5 2020 and 1.7 percent in 2021. According to the percent in 2020. With the goal of balancing the NEP, current account deficit is expected to be 4.7 economy a gradual growth increase is foreseen percent this year, 3.3 percent in 2019, 2.7 percent and the Turkish economy expected to grow 5 in 2020 and 2.6 percent in 2021. percent annually from 2021 onwards. According The second pillar of the program is fiscal to NEP, annual inflation rate is expected to discipline. Rebalancing process of the economy continue to rise to 20.8 percent by the end of is envisaged through fiscal discipline and tighter 2018, before moderating only slightly to 15.9 budget discipline. The third pillar of the NEP will percent in 2019. For 2020 and 2021, the forecasts be the change in the economy via strengthening are more optimistic, with 9.8 percent in 2020 value-added production, increase in production and 6.0 percent in 2021. The unemployment capacity and exports in the long term. Finance he New Economic Program lays out was strengthened. The main aim is sustainable rate is predicted as 11.3 percent in 2018, 12.1 Transformation and Change Office in the Tmacroeconomic predictions and emphasises and healthy economic growth through strategies percent in 2019, 11.9 percent in 2020 and 10.8 Treasury and Finance Ministry was established. commitment to fiscal discipline to increase trust and measures pointed out in the program. The percent in 2021. Turkey will generate 2 million This office comprising of members from in the Turkish economy across global markets. new program is based on three pillars namely; new jobs by the end of the program period, with other ministries will not only execute austerity The name of the three-year program originally balancing, discipline and change. an unemployment rate target of 10.8 percent in measures and determine new ones, but also be known as “Medium-Term Program” was renewed As part of the rebalancing scheme, a 2021. The government predicts that the ratio of responsible for finding new revenue boosting as “New Economic Program” (NEP), as its content stabilisation process is expected for next year the budget deficit to the GDP will be1 .9 percent measures.

FOREIGN MINISTER ÇAVUŞOĞLU ATTENDED THE GYMNICH MEETING IN VIENNA

n 30-31 August 2018, Foreign Minister Mevlüt peace and prosperity, and stated that Turkey OÇavuşoğlu participated in the informal makes Europe and multilateralism stronger. On meeting of the EU Foreign Ministers in Vienna. The the sidelines of the meeting, Foreign Minister informal meetings also known as the “Gymnich Çavuşoğlu met with Dutch Foreign Minister Stef meetings”, which take place every six months, Blok and Irish Foreign and Trade Minister Simon provide an opportunity for EU foreign ministers Coveney. Following his meeting with his Dutch to discuss key foreign policy issues in an informal counterpart, Çavuşoğlu announced that the setting. The Gymnich meeting, which was hosted re-appointment of ambassadors between Turkey by Austria, the current holder of the EU’s rotating and the Netherlands will take place as soon as presidency, was also attended by the foreign possible in line with the decision to normalise ministers of other candidate states. bilateral relations between the two countries On 30 August, Foreign Minister Çavuşoğlu which were strained shortly before the Dutch attended the reception hosted by the Austrian Foreign Minister Çavuşoğlu together – the Union’s fundamental strategy document for general elections in March 2017. At the meeting President, while on 31 August views on global with his counterparts from other candidate its Common Foreign and Security Policy. During between Foreign Minister Çavuşoğlu and his Irish and regional developments were exchanged states participated in the session on “Effective the session, Foreign Minister Çavuşoğlu expressed counterpart, the two ministers agreed to improve during the Gymnich meeting bringing together Multilateralism”, the strengthening of which is the need to strengthen the vision of a united bilateral economic and trade relations and EU member states and candidate countries. among the key priorities of the EU Global Strategy Europe that is the champion of multilateralism, increase high-level visits.

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TURKEY-EU WATCH RELEASE OF TWO GREEK SOLDIERS MARK A NEW PERIOD IN TURKISH-GREEK RELATIONS

elations between two immediate President Recep Tayyip Erdoğan and Rneighbours Turkey and Greece Greek Prime Minister Alexis Tsipras agreed had been really tense since the to focus on mutual efforts to reduce beginning of the year because of tensions in the Aegean during NATO mainly two controversial issues the summit that took place on 11-12 July governments confronted vis-à-vis 2018 in Brussels. their individual political interests. The Turkish court decided, in the first case bringing the countries one aftermath of the judicial process on against the other was about eight Turkish suspicions of illegal entry and attempted ex-servicemen wanted by Ankara for military espionage, to release the soldiers their alleged role in the 15 July coup from custody on 14 August and the pair attempt who have requested asylum landed in Thessaloniki the next day. Greek in Greece. Meanwhile, the discussions Defence Minister Panos Kammenos were continuing to keep in custody two argued that the release of soldiers would Greek soldiers, for allegedly entering mark a new chapter for Greek-Turkish the Turkish military zone in the western relations. Furthermore, Greek PM Tsipras Turkish province of Edirne’s Pazarkule describing the decision of the Turkish district on 2 March 2018, caused tension court as an “act of justice” expressed not only between Turkey and Greece but his wish to reinforce friendship, good also in Turkey-EU relations. But in order neighbourliness and stability in the to moderate the strained ties, Turkish region.

MACRON’S COMMENTS ON TURKEY CAUSED CONTROVERSY

peaking at a joint press granting Turkey EU membership the arguments of Macron persistently Sconference in Helsinki in the parties should develop a strategic questioning Turkey’s EU membership aftermath of an official meeting partnership. Macron’s statements and defining Turkey-EU relations with his Finnish counterpart Sauli came weeks after Trump’s spurt solely within converging interests Niinistö on 30 August 2018, French at NATO Summit held in mid-July, particularly based on trade and President Emmanuel Macron stressed accusing Germany of being “totally security domains. Hami Aksoy, the once again the EU’s need to develop controlled by Russia” and threatening spokesperson of the Turkish Foreign better relationships with Turkey and NATO allies to withdraw US’ Ministry, responded to Macron stating Russia. Macron travelled to Helsinki, contribution from the alliance budget. that the French President was far from with the aim of discussing the The French President underlined understanding the realities of Turkish military partnership with Finland and the importance of a stable region policy. Reminding that Turkey has expressed his views about how to within Union’s eastern borders, in been through a challenging period decrease the EU’s military reliance on economic and political meaning, in the aftermath of the 15 July coup the United States. Ahead of his official insisting that the EU should pursue attempt, Aksoy stressed Turkey’s visit to Finland, French President said a “strategic partnership” with Turkey determination to increase alignment during the Ambassadors Conference and Russia for its own defence. with the EU acquis as a priority of the in Paris on 27 August that, instead of Turkish authorities reacted to the new executive presidential system.

TURKISH AND GREEK FOREIGN MINISTERS INAUGURATED THE GREEK CONSULATE IN IZMIR

oreign Minister Mevlüt that the two countries had some FÇavuşoğlu and his Greek difference of opinions, Foreign counterpart Nikos Kotzias, who Minister Çavuşoğlu stated was on an official visit to Turkey, that Ankara sees dialogue and inaugurated the renovated cooperation as building blocks in building of the Consulate General its relations with Athens. Foreign of Greece in Izmir on 4 September Minister Çavuşoğlu expressed the 2018. The consulate was closed in need to accelerate work to launch 2003 for restoration works; however a ferry line between Izmir and the process faced delays due to the Thessaloniki. Greek Foreign Minister Greek economic crisis in the last Kotzias for his part voiced support decade. The two foreign ministers for Turkey’s EU membership and also discussed bilateral issues. stated that he hoped the visa Speaking at the inauguration requirement for Turkish citizens ceremony, while acknowledging would be lifted soon.

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HIGH-LEVEL EXCHANGES

TURKISH PRESIDENT ERDOĞAN VISITED IRAN FOR SYRIA SUMMIT

n 7 September 2018, the conflict and restoring and any major escalation in OPresident Recep Tayyip security and stability to Syria. Syria could result in a new Erdoğan visited Tehran on The previous meetings in the wave of refugees fleeing to the occasion of Turkey-Iran- Russian resort city of Sochi Turkey. A final statement was Russian Federation trilateral and the Turkish capital, Ankara released following a joint press summit on Syria. President established de-escalation zones conference by the presidents Erdoğan was accompanied in several areas, including Idlib. of the Islamic Republic of by Turkish Foreign Minister The summit’s focus was Iran, the Russian Federation Mevlüt Cavuşoğlu, National on defining the limits and and the Republic of Turkey, Defence Minister , scope of the looming military reaffirming determination to Treasury and Finance Minister operation of the Syrian Armed continue cooperation until Berat Albayrak as well as chief Forces for the recapture of the the full eradication of terrorist of the National Intelligence Idlib region, currently in the groups in Syria. The statement Organisation (MIT) Hakan hands of the al-Qaeda allies the also emphasised the strong Fidan. The tripartite summit Nusra Front, as well as ensuring and continued commitment of of the heads of state of Iran, that Turkish interests are the parties to the sovereignty, Russia and Turkey, is the third safeguarded. Ankara’s concern independence, unity and of its kind to be held within over the current situation in territorial integrity of Syria. the framework of the Astana Idlib is mostly related to the fact The next round of Syria talks process which was launched in that Turkey is now hosting more between the three countries’ January 2017 aimed at ending than 3 million Syrian refugees leaders will be held in Russia.

FOREIGN MINISTER MEVLÜT ÇAVUŞOĞLU PAID A VISIT TO LITHUANIA

oreign Minister Mevlüt Çavuşoğlu Minister Çavuşoğlu and Lithuanian the “Turkey-Lithuania Agreement on Fpaid an official visit to Lithuania on Minister of Foreign Affairs Linas Reciprocal Promotion and Protection 28 August 2018. Minister Çavuşoğlu Linkevičius, both parties confirmed their of Investments” was also announced firstly conveyed President Erdoğan’s commitment to deepen bilateral relations during the press conference, along with best wishes and congratulations on between the two countries. Çavuşoğlu Lithuania’s calls for investments from the occasion of the Centennial of the also underlined that Turkey’s ties with Turkey. Restoration of the State of Lithuania, Russia should not be considered as an Lastly, Çavuşoğlu met with at his meeting with President Dalia alternative to its relations with Lithuania, Deputy Speaker Gediminas Kirkilas of Grybauskaitė. President Grybauskaitė, on the EU or the US, whereas his counterpart the Lithuanian Parliament and held a the other hand, remarked that as much as Linkevičius underscored Turkey’s meeting with Prime Minister Saulius on 16 April 2018. In NATO allies’ solidarity YPG, FETÖ and ISIL and Turkey needs Europe, Europe also needs importance as a NATO member and a Skvernelis of Lithuania, in which views the context of the in the fight against all expressed that decisions Turkey for reasons such as trade, security, key ally. He also conveyed his wish for on Turkey-Lithuania economic relations, visit, Stoltenberg kinds of terrorism was regarding enlargement migration. direct communication in an atmosphere fight against terrorism, and cooperation came together with emphasised. policy should be taken. During the meeting between based on mutual trust. The signing of in NATO were exchanged. President Recep Tayyip Following the Lastly, Stoltenberg Erdoğan, Minister of meeting with President met with Minister Foreign Affairs Mevlüt Erdoğan, Stoltenberg of National Defence GERMAN FOREIGN AFFAIRS Çavuşoğlu and Minister came together with . During TURKISH FINANCEof National Defence AND Minister TRADE of Foreign MINISTERSthe meeting, Minister MINISTER MAAS VISITED TURKEY Nurettin Canikli. Affairs Mevlüt Canikli and NATO VISITED KEY EUDuring CAPITALSthe visit, Çavuşoğlu. Minister Secretary General Jens NATO Secretary Çavuşoğlu and Secretary Stoltenberg discussed urkish Treasury and Finance General Stoltenberg General Stoltenberg the cooperation in the TMinister Berat Albayrak held contacts in various EU capitals in late August and September. On 27 August 2018, Minister Albayrak visited Paris and met with his French counterpart Bruno Le Maire. Following their meeting, that took place amid market volatilities in Turkey and the tensions in the transatlantic partnership, the two ministers declared their intention world’s largest financial institutions. Albayrak visited Berlin with a to act together at the WTO against Minister Albayrak’s visit was delegation of ministers and met US tariffs. The ministers stressed the followed by a visit by Trade Minister with German Vice-Chancellor and importance of Turkey-EU relations . On 11 September, Finance Minister Olaf Scholz and and expressed their will to boost erman Foreign Affairs Minister Minister Çavuşoğlu, the German Minister Pekcan delivered a Economy and Energy Minister bilateral trade from 14 billion euros speech in the first Turkey-UK Joint Peter Altmaier. In the joint press GHeiko Maas paid his first visit to Foreign Minister was received by to 20 billion euros. Economic and Trade Commission conference following the meeting, Turkey on 5-6 September 2018. The President Erdoğan. Minister Çavuşoğlu On 3 September, Minister (JETCO) meeting after the Brexit German Finance Minister Scholz visit was important in terms of the and German Foreign Minister Maas held Berat Albayrak visited the UK decision. Minister Pekcan also stated that it was in Germany to meet with Chancellor of the restoration of the relations between a joint press conference. Events in Idlib met with the UK Minister of and Turkey’s common interest Exchequer Philip Hammond and Turkey and Germany as well as planning region marked Maas’ meetings with State for Trade Policy George to see Turkey continue its stable Minister of State Alan Duncan. The the forthcoming visit of President Turkish President Tayyip Erdoğan and Hollingbery and signed the JETCO economic development. For his minister announced the eagerness Erdoğan at the end of this month. Foreign Minister Mevlüt Çavuşoğlu. Memorandum of Understanding part, German Economy Minister of the two sides toward the with the Secretary of State for Altmaier underscored the close The Minister of Foreign Affairs Mevlüt On September 6, Minister further development of bilateral International Trade Liam Fox. Lastly, economic cooperation between Çavuşoğlu welcomed his counterpart Çavuşoğlu and Minister Maas visited cooperation after Brexit. Minister Minister Pekcan inaugurated the Turkey and Germany and said that Maas and they together visited Turkish the German School of Istanbul on the Albayrak also held meetings with Turkish Trade Center in London. they agreed to take steps to further th senior representatives of the Grand National Assembly (TGNA). occasion of the 150 anniversary of its On 21 September, Minister enhance their economic relations. Following his meeting with Foreign foundation.

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EXPERT VIEW US SANCTIONS SIGNAL RAPPROCHEMENT IN TURKEY-EU RELATIONS Although the latest US sanctions on Turkey have adversely affected the Turkish economy, they have also presented an opportunity for a rapprochement between Turkey and the EU.

Merve ÖZCAN, created an atmosphere that holds diplomacy for its problems with Turkey. IKV Junior Researcher promise for a rapprochement in Turkey- All of these positive messages from the EU relations. On 12 August, two days EU at a time of strained relations have after Trump’s decision to double tariffs, given hope for the future of Turkey-EU he fear of trade wars in the in an interview with Bild am Sonntag ties and the launch of the negotiations global economy has been newspaper Germany’s Economy for the modernisation of the Customs Tspreading due to US President and Energy Minister Peter Altmaier Union. Donald Trump’s protectionist decisions issued a support message for Turkey. What is more, in the near future which have been in return followed by After having criticised Washington’s there are some significant gatherings condemnations and counter-measures protectionist and pro-tariff perspective set to take place between key Turkish by other countries and international towards China and Turkey, Altmaier officials and their EU counterparts. The organisations. One of the most warned that higher prices resulting first of such meetings has taken place controversial economic sanctions of from tariffs hit consumers the most in early September when Minister for US President against the rules-based and threaten employment and global Foreign Affairs of Germany Heiko Mass international trade was tariffs on economic growth. Likewise, Turkey’s paid his first official visit to Turkey. The imported steel by 25 percent and on importance as a NATO ally, Germany’s visit that was described by Mass as “the imported aluminium by 10 percent willingness to rejuvenate economic start of the normalisation in Turkey-EU imposed in March. Turkey has also relations with Turkey and Turkey’s key relations” carried great importance. had its share of Trump’s controversial role for EU’s security were also between Moreover, Treasury and Finance Minister policies and bilateral relations between the lines of Altmaier’s interview. Berat Albayrak will come together with the two countries have been passing Similarly, German Chancellor his German counterpart Olaf Scholz through a tough period. Amid the Angela Merkel expressed the willingness on 21 September. Furthermore, at the deteriorating relations with the US, one of her country to see an economically end of the month President Recep of the most favourable developments prosperous Turkey. Moreover, Treasury Tayyip Erdoğan will go to Germany for a Turkey has experienced in this period and Finance Minister of the first cabinet two-day visit. Lastly, Minister Altmaier is has been the increasing support given Pence and President Donald Trump 16 percent. Following Trump’s decision, of the executive presidency, Berat scheduled to visit Turkey with a business by the EU which shares a similar fate in threatened Turkey by mentioning President Recep Tayyip Erdoğan called Albayrak, had a phone conversation delegation at the end of October. the face of rising protectionism. that unless Pastor Brunson is released for boycotting American electronic with his German counterpart Olaf Although all of these steps from and allowed to go back to the US, products such as cell phones and Scholz on 16 August. It was announced especially Germany can be considered The Brunson Affair and the State of Turkey should bear its consequences. using national ones instead. Then, on by the ministry that during the as the search for normalisation in Play in Turkey-US Relations Afterwards sanctions on Turkey’s 15 August the decision to double the conversation, in which the US sanctions relations, the EU’s expectations To recall the recent developments ministers of justice and interior to tariffs that had been imposed in June and their effects on Turkish economy from Turkey to take concrete steps in Turkey-US relations, Ankara had block having properties and making on some American goods such as cars, were discussed, taking steps towards compatible with the full membership entered into intense negotiations with transactions in the US were announced alcoholic drinks, tobacco, rice, cosmetic strengthening economic cooperation objective should not be overlooked. Washington in April and May to get on 1 August. Later on 10 August, US products and coal was announced by and starting reciprocal works for this Being the Union’s fourth partner in exemptions from the tariffs on steel President announced on that Turkey. purpose have been decided. In addition exports and sixth partner in imports and aluminium imports but the efforts tariffs on steel and aluminium imports to Germany, another EU founding in the first half of 2018, Turkey plays a remained inconclusive. Afterwards, from Turkey were doubled because of EU’s Support to Turkey in the Face member, Italy, was among the countries crucial role for EU’s economy. Therefore, a list of 22 American goods for the the depreciation of against of the US Sanctions that put support behind Turkey. During the US sanctions on Turkey and the imposition of equalised tariffs was the US dollar. Announcing that relations The strained Turkey-US links and his interview with Il Foglio newspaper, current state of Turkish economy submitted to the WTO on 21 May and with Turkey were not good, Trump rising economic sanctions have been Italian Foreign Minister Enzo Moavero have caught the EU’s attention since these tariffs entered into force on 12 escalated the ongoing dispute with instrumental in bringing Turkey and Milanesi underlined Turkey’s significance the Union does not want economic June 2018. In this context, retaliatory Ankara. the EU together. As known, Turkey-EU for the commercial balances in the destabilisation of such an important tariffs on alcoholic drinks by 70 percent, As regards the reflections of the relations have been going through a Mediterranean and thereby called partner. Although understanding the on cars by 60 percent and on tobacco Turkey-US spat on the Turkish economy, rough period with Turkey’s accession Europeans for solidarity with such an value of each other better and making by 30 percent have been levied. the downward trend of the lira, talks having ground to a halt. This important economic partner. efforts to normalise the relations are Since the end of July, Turkey-US increasing inflation, rising foreign debt, assessment was explicitly mentioned in Furthermore, the EP Turkey Forum meaningful for Turkey-EU relations, it is relations have witnessed another declining purchasing power, raising the General Affairs Council conclusions backed up Turkey in the aftermath of clear that the outcome of General Affairs dispute due to the “Branson affair” risk perception and uncertainty has of 26 June 2018 and the talks aimed US President’s statement to double Council regarding the modernisation of namely the US calls for the release of received greater attention. According at the modernisation of Turkey-EU the tariffs. As known with its severe the Customs Union will be considered evangelical Pastor Andrew Brunson to the Central Bank of the Republic Customs Union, which had been criticisms towards Turkey, the Forum invalid by a similar written decision. In who had been indicted on charges of of Turkey, the lira has lost almost 74 anticipated to start in the near future, stated that Trump’s decision is illegal a broad sense, EU circles will be likely having links with terrorist organisations percent of its value against the dollar were put on the shelf. and not compatible with the WTO to lean towards rapprochement with and has been moved to house arrest since the beginning of 2018. On the day Against this background, rules. In addition, the Forum called for Turkey in case of the willingness to following a court decision. On 26 of the US President’s decision to double economic sanctions imposed by the the Washington administration to find proceed in accordance with the EU July, Vice-President of the US Mike tariffs, the lira further declined by almost Trump administration on Turkey have a compromise based on constructive values is demonstrated.

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