ISTANBUL BLOG: Erdogan fights war on two fronts

By bne IntelliNews July 30, 2015

Kivanc Dundar in Istanbul -


The ceasefire between Turkey and the Kurdish PKK guerrillas appears to be breaking down, just as coalition talks between the ruling AKP and the opposition CHP had looked promising, raising suspicions over the intentions of President Recep Tayyip Erdogan.

The PKK killed two Turkish police officers in Ceylanpinar on July 21, claiming they had collaborated with the militant Sunni group Islamic State (IS) in a suicide bombing in the border town of Suruc the day before, which killed more than 30 leftwing activists.

Subsequently on July 24 Turkey simultaneously bombed PKK bases in northern Iraq for the first time in four years and security forces rounded up hundreds of suspected IS sympathisers, PKK members and leftwing activists.

The PKK has responded to the aerial campaign with a series of attacks, killing police officers and soldiers in Turkey’s southeastern provinces.

It is not possible to continue the peace process with those who threaten our national unity and brotherhood, declared Erdogan on July 28, referring to the PKK. He also called on parliament to lift the immunity of 80 lawmakers from the largely Kurdish HDP. They should pay the price for their links to the PKK, said Erdogan.

Eye on the prize

Erdogan’s comments, together with the targeting of the PKK and leftwing activists, has strengthened suspicions that the president is trying to undermine coalition talks between his moderate Islamic AKP and the CHP, and would prefer early elections where the ruling party might be able to regain its majority. Erdogan might also be hoping that the renewed military campaign against the PKK will appeal to Turkish nationalists and help the AKP increase its votes in fresh elections.

Since the inconclusive parliamentary elections on June 7, the AKP has been testing the waters for a suitable coalition partner. Some observers believe Erdogan is trying to settle scores with the HDP, which cleared the 10% threshold in the elections by winning votes from Kurds who had previously supported the AKP, depriving the party of its parliamentary majority for the first time since 2002. Liberals, who had previously supported the AKP, as well as leftists who had traditionally voted for the opposition CHP, voted for the HDP in the June elections to prevent the AKP winning a majority and changing the constitution to strengthen Erdogan’s powers.

The airstrikes may be a temporary ploy that Erdogan is using, partly for internal political purposes, David Pollock of the Washington Institute for Near East Policy told Voice of America, while Sinan Ciddi, visiting assistant professor at Georgetown University, argues that “the more international emergencies, the more that voters are likely to think we need a good, strong, stable government”.

“This toughening position expressed by Erdogan accompanied with intensified military action on cross-border PKK targets clearly shows the real motivation behind this campaign is to discredit the HDP in the eyes of Turkish public opinion before a potential early election,” says Serkan Demirtas, a political commentator for Hurriyet Daily News.

Continuing clashes between the PKK and military will alienate some of the HDP voters who assume that there is a close connection between the party and the PKK, says Evren Balta at Yildiz Technical University. So the real target of the military operations is domestic public opinion, and specifically the nationalist/conservative voters, according to Balta.

“[Prime Minister Ahmet] Davutoglu is known to favour a coalition government with the main opposition CHP in the hope of emerging from Erdogan’s shadow and establishing himself as a political force in his own right,” argues Wolfgango Piccoli at Teneo Intelligence. However, Erdogan would prefer an early election in November in the hope that the AKP could come to power on its own and that he would be able to use his considerable informal influence in the party to establish a de facto presidential system, according to Piccoli.

J.P. Morgan analysts think the military activity will complicate coalition formation. “We see the chances as nearly even between a coalition being formed and new elections in November, yet a prolonged conflict with the PKK will increase the likelihood of new elections,” say Yarkin Cebeci and Michael Marrese of J.P. Morgan in a note.

“Up until recently, the only alternative for an AKP-CHP coalition seemed to be a repeat of the election […] but recently there appears to be unnamed cooperation between the AKP and the nationalist MHP,” writes political commentator Murat Yetkin of Hurriyet Daily News. Erdogan would gladly take the country to another election, since he wants to try again to get a stronger mandate for his plans to establish a powerful presidential system, according to Yetkin.

Devlet Bahceli, the leader of the nationalists, previously said that he would hold coalition talks with the AKP only if it ends the peace process with the PKK. Since the rise in terrorist attacks by the PKK, the retaliation by government forces and strong statements by both Erdogan and Davutoglu saying that, under the circumstances, the continuation of the peace talks is not possible, the ice between the AKP and the MHP has started to melt, says Yetkin.

 “The military’s offensive in northern Iraq will toughen the positions of the two sides, the Turkish government and the HDP-PKK, which would cause the resumption of the armed conflict”, warns Demirtas. An end to the Kurdish process would also slow down Turkey’s democratisation process and potentially worsen its relationship with its Western partners, according to Demirtas.

Ceasefire in danger

The attacks on the PKK risk ending the already shaky two-year ceasefire with the guerrilla group, amid growing Turkish fears over the success of Syrian Kurds across the border in carving out an area of control in their battle against Islamic State.

“With the bombardment, Turkey has ended the ceasefire,” Zagros Hiwa, a spokesman for the PKK based in the Qandil Mountains, told British daily The Independent. “It ended the ceasefire and it ended the peace process unilaterally. From now on, we will continue our struggle against all odds”, Hiwa said.

Turkey’s Kurdish insurgency cost 40,000 lives over three decades. During the 1980s and 1990s Turkey tried to solve its Kurdish problem by military means and by repressing all democratic demands of its Kurds. But this approach failed miserably and the PKK only grew stronger until its leader Abdullah Ocalan was captured in 1999 in Nairobi and taken to Turkey.

The airstrikes on PKK headquarters and the group’s armed units in the Qandil Mountains of Northern Iraq is therefore a very risky move for Erdogan, who had taken the risk of alienating nationalist voters when he first launched the peace process with the Kurdish group.

However, Erdogan now fears that the emergence of a Kurdish state in Northern Syria could embolden the PKK and Turkey’s Kurds. The PKK claims that Turkey has in fact been tacitly supporting the Islamic State in Syria against the YPG, the armed wing of the Syrian Kurdish group PYD, which is a PKK-affiliated Kurdish group in Syria.

The main aim of Turkey's recent military operations in northern Syria and Iraq is to prevent Kurdish territorial unity and not to combat Islamic State, HDP’s co-chair Selahattin Demirtas said in an interview with Reuters on July 30.

Strategic move

Erdogan’s move has also led to a sharp change in Turkey’s policy towards IS and brought it closer to the US.

Following the Suruc suicide bombing and the killing of a soldier in subsequent clashes with IS militants on the Syrian border, Turkey carried out airstrikes against IS targets in northern Syria on July 24.

Crucially, Ankara also decided to open its strategically located Incirlik airbase to the US-led coalition forces to be used in operations against the militant group.

Turkey and the US have agreed in general terms on a plan that envisions American warplanes, Syrian insurgents and Turkish forces working together to sweep Islamic State militants from a 60-mile-long strip of northern Syria along the Turkish border, the New York Times reported on July 27. The plan would create what officials from both countries are calling an Islamic State-free zone controlled by relatively moderate Syrian insurgents, according to the New York Times.

This is a strategic move by Erdogan to prevent the emergence of a completely Kurdish-controlled belt in Northern Syria. Up to now Turkey has been  reluctant to take a leading role in the US-led international anti-IS coalition but has now suddenly changed its position after the Suruc attack.

Syrian Kurdish militia YPG has been a reliable and effective partner on the ground in the US’s fight against the Islamic State. The YPG has made significant military gains against IS militants with the help of US aerial support, driving the IS from more and more towns in the north of Syria. Some observers therefore think Ankara used the Suruc attack as a pretext to establish a safe zone in Syria to prevent further advances by the YPG.

"The dynamic in Syria was going against Turkish interests," Sinan Ulgen, visiting scholar at Carnegie Europe and chairman of the Istanbul-based EDAM think-tank told Reuters. "First, Islamic State was expanding northwest and continuing to take ground along the border. Secondly, there was the fear that the expansion of the [Kurdish] PYD could ultimately establish a Kurdish territory stretching from Iraq to the Mediterranean. These two dynamics forced Turkey's hand," said Ulgen.

Subsequently the US has given guarded support to the Turkish crackdown on the PKK. Turkey has the right to defend itself against terrorist attacks by the PKK, said US White House spokesman Alistair Baskey, urging Kurdish rebels to renounce terrorism. But, the White House official also warned that Turkey should avoid violence towards the PKK and seek to de-escalate the conflict.

Economic repercussions

The Turkish economy is likely to feel the impact of the geopolitical tensions and renewed clashes with the PKK, as consumer and business sentiment will take a hit and investors become more nervous.

The Turkish lira slid 3.2% against the dollar between July 20 when the Suruc suicide attack took place and July 30, while the yield of the country’s benchmark bond rose from 9.64% to 10.04%.

Turkey’s strong economic growth, which guaranteed the AKP’s sweeping election victories, has already been slowing. This year’s 4% growth target is not likely to be met. Tensions with the Islamic State and the Kurds may also hit much-needed tourism revenues. Foreign tourist visits to Turkey declined by 5% y/y to 4.1mn people in June, the Ministry of Tourism said on July 29.

“Real money and leveraged investors started to close many of the lira longs established in the previous weeks. We believe this process is not over yet,” Bloomberg quoted Citigroup’s London-based currency strategist Luis Costa as saying.

Bloomberg also reported on July 27 that Aberdeen Asset Management, which oversees about $12bn in emerging market debt, was not sure it would be returning to the country anytime soon.

“The collapse in the Kurdish peace process leaves Turkish markets disproportionately highly exposed to a shock,” Wolf-Fabian Hungerland, a Hamburg-based economist at Berenberg Bank told Bloomberg.

Growth prospects would likely deteriorate if political uncertainty deepens in the coming weeks, warned J.P. Morgan, putting, however, more emphasis on the coalition talks than IS and PKK-related developments. If Turkey heads to another round of elections, the continued political uncertainty could well result in weaker growth prospects, a weaker lira, higher inflation and a smaller current account deficit, said the investment bank, adding that the impact would naturally be much greater if the security situation worsens further.

If the formation of the new government extend into the new year and political uncertainty lingers on, this could potentially shave off 0.3% of 2016 growth, according to J.P Morgan. The bank expects the Turkish economy to grow by 3.1% this year and 3.5% in 2016.

“If political uncertainty continues, the lira will likely come under pressure. A 10% lira depreciation could easily push yearly inflation up by 1.5%,” said J.P Morgan analysts. 

Related Articles

Turkey approaches day of reckoning on economic reform

Kivanc Dundar in Istanbul -   The unexpected success of President Recep Tayyip Erdogan’s Justice and Development Party (AKP) in this month’s general election should bring much-desired political ... more

Macedonia kept on hold as Balkans edges towards EU goal

Clare Nuttall in Bucharest -   Macedonia’s EU accession progress remains stalled amid the country’s worst political crisis in 14 years, while most countries in the Southeast Europe region have ... more

Turkey and America seen on course for confrontation in Syria war

John Davison of Exaro - Military action by Turkey against Kurdish rebel forces in Syria raises the prospect of a direct clash with the ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.