Breakingviews: Money and politics - Turkey's vicious circle
Tuesday, January 07, 2014 - 03:10
Jan. 7 - Turkey has lost its equilibrium. Inflation of 7.8 percent and political turmoil have international investors running scared. A strong government needs to step in, says Breakingviews.
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Well today's breaking -- Turkey its course in a vicious circle of political turmoil and financial Harold. And needs a strong government to restore old passes it without us Reuters Britain's economic sense Edward I am. How quick to me is the economy. Which is trading Foster him about the commitment and housing unit take. What we are narrow very could come reasonably quickly one of the one of the professors who had mentioned this piece. -- Turkey is leading candidate what they call on economics a sudden stop IE money stops coming and companies are failing banks start collapsing. And that's right it's got very high current account deficit 7% of GDP. In the fiscal deficit isn't a problem but it -- a lot of the debt is denominated in dollars and so this thing could collapse quite quick and international investors of course finance -- -- that deficit exactly how they're running him out there running away about a third of them left already. And they could leave -- -- accelerated pace. And that community. Cause a lot of squeeze in the cash -- of -- for Turkish companies and households. Especially as the currency falls that means the dollar to nominated it becomes much expensive set aside what's gonna. Will let me read to your mutual to economists. No one is optimistic which perhaps it's -- we should be contrary to that that. The problem here is you've got a very severe political god crisis. There is news strong force that -- strong force there had been in the AK party's seems deeply divided. On the tolerance of this religious movement and ugly beasts are. In we've got open rebellion. The political that it can be corruption scandals seems to be just a reflection of this this this fight. And you know you mentioned to beginning a strong government Turkey's strong governments have always been military it the military has been pretty much. Emasculated in the last few years by the AK party -- it's unlikely they could actually take over even if they -- -- they did they've been more corrupt than anyone's. I think we have a real problem here. You you mentioned the Turkish an era when I wanna finish up with this down 18% against the Dalai -- Even -- the bank essentially what he's fine and it. I want to mention that because his good what are what -- -- get ethics people like speak to has said to me at the end -- lost you know may be that trade and it's a bit far out that maybe. When the FX trains at the beginning of this year has got long. Turkish -- Because this is not a country that can left side. That not sure who they are that's gonna keep it from failing. Accurate -- managed it it almost all of its neighbors. And it's would be allies in the EU I suspect it's a country that day we'll let fail because they don't have much alternative. To see that with many things about you can read it puts these -- on the breaking news website. For more our agenda setting inside what's our US breaking news show everyday at 1230 east in 1730 GMT. I'm -- problem sources.
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