Signs of tentative agreement to end Turkey protests

By bne IntelliNews June 14, 2013

bne -

After a late night meeting with Turkish Prime Minister Recep Tayyip Erdogan, a group representing the demonstrators in Taksim Square said early Friday, June 14 a tentative agreement had been reached that could end the two-week protests. The news has buoyed investors, with shares, bonds and the currency all rallying.

Protest leaders said they and Erdogan had agreed at the meeting that the government would not start the construction of a commercial development in Gezi Park in Taksim Square until a court case against the plans had concluded. And that if the court ruled in favour of the government, the matter would be put to a referendum in Istanbul.

The fate of the park is the issue that kicked off the two-week protests; the brutal police actions over what was merely a local environmental enraged many, morphing the protest into country-wide demonstrations against Erdogan and what is being perceived as his increasingly authoritarian and Islamist rule for the past decade. Five people have died and thousands have been injured since the protests began in Gezi Park on May 31, spreading to Taksim Square a day later.

In their announcement just after 3:00am in Ankara, organizers emphasized that the people who have occupied the park for weeks would decide the fate of the protests - and here, point out some, is the problem. The range of protestors is great - some political, some environmental - and minor concessions by the government over the park may not be enough for some.

"Tomorrow, we are going to discuss all of this with the people in Gezi Park and hear their say," said Sami Yilmazturk, a member of Taksim Solidarity. "We are not in a position to impose anything on them, but we've reached our goal here."

Speaking after the late night meeting, government spokesman Huseyin Celik said a public vote would be held on the future of Gezi Park. "The park should not be a place where people live for 24 hours," he said, the BBC reported. "The environmentalists should leave. We will ask everyone in Istanbul what they think. Anyone who does not want a vote cannot speak of democracy." The spokesman added that allegations of "excessive use of force" by the police would be investigated.

Still, Erdogan earlier in the day continued his hard line he has taken against the protestors, branding them "extremists" and "looters". Speaking at a meeting of his ruling AKP in Ankara earlier on Thursday, June 13, Erdogan said: "Our patience is at an end. I am making my warning for the last time... I say to the mothers and fathers, please take your children in hand and bring them out," he added, going on to say that the park belonged not "to occupying forces but to the people."

That's seen as being a bit rich coming from a man who personally ordered revisions to the blueprints for a planned mosque in Taksim Square, which together with the reconstruction of an Ottoman-era army barracks are a long-held dream of the Islamist movement in Turkey and a favourite project of the PM. According to the NYT, at a recent news conference Istanbul's current mayor, Kadir Topbas, seemed to go out of his way to emphasize several times that the plans for the park came directly from Erdogan. "Our prime minister expressly wanted to reconstruct the artillery barracks," Topbas said.

For this reason, it's hard to see how Erdogan, a man with a deep sense of victimhood and little patience with any views and values that aren't his own conservative and deeply religiously ones, will capitulate on the building plans.

These traits also help explain his attitude to outside influence. Erdogan, like other autocrats and dictators, has blamed the usual assortment of outsiders for the troubles: foreign spies, governments, media and financiers.

Erdogan angrily dismissed a resolution passed by European Parliament on Thursday, June 13, which "deplores the reactions of the Turkish Government and of Prime Minister Erdogan, whose unwillingness to take steps towards reconciliation, to apologise or to understand the reactions of a segment of the Turkish population have only contributed to further polarisation".

Tim Ash of Standard Bank called this more of the same from tough-talking Erdogan. "The danger is this more or less kills Turkey's EU accession bid, as the mood music from both sides turns decidedly off-beat. Developments over the past week will just harden entrenched attitudes from the centre-right in continental Europe (Germany, France, Denmark and Austria, amongst others), against Turkey's bid, and make it that much more difficult for Turkey's allies in the EU (the UK, Spain, Italy) to fight its cause still. I also think this will also make the AKP administration look in a different direction, if this was isn't the case anyway over the past 2-3 years. Net-net the EU anchor is being pulled from both sides."

The markets, which initially sold off as the protests spread, have rallied on the signs of a compromise agreement. By midday on Friday, June 14, the Borsa Istanbul Stock Exchange National 100 Index was trading up 2.6% at 78,488, which is up from the recent bottom of 75,041 hit on June 11.

The currency, which has benefited this week from central bank action to stabilize markets, which included currency auctions on Tuesday and planned extra short-term policy-tightening steps, continued its rise to trade above 1.85 to the dollar, its highest level since May 29. "The central bank's aggressive tightening for one day and limited FX sales seem to have been enough to calm the mood on the lira and lead the lira basket down," Erkin Isik, a strategist at TEB-BNP Paribas, told Reuters. "The lira started to reverse its recent underperformance and in the last two days outperformed emerging markets by 1.2%."

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