Turkish protestors issue demands as PM prepares to return

By bne IntelliNews June 6, 2013

bne -

With Prime Minister Recep Tayyip Erdogan set to return to the country after a foreign trip to Morocco, the Turkish protests stretched into a seventh day on June 6 having renewed their momentum the previous day. Rejecting the government's half-hearted attempts to soothe the anger on the streets, protestors delivered a list of demands, and how the PM responds on landing will have a huge bearing on subsequent events.

Rejecting the partial apology of Deputy PM Bulent Arinc, a group calling itself the Taksim Solidarity Platform (TSP) said on June 5 it had handed the official the list at a meeting in Ankara. The demands include a call for police chiefs and others responsible to attacks on protestors to be dismissed, as well as the governor of Istanbul.

The activists also demanded a ban on the use of tear gas, the release of those detained during the recent events, and a halt to the redevelopment of Gezi Park at Taksim Square. "The steps the government takes will shape the events," the TSP said following the meeting.

On June 4, Arinc - playing the good cop to Erdogan's bad - offered an apology for the harsh police response to the original protestors against the development of the park. However, he added that no regrets should be expressed over other actions by the authorities. The comments did little to stem the protests, and TSP said on June 5 that his words were "reminiscent of a civil war".

On the streets, police again fired tear gas and water cannon in Ankara at crowds on June 5, while reports emerged of the death of a third protestor. In Istanbul, a second major trade union federation - representing hundreds of thousands of workers - joined the protests. All those events, on top of the apparent increased organization amongst the crowds, suggest the protests certainly have the momentum to push through to Friday prayers and into the weekend, when they will likely see the numbers on the street boosted.

Meanwhile, in an ominous note, the Kurdish militant group PKK warned that the crackdown is putting its ceasefire with Ankara at risk. "It is a clear fact that this police violence implemented by the AK Party government is contrary to the spirit of the current democratic resolution process," said a PKK statement, according to Reuters.

All eyes now turn to the return of Erdogan from his three-day trip to Morocco. The PM has maintained his confrontational stance throughout, although he has been quieter as events have continued to grow, leaving Arinc and President Gul to offer the more conciliatory tone. That has not cleared the streets however, with Erdogan's "authoritarian" style of government the main target. How the PM responds on landing will have a large bearing on the next events.

On the one hand, the emergence of an organized hub - at least as far as negotiations with the authorities are concerned - suggests that protestors are ready for the long haul, and a clear set of goals offers a greater chance that momentum can be maintained. On the other, the demands offer a marker for the possible end of the clashes. In addition, the moderate nature of the demands - no call for the PM to go for instance - offers Ankara an invitation for a relatively easy climb down.

Whether Erdogan will be able to bring himself to do that is another matter. "These are pretty far reaching demands for PM Erdogan to accept," notes Tim Ash at Standard Bank, before adding that "if Erdogan wants to clear the streets and restore calm quickly, he has to make some significant concessions to the demonstrators".

However, analysts at VTB Capital say "it is almost impossible for Erdogan to accept the demand" for the resignations.

Ash says he thinks Erdogan will will offer some form of couched apology/commissions of inquiry into the various issues which have arisen. "The markets might initially like this, and might rally, but I don't think this will satisfy the bulk of the secular opposition who I think for the first time in a decade feel that they have identified a chink in the armour of the AKP/Erdogan... and they will be reluctant to let go of this opportunity. The danger therefore is that we see a long summer of similar street protests."

With the protests showing few signs of ending, investors again retreated on June 5 following the stabilization of the markets the previous day. The lira lost ground, while Turkish credit default swaps (CDS) - essentially debt insurance - rose to their highest in over six months.

The lira fell to 1.8820 against the dollar - from 1.8804 on June 4 - it hit its weakest level since January on June 3 at 1.9005, reports Reuters, while CDS rose seven basis points to 148 bp. The two-year benchmark bond yield rose 14 bp to 6.17, while the main Istanbul equities index fell 0.54%, having partially recovered from losses of over 10% on June 3.

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