Bloomberg Lightning Analysis: There is no single solution
While the cabinet is expected to be announced by President Erdoğan on Saturday, one of the most curious names in the cabinet remains the Minister of Treasury and Finance.
While markets are following the person who will become the Treasury and Finance Minister, Bloomberg wrote that Erdogan will appoint Mehmet Şimşek, who advocates orthodox policies in the economy, as the new Treasury and Finance Minister, to support confidence. of the market, in the news cited by Bloomberg today, based on sources with direct knowledge of the subject.
However, in the article published yesterday under the byline of Bobby Ghosh, it was stated that Şimşek becoming a minister again would not mean real change on its own.
“THE VICTORY OF HOPE OVER EXPERIENCE”
In the article, which claimed that the country’s economy bled dry due to Erdogan’s abuses for years and that its chance of recovery was lost with his re-election, Şimşek’s inclusion in the cabinet to be announced tomorrow was described as a “victory of hope over experience. “.
Claiming that Erdogan’s promise to “name a team with an international reputation” announced during his balcony speech should not matter much, the article included the following statements:
“The investor should not make the same mistake. Nor should they pay too much attention to the president’s dubious promise to “appoint an internationally renowned team” to manage the country’s finances.
Until Erdogan openly renounces his ludicrous economic ideas that put Turkey on a par with Venezuela and Argentina as a darling of emerging market investors, any appointments he makes should be seen as window dressing.”
ŞİMŞEK IS NOT THE SOLE SOLUTION
In the article, which mentioned Erdogan’s statement that he would continue his policy of lowering interest rates and that he did not make any changes to his policies despite accepting high inflation, it was stated that it would be difficult to convince the markets. that Şimşek’s re-election would not mean real change on its own.
In 2015, as investors became nervous about Erdogan’s unorthodox economic ideas, Şimşek, a former Wall Street banker who was appointed deputy prime minister to reassure markets, earned credit for being finance minister from 2009 to 2015.
His experience as a banker at UBS on Wall Street and Merrill Lynch in London is expected to be of great importance to foreign investors; However, it became known that the markets described Mehmet Şimşek as a ‘trap’, understanding that economic decisions were in the hands of those who followed the idea that “lowering interest rates is the way to combat inflation.”
It was also recalled that Şimşek, who served as Deputy Prime Minister and Finance Minister between 2009 and 2018, did not take any government post afterwards.
THEY WILL ALSO LOOK AT OTHER APPOINTMENTS
The article said that analysts will follow other appointments, such as the central bank, to gauge Erdogan’s willingness to cede authority in economic management.
It was said that the authorities would be constrained by Erdogan’s strange ideas and whims.
The article, which noted that the closest way to guarantee independence is a constitutional amendment loosening the president’s grip on the economy, also claimed that Erdogan vastly expanded his powers with the 2017 referendum and showed no tendency to budge.
“In the absence of such evidence, investors should place little emphasis on the identity of the next finance minister when assessing Turkey’s future in Erdogan’s third decade in office,” the article said.