By Nicholas Kulish
Thursday, February 12, 2009
PASSAU, Germany: The stabbing of the police chief here in December provoked a nationwide furor because the victim, Alois Mannichl, was known as a staunch opponent of neo-Nazis, who were immediately blamed for the attack.
But the loud public protests and demonstrations in the streets of Passau gave way to silence, as days stretched into weeks and the case remained unsolved. Speculation that the perpetrator was a member of the police chief's family ran rampant, from local gossip all the way up to the leading newspapers and magazines in Germany.
What had become an instant symbol of out-of-control right-wing violence quickly turned into an investigation under the microscope. Here in this ancient city, which traces its history back to Roman times and earlier, the case and its aftermath have dredged up a reputation for ties to Nazism that civic leaders had worked hard to shed.
Now two months after the crime shook the country, the police and prosecutors here said Wednesday in a statement that they were more or less back to square one, ruling out Mannichl's wife and children while still searching for a man who is 6-foot-3, powerfully built, with close-cropped hair and possibly a tattoo on his neck, the same description released Dec. 14, the day after the attack.
"At this point, there is no evidence that the crime was committed by anyone in the family circle," said the statement. The 50-member special investigative commission established in the days after the attack is investigating "in all directions," but has no "hot lead" at this stage, the statement said.
The attack on Mannichl, which was serious but not fatal, renewed calls nationwide for a ban against the far-right National Democratic Party, known by its German initials as the NPD It also further inflamed concerns about a rise in violence by the extreme right.
In the state of Bavaria, where Passau is located, the number of right-wing-motivated assaults rose to 76 in 2007 from 42 in 2006, the most recent government figures available. But the newspaper Frankfurter Rundschau has reported unreleased figures that through the first 10 months of 2008, right-wing violent crimes increased 15 percent nationwide.
Mannichl has been known for his hard line against the extreme right, but earned the particular enmity of neo-Nazi groups after ordering the opening of the grave of a prominent former Nazi, Friedhelm Busse, after his death last July. Busse was buried with a flag bearing a swastika, which is outlawed in Germany, and the police removed the flag as evidence.
Around 5:30 p.m. on Dec. 13, an attacker plunged a knife into Mannichl's chest outside his home on a quiet residential street in the tiny town of Fürstenzell near Passau, narrowly missing his heart, according to news reports. Mannichl said after the attack that his attacker yelled, "Greetings from the national resistance" and "You won't be trampling on the graves of our comrades anymore."
The attack made headlines nationwide, as did a candlelight vigil in Mannichl's honor. "When anyone is attacked by a right-wing extremist, it is an attack on us all," said Chancellor Angela Merkel in an interview the next week.
The day after the attack, the police arrested two men, ages 26 and 27, in connection with the crime. Two days later, a couple from Munich were detained for questioning as potential accomplices.
Yet all four were quickly released. And the questions began to mount, in particular around the fact that the knife used in the attack reportedly came from Mannichl's house. He explained that it had been used for cutting gingerbread during a neighborhood Advent celebration and that it had been left outside, where the assailant could have picked it up.
Heinz Fromm, the president of the domestic intelligence agency, the Federal Office for the Protection of the Constitution, said publicly that the office had no evidence linking the crime to right-wing extremists. And conjecture about the case, and Mannichl, evolved into a popular parlor game from Passau clear to the capital, Berlin.
The national news magazine Stern later reported that it was "more or less being openly speculated that the police chief could have been the victim of a family drama" and might have sent his own police force on a wild goose chase.
Other possibilities aired publicly included the attacker was from the punk or goth scene or was an angry criminal out for revenge who only pretended to be a neo-Nazi to disguise his identity.
Mannichl declined to be interviewed for this article, but told a Munich newspaper last month that he was trying to live with the "virulent speculation." He described the questions surrounding the case as "a deep valley" in his life.
Members of the local NPD, who have long accused Mannichl of harassment, organized a protest against what they called unfair "baiting" of the right wing in connection with the case. On Jan. 4, some 200 far-right demonstrators from all over Germany gathered in Passau, where they were confronted by roughly 1,000 counterprotesters and nearly as many police officers. There were several arrests but no violence.
For Passau, a city of 50,000 that sits at the confluence of three rivers, the Inn, the Ilz and the Danube, and seeks to lure tourists to the narrow lanes of its quaintly lovely medieval old town, it was all an unwelcome return to what officials call an unfair reputation as a "brown city," a reference to the brown shirts that came to identify the Nazi party.
Passau gained international notoriety as a symbol of Germany's uneasy relationship with its past in the Academy Award-nominated film "The Nasty Girl," based on the true story of Anna Rosmus, who faced death threats when she began looking into the Nazi past of her hometown in 1980 when she was 19.
Passau remained a popular gathering spot for the far right, both the NPD and the German People's Union, until just a few years ago, because of its connection to famous Nazis (Hitler lived here for two years as a child) but also because they could hold their local gatherings in Nibelung Hall, a 1934 example of Nazi architecture.
But the city has steadily evolved into a more cosmopolitan, open place. A university established here in 1978 brought 8,000 students and a cultural shot in the arm.
The fall of the Iron Curtain and the integration of Europe has turned Passau's location in what was once an isolated corner of Germany into a crossroads and a destination. Nibelung Hall was torn down in 2004, and its replacement is called the Dreiländerhalle, or Hall of Three Lands.
Friday, February 13, 2009
Balkan states get new EU warning
Romania has lost momentum in its judicial reforms while Bulgaria has made some progress, the European Commission says.
The two Balkan neighbours - the EU's newest members - are subject to special commission monitoring because their justice systems are seen to be flawed.
In November the commission stripped Bulgaria of 220m euros (£188m) in EU funding because of corruption.
Both countries risk new penalties if they fail to make progress by July.
"It is important that the Romanian authorities regain momentum on judicial reform and the fight against corruption so as to reverse certain backward movements of recent months," the commission said on Thursday.
"This means in particular adopting the codes needed to modernise the legal system and showing through an expeditious treatment of high-level corruption cases that the legal system is capable of implementing the laws in an independent and efficient way."
The commission criticised the Romanian parliament, saying it had blocked investigations into some high-level corruption cases.
On Bulgaria, the commission noted "some initial steps" towards structural and legislative reform had been taken in the prosecution office, justice ministry and interior ministry.
"These measures need to be sustained and further extended in order to deliver concrete results," it said.
Bulgaria has set up joint investigation teams combining prosecutors with security agents and interior ministry officers, but the commission called for "indictments regarding the serious crime groups targeted by these joint teams".
The two Balkan neighbours - the EU's newest members - are subject to special commission monitoring because their justice systems are seen to be flawed.
In November the commission stripped Bulgaria of 220m euros (£188m) in EU funding because of corruption.
Both countries risk new penalties if they fail to make progress by July.
"It is important that the Romanian authorities regain momentum on judicial reform and the fight against corruption so as to reverse certain backward movements of recent months," the commission said on Thursday.
"This means in particular adopting the codes needed to modernise the legal system and showing through an expeditious treatment of high-level corruption cases that the legal system is capable of implementing the laws in an independent and efficient way."
The commission criticised the Romanian parliament, saying it had blocked investigations into some high-level corruption cases.
On Bulgaria, the commission noted "some initial steps" towards structural and legislative reform had been taken in the prosecution office, justice ministry and interior ministry.
"These measures need to be sustained and further extended in order to deliver concrete results," it said.
Bulgaria has set up joint investigation teams combining prosecutors with security agents and interior ministry officers, but the commission called for "indictments regarding the serious crime groups targeted by these joint teams".
Thursday, February 12, 2009
Dutch MP banned from entering UK
A Dutch MP who described the Koran as a "fascist book" has been banned from entering the UK amid fears his presence would endanger public security.
Freedom Party MP Geert Wilders was invited to show his controversial film - which links the Islamic holy book to terrorism - in the UK's House of Lords.
But Mr Wilders, who faces trial in his own country for inciting hatred, has been denied entry by the Home Office.
Mr Wilders said the move was "cowardly" but one peer said it was "welcome".
'Offensive'
Mr Wilders' film Fitna caused outrage across the Muslim world when it was posted on the internet last year.
Its opening scenes show a copy of the Koran followed by footage of the 9/11 attacks in the US and the bombings in Madrid in 2004 and London in 2005.
The Dutch prime minister has said the film served "no purpose other than to offend".
Mr Wilders was asked to show the film at the House of Lords by UK Independence Party peer Lord Pearson.
However, he received a letter from the British Embassy in the Netherlands telling him he would not be allowed into the UK.
The Home Office said there was a blanket ban on Mr Wilders entering the UK under EU laws enabling member states to exclude someone whose presence could threaten public security.
"The government opposes extremism in all forms," it said in a statement, adding that it had tightened up rules on excluding those engaging in "unacceptable behaviour" in October.
"It will stop those who want to spread extremism, hatred, and violent messages in our communities from coming to our country."
Mr Wilders described the decision as "cowardly" and said he still intends to travel to the UK on Thursday to take part in the event.
'Very saddened'
He told the BBC: "It's incredible that an elected politician who was invited by one of your parliamentarians to a discussion with people who are against me, or in favour of me [was banned from the UK]."
Mr Wilders added: "I was surprised and very saddened that the freedom of speech that was a very strong point of UK society has been harassed. I thought Great Britain had the mother of all parliaments."
The Dutch government is reported to be trying to overturn the ban.
In the past, Mr Wilders has called for the Koran to be banned and compared it to Mein Kampf.
Earlier this year, a Dutch court ordered prosecutors to put Mr Wilders on trial for inciting hatred and discrimination by making anti-Islamic statements.
Labour peer Lord Ahmed, who expressed his concerns to the Parliamentary authorities about Mr Wilders' visit, said he welcomed the decision to ban the MP.
"It would be unwise to have him in the UK because this man's presence would cause hatred," he said.
"He has a case against him in the Amsterdam court for inciting hatred."
'Attacked obviously'
Lord Ahmed, who said other Muslim peers shared his concerns, stressed that Mr Wilders' views would certainly present a threat to public order.
"When Muslims are attacked obviously you will see people react to that."
But Lord Pearson said the decision to bar him was "weak and unacceptable in the extreme".
"The Home Office is guilty of appeasement on this, clearly."
The peer said the screening would still go ahead on Thursday whether Mr Wilders was present or not.
He said the parliamentary authorities were happy for the event to take place but had ordered extra security for it.
"The film does not threaten anyone," he said, adding that it simply showed how violent extremists justified their actions.
He said the screening would be followed by a debate on issues relating to the Koran, extremism and freedom of speech.
Freedom Party MP Geert Wilders was invited to show his controversial film - which links the Islamic holy book to terrorism - in the UK's House of Lords.
But Mr Wilders, who faces trial in his own country for inciting hatred, has been denied entry by the Home Office.
Mr Wilders said the move was "cowardly" but one peer said it was "welcome".
'Offensive'
Mr Wilders' film Fitna caused outrage across the Muslim world when it was posted on the internet last year.
Its opening scenes show a copy of the Koran followed by footage of the 9/11 attacks in the US and the bombings in Madrid in 2004 and London in 2005.
The Dutch prime minister has said the film served "no purpose other than to offend".
Mr Wilders was asked to show the film at the House of Lords by UK Independence Party peer Lord Pearson.
However, he received a letter from the British Embassy in the Netherlands telling him he would not be allowed into the UK.
The Home Office said there was a blanket ban on Mr Wilders entering the UK under EU laws enabling member states to exclude someone whose presence could threaten public security.
"The government opposes extremism in all forms," it said in a statement, adding that it had tightened up rules on excluding those engaging in "unacceptable behaviour" in October.
"It will stop those who want to spread extremism, hatred, and violent messages in our communities from coming to our country."
Mr Wilders described the decision as "cowardly" and said he still intends to travel to the UK on Thursday to take part in the event.
'Very saddened'
He told the BBC: "It's incredible that an elected politician who was invited by one of your parliamentarians to a discussion with people who are against me, or in favour of me [was banned from the UK]."
Mr Wilders added: "I was surprised and very saddened that the freedom of speech that was a very strong point of UK society has been harassed. I thought Great Britain had the mother of all parliaments."
The Dutch government is reported to be trying to overturn the ban.
In the past, Mr Wilders has called for the Koran to be banned and compared it to Mein Kampf.
Earlier this year, a Dutch court ordered prosecutors to put Mr Wilders on trial for inciting hatred and discrimination by making anti-Islamic statements.
Labour peer Lord Ahmed, who expressed his concerns to the Parliamentary authorities about Mr Wilders' visit, said he welcomed the decision to ban the MP.
"It would be unwise to have him in the UK because this man's presence would cause hatred," he said.
"He has a case against him in the Amsterdam court for inciting hatred."
'Attacked obviously'
Lord Ahmed, who said other Muslim peers shared his concerns, stressed that Mr Wilders' views would certainly present a threat to public order.
"When Muslims are attacked obviously you will see people react to that."
But Lord Pearson said the decision to bar him was "weak and unacceptable in the extreme".
"The Home Office is guilty of appeasement on this, clearly."
The peer said the screening would still go ahead on Thursday whether Mr Wilders was present or not.
He said the parliamentary authorities were happy for the event to take place but had ordered extra security for it.
"The film does not threaten anyone," he said, adding that it simply showed how violent extremists justified their actions.
He said the screening would be followed by a debate on issues relating to the Koran, extremism and freedom of speech.
Tuesday, February 10, 2009
Temper tantrums
Feb 5th 2009 | ANKARA
From The Economist print edition
WAS it premeditated? Or did Turkey’s prime minister, Recep Tayyip Erdogan, lose control? Mr Erdogan’s walkout from a debate with Israel’s president, Shimon Peres, in Davos has made him the most talked about Turkish leader since Kemal Ataturk. His audience of financiers and policy wonks was stunned. But Muslims worldwide cheered as Mr Erdogan scolded Mr Peres over Israel’s war in Gaza. “When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches,” thundered a crimson-faced Mr Erdogan.
The incident has led to new debate over Turkey’s strategic alliance with Israel, whether an increasingly erratic Mr Erdogan is fit to lead Turkey at all and, if so, in what direction: east or west? There is no question of Turkey walking away from NATO or the European Union, or scrapping military ties with Israel and America. Mr Erdogan’s critics say his outburst was a ploy to please voters. If so, it worked: his approval ratings have shot up. Polls suggest that 80% of Turks support Mr Erdogan’s actions. His mildly Islamist Justice and Development party will reap dividends in municipal elections on March 29th.
Mr Erdogan’s defiance has also helped to assuage his people’s long-running feelings of humiliation and inferiority, which date back as far as the Ottoman defeat in the first world war. Many insist that Mr Erdogan’s reaction was spontaneous and utterly sincere. Turkey has assumed “moral leadership” based on Western values, opined Cengiz Candar, a liberal commentator. Mindful of the public mood, Turkey’s secular opposition leader, Deniz Baykal, grudgingly declared that his rival had done the right thing.
Not everybody agrees, however. Mr Erdogan’s behaviour makes it less likely that Turkey can successfully mediate between Israel and Syria. His call to Barack Obama to “redefine” what terrorist means has been seen as an appeal to remove the label from Hamas. Although European and American reaction has been muted, in private officials are unhappy. “What [the Davos spat] does leave in Europe is the feeling that Mr Erdogan is unpredictable,” says a European diplomat. Mr Obama is highly unlikely now to pay Turkey an early visit.
Mr Erdogan’s temper tantrums are not new. But they used to be reserved for his critics at home. The Davos affair, says another foreign diplomat, is further evidence of “Mr Erdogan’s conviction that the West needs Turkey more than Turkey needs it.” It is of a piece with Mr Erdogan’s threat to back out of the much-touted Nabucco pipeline to carry gas from the Caspian Sea to Europe via Turkey. In Brussels recently Mr Erdogan said that, if there were no progress on the energy chapter of Turkey’s EU accession talks then “we would of course review our position”. Meanwhile, Turkey sided with Saudi Arabia and the Vatican in opposing a UN statement suggested by the EU to call for the global decriminalisation of homosexuality.
Mr Erdogan’s supporters argue that EU foot-dragging on Turkey’s membership bid explains why Turkey is now seeking new friends in the Middle East and beyond. Its growing regional clout is another reason why the EU should embrace Turkey. But the reverse is also true. It is because it is the sole Muslim country that is at once secular, democratic and allied with the West that Turkey commands such respect in the rest of the world. Growing numbers of Arab investors have flocked to Turkey, “because we see it as part of Europe, not the Middle East,” says an Arab banker in Istanbul.
To retain its allure, Turkey will need to swallow its pride and make further concessions on Cyprus. The EU may suspend membership talks altogether unless Turkey meets a December 2009 deadline to open its ports to Greek-Cypriots. The hope is that Egemen Bagis, who was chosen as Turkey’s official EU negotiator in January, will remind Mr Erdogan that, at least in these talks, it is Turkey that is the supplicant not the other way round.
From The Economist print edition
WAS it premeditated? Or did Turkey’s prime minister, Recep Tayyip Erdogan, lose control? Mr Erdogan’s walkout from a debate with Israel’s president, Shimon Peres, in Davos has made him the most talked about Turkish leader since Kemal Ataturk. His audience of financiers and policy wonks was stunned. But Muslims worldwide cheered as Mr Erdogan scolded Mr Peres over Israel’s war in Gaza. “When it comes to killing, you know very well how to kill. I know well how you hit and kill children on beaches,” thundered a crimson-faced Mr Erdogan.
The incident has led to new debate over Turkey’s strategic alliance with Israel, whether an increasingly erratic Mr Erdogan is fit to lead Turkey at all and, if so, in what direction: east or west? There is no question of Turkey walking away from NATO or the European Union, or scrapping military ties with Israel and America. Mr Erdogan’s critics say his outburst was a ploy to please voters. If so, it worked: his approval ratings have shot up. Polls suggest that 80% of Turks support Mr Erdogan’s actions. His mildly Islamist Justice and Development party will reap dividends in municipal elections on March 29th.
Mr Erdogan’s defiance has also helped to assuage his people’s long-running feelings of humiliation and inferiority, which date back as far as the Ottoman defeat in the first world war. Many insist that Mr Erdogan’s reaction was spontaneous and utterly sincere. Turkey has assumed “moral leadership” based on Western values, opined Cengiz Candar, a liberal commentator. Mindful of the public mood, Turkey’s secular opposition leader, Deniz Baykal, grudgingly declared that his rival had done the right thing.
Not everybody agrees, however. Mr Erdogan’s behaviour makes it less likely that Turkey can successfully mediate between Israel and Syria. His call to Barack Obama to “redefine” what terrorist means has been seen as an appeal to remove the label from Hamas. Although European and American reaction has been muted, in private officials are unhappy. “What [the Davos spat] does leave in Europe is the feeling that Mr Erdogan is unpredictable,” says a European diplomat. Mr Obama is highly unlikely now to pay Turkey an early visit.
Mr Erdogan’s temper tantrums are not new. But they used to be reserved for his critics at home. The Davos affair, says another foreign diplomat, is further evidence of “Mr Erdogan’s conviction that the West needs Turkey more than Turkey needs it.” It is of a piece with Mr Erdogan’s threat to back out of the much-touted Nabucco pipeline to carry gas from the Caspian Sea to Europe via Turkey. In Brussels recently Mr Erdogan said that, if there were no progress on the energy chapter of Turkey’s EU accession talks then “we would of course review our position”. Meanwhile, Turkey sided with Saudi Arabia and the Vatican in opposing a UN statement suggested by the EU to call for the global decriminalisation of homosexuality.
Mr Erdogan’s supporters argue that EU foot-dragging on Turkey’s membership bid explains why Turkey is now seeking new friends in the Middle East and beyond. Its growing regional clout is another reason why the EU should embrace Turkey. But the reverse is also true. It is because it is the sole Muslim country that is at once secular, democratic and allied with the West that Turkey commands such respect in the rest of the world. Growing numbers of Arab investors have flocked to Turkey, “because we see it as part of Europe, not the Middle East,” says an Arab banker in Istanbul.
To retain its allure, Turkey will need to swallow its pride and make further concessions on Cyprus. The EU may suspend membership talks altogether unless Turkey meets a December 2009 deadline to open its ports to Greek-Cypriots. The hope is that Egemen Bagis, who was chosen as Turkey’s official EU negotiator in January, will remind Mr Erdogan that, at least in these talks, it is Turkey that is the supplicant not the other way round.
Marfin begins takeover negotiations for Olympic
By Kerin Hope in Athens
Published: February 9 2009 17:17 | Last updated: February 9 2009 17:17
Greece’s Marfin Investment Group starts negotiations on Tuesday with the Greek government to buy 100 per cent of Olympic Airlines, the ailing state-owned carrier, after an international tender collapsed last week.
Marfin, an investment holding group listed on the Athens stock exchange, said it is committed to investing at least €200m to acquire Olympic – Europe’s last fully state-owned carrier - and restructure its operations.
A Marfin official said the group wants to buy Olympic’s three divisions – flying operations, ground handling and the technical base – which were offered separately in the failed tender.
“It’s all or nothing, Olympic needs restructuring as a fully integrated airline,” the official said.
Marfin was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
Aegean Airlines, a fast-expanding private Greek carrier, last year carried more passengers than Olympic for the first time.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
The Marfin official said the group is open for co-operation with other local investors if they come forward. Last week Athens Airways, a new private airline that operates one domestic route, said it was keen to participate in a rescue bid for Olympic.
Olympic pilots yesterday broke ranks with the airline’s other unions to support Marfin’s bid. The airline’s 4,500 permanent workers still officially support state ownership.
Published: February 9 2009 17:17 | Last updated: February 9 2009 17:17
Greece’s Marfin Investment Group starts negotiations on Tuesday with the Greek government to buy 100 per cent of Olympic Airlines, the ailing state-owned carrier, after an international tender collapsed last week.
Marfin, an investment holding group listed on the Athens stock exchange, said it is committed to investing at least €200m to acquire Olympic – Europe’s last fully state-owned carrier - and restructure its operations.
A Marfin official said the group wants to buy Olympic’s three divisions – flying operations, ground handling and the technical base – which were offered separately in the failed tender.
“It’s all or nothing, Olympic needs restructuring as a fully integrated airline,” the official said.
Marfin was the only group that responded to the government’s last-ditch call for a private Greek investor to rescue the airline, which has been losing an estimated €2m a day.
Aegean Airlines, a fast-expanding private Greek carrier, last year carried more passengers than Olympic for the first time.
The government has set a minimum price of €110m for Olympic based on an independent valuation of its assets. It is keen to reach a deal quickly so that services can be upgraded by the start of the tourist season in April.
Marfin has cash reserves of €1.2bn following the sale last year of its minority stake in Hellenic Telecoms, the public operator, to Deutsche Telekom.
The Marfin official said the group is open for co-operation with other local investors if they come forward. Last week Athens Airways, a new private airline that operates one domestic route, said it was keen to participate in a rescue bid for Olympic.
Olympic pilots yesterday broke ranks with the airline’s other unions to support Marfin’s bid. The airline’s 4,500 permanent workers still officially support state ownership.
Pressure intensifies for Turkey accord with IMF
By Delphine Strauss in Ankara
Published: February 9 2009 23:43 | Last updated: February 9 2009 23:43
Turkey’s government risks losing credibility with investors and missing the best chance in years to tame endemically high inflation and borrowing costs if it backs away from talks with the International Monetary Fund, analysts warn.
An IMF mission left Ankara two weeks ago without reaching agreement about a new financing package.
It has not yet been invited to return, and ministers have made it clear talks will not resume until big differences are resolved.
For months investors have been counting on Turkey securing at least $20bn (€15.6bn, £13.6bn) in IMF funding. Many now wonder if Recep Tayyip Erdogan, the prime minister, who said on Monday Turkey could manage with or without the IMF, will commit to a deal requiring unpopular fiscal tightening.
“The government’s credit is running out,” said Ahmet Akarli, economist at Goldman Sachs. “People are not in panic but everyone is watching this much more closely than two months ago.”
The IMF accepts that Turkey’s public debt will rise this year, when it forecasts a 1.5 per cent contraction in GDP. But it wants a tougher fiscal rule and controls on municipality spending to restore the budget balance in later years.
Mr Erdogan is understandably reluctant to announce such a depressing growth outlook and difficult remedy just before local elections in March – especially as Turkey has to date weathered the crisis much better than eastern European neighbours.
“There is a feeling in the market that Turkey is holding out better in a troubled region,” said Christian Keller at Barclays Capital. Chris Scicluna at Daiwa Securities said Turkey’s tough negotiating tactics reflected “relative underlying strengths”.
The delay has had surprisingly little impact on asset prices or the lira – largely because most investors still expect a deal once elections are over. But to delay leaves Turkey vulnerable to any global upset or signs of trouble in its own economy. Analysts estimate it faces a financing gap of $15bn-$30bn in 2009 and say it will need IMF money to avoid a deeper recession or a lira slide.
If the government were to sign a deal only under duress, after a collapse in confidence, the IMF could impose more stringent terms, Mr Akarli warned. But he thought Turkey might “muddle through 2009” without external help.
Observers also worry the government’s promises of fiscal discipline ring increasingly hollow. Mr Keller said public finances had deteriorated before the crisis. Turker Hamzaoglu, at Merrill Lynch, said: “The government will be perceived as showing reluctance to run prudent fiscal policies.”
Without the anchor of an IMF programme Turkey could also miss a rare chance to bring inflation and interest rates decisively into single digits. Now inflation is subsiding despite the lira’s decline. The central bank has cut rates since November to a record 13 per cent.
Further cuts will depend on tight fiscal policy and an IMF deal. “This is a once in a decade chance to get real interest rates down,” Mr Keller said. “This must be the way to convince politicians.”
● New banknotes depicting a 19th century writer have sparked an online battle between supporters and opponents of Turkey’s socially conservative government, writes Delphine Strauss.
Critics of the ruling Justice and Development party, alert to any hint of deviation from Turkey’s secular constitution, are furious that the 50 lira note carries a picture of Fatma Aliye Hanım. She married at 16 and published her work, signing herself “a woman”, only after winning her husband’s consent.
The central bank says it chose to celebrate someone believed to be Turkey’s first female novelist because she was a prominent defender of women’s rights in the context of her time.
But others claim she favoured Islamic law and regretted the creation of the modern state founded by Mustafa Kemal Ataturk.
Published: February 9 2009 23:43 | Last updated: February 9 2009 23:43
Turkey’s government risks losing credibility with investors and missing the best chance in years to tame endemically high inflation and borrowing costs if it backs away from talks with the International Monetary Fund, analysts warn.
An IMF mission left Ankara two weeks ago without reaching agreement about a new financing package.
It has not yet been invited to return, and ministers have made it clear talks will not resume until big differences are resolved.
For months investors have been counting on Turkey securing at least $20bn (€15.6bn, £13.6bn) in IMF funding. Many now wonder if Recep Tayyip Erdogan, the prime minister, who said on Monday Turkey could manage with or without the IMF, will commit to a deal requiring unpopular fiscal tightening.
“The government’s credit is running out,” said Ahmet Akarli, economist at Goldman Sachs. “People are not in panic but everyone is watching this much more closely than two months ago.”
The IMF accepts that Turkey’s public debt will rise this year, when it forecasts a 1.5 per cent contraction in GDP. But it wants a tougher fiscal rule and controls on municipality spending to restore the budget balance in later years.
Mr Erdogan is understandably reluctant to announce such a depressing growth outlook and difficult remedy just before local elections in March – especially as Turkey has to date weathered the crisis much better than eastern European neighbours.
“There is a feeling in the market that Turkey is holding out better in a troubled region,” said Christian Keller at Barclays Capital. Chris Scicluna at Daiwa Securities said Turkey’s tough negotiating tactics reflected “relative underlying strengths”.
The delay has had surprisingly little impact on asset prices or the lira – largely because most investors still expect a deal once elections are over. But to delay leaves Turkey vulnerable to any global upset or signs of trouble in its own economy. Analysts estimate it faces a financing gap of $15bn-$30bn in 2009 and say it will need IMF money to avoid a deeper recession or a lira slide.
If the government were to sign a deal only under duress, after a collapse in confidence, the IMF could impose more stringent terms, Mr Akarli warned. But he thought Turkey might “muddle through 2009” without external help.
Observers also worry the government’s promises of fiscal discipline ring increasingly hollow. Mr Keller said public finances had deteriorated before the crisis. Turker Hamzaoglu, at Merrill Lynch, said: “The government will be perceived as showing reluctance to run prudent fiscal policies.”
Without the anchor of an IMF programme Turkey could also miss a rare chance to bring inflation and interest rates decisively into single digits. Now inflation is subsiding despite the lira’s decline. The central bank has cut rates since November to a record 13 per cent.
Further cuts will depend on tight fiscal policy and an IMF deal. “This is a once in a decade chance to get real interest rates down,” Mr Keller said. “This must be the way to convince politicians.”
● New banknotes depicting a 19th century writer have sparked an online battle between supporters and opponents of Turkey’s socially conservative government, writes Delphine Strauss.
Critics of the ruling Justice and Development party, alert to any hint of deviation from Turkey’s secular constitution, are furious that the 50 lira note carries a picture of Fatma Aliye Hanım. She married at 16 and published her work, signing herself “a woman”, only after winning her husband’s consent.
The central bank says it chose to celebrate someone believed to be Turkey’s first female novelist because she was a prominent defender of women’s rights in the context of her time.
But others claim she favoured Islamic law and regretted the creation of the modern state founded by Mustafa Kemal Ataturk.
Bad new vibrations
Jan 29th 2009 | ISTANBUL
From The Economist print edition
WIDESPREAD outrage over Israel’s assault on Gaza has sharply soured the tone of Turkey’s people and government towards the Jewish state. The prime minister, Recep Tayyip Erdogan, castigated it for hammering the Palestinians. So far he has resisted a clamour in Turkey to loosen or even sever his country’s close ties with Israel. But some advocates of the strategic friendship between the two countries fear it may be at risk.
Behind the scenes, Turkish policymakers, especially military ones, still cherish their ties with Israel. Speaking this week in Switzerland, Mr Erdogan seemed keen to draw a line under the row. He explained that he was incensed by the war in Gaza particularly because his tireless mediation had brought Israel and Syria close to a deal over the Golan Heights. He said he had also been trying to fix a deal with Hamas over a prisoner exchange, including freedom for a kidnapped Israeli corporal.
Similar rows have occurred before. In 2004 he annoyed Israel by calling it a terrorist state after it assassinated Hamas’s founder, Sheikh Ahmed Yassin, as he left a mosque in Gaza. Mr Erdogan then invited Khaled Meshaal, Hamas’s present leader, to visit Turkey. But Israeli-Turkish relations were mended after prodding by the United States. Military co-operation went on. Israel has invariably chosen to turn a deaf ear to Turkey’s occasionally fierce rhetoric for the sake of that strategic liaison. In a bid to soothe the anger of Jews and Israelis, Turkey’s foreign minister, Ali Babacan, urged Hamas to decide “whether it wants to be an armed group or a political movement”.
But this time Mr Erdogan had been a lot angrier. Israel, he railed, was “committing a crime against humanity…The world must not turn a blind eye to Israel’s savagery…How can such a country, which totally ignores and does not implement the UN Security Council’s resolutions be let through the gates of the UN?”
An education ministry circular particularly annoyed Israel by telling Turkish schoolchildren to observe a minute’s silence in solidarity with Palestinian children. In the event, the Israelis persuaded the Turks to cancel a proposed essay and drawing contest for schoolchildren to air their feelings of hatred towards Israel. Israeli officials were apparently poised to respond by proposing a programme in Israeli schools for discussing the genocide of Armenians by Turks in the first world war.
In any case, anti-Israeli anger on Turkey’s streets rose during the assault on Gaza. In rallies across the country demonstrators chanted “Killer Israel! Nazi Israel! Turkish armies, march on Jerusalem!” Calls to boycott Israeli goods and scrap military co-operation grew louder.
Not for the first time, anti-Semitism reared its head. In the western city of Eskisehir, members of a nationalist group brandished placards that read, “Only dogs can enter: no Armenians or Jews!” An outcry from Turkey’s 25,000-strong Jewish community, plus pressure from the foreign ministry, shamed a local prosecutor into launching a probe. Turkey’s Jewish community issued a rare statement saying that “we Turkish Jews, an inseparable part of the Turkish Republic, feel deep sorrow for the comments appearing in recent days in certain media outlets that belittle and insult our religion and present us as targets.”
An ancient alliance
Turks deny accusations of anti-Semitism, noting that the Ottoman Sultans opened their doors over 500 years ago to Jews fleeing from Christian persecution in Spain. In 1948, Turkey was among the first countries to recognise Israel. Under a military co-operation deal in 1996, Israeli pilots have been training in Turkish skies. In 2007, bilateral trade rose to $2.7 billion. Between 2006 and 2007, the number of Israelis visiting Turkey went up from 362,000 to 511,400—more than 7% of Israel’s population. Turkey has also earned praise from the Americans for its recent mediation between Syria and Israel.
But anti-Semitism is often part of a general anti-Christian and anti-Western feeling. “Jew” and “Armenian” are both often used as slurs. Last year a Pew Global Attitudes Survey found that anti-Jewish sentiment in Turkey had risen: 76% said they had negative views towards Jews, whereas only 7% said they looked kindly on them.
Anti-Semitism was also blatant during a campaign against an Israeli financier, Sammy Ofer, who had planned to invest with a Turkish partner in rehabilitating Istanbul’s historic Galata district and its port near the Golden Horn. The tender was cancelled amid widespread claims that the deal was crooked and that “Jewish capital” was trying to take over the country.
Radical Turkish Islamists have long tried to stir up anti-Semitism. Their long-standing jibe against the secular Kemal Ataturk, modern Turkey’s founder, was that he was “really a Jew”. In recent years assorted leftists and Kemalists have joined an anti-Jewish chorus that frequently accompanies hostility to America, which is often accused of plotting with Israel to set up an independent Kurdish state in northern Iraq that will eventually take large chunks out of south-eastern Turkey.
Behind-the-scenes lobbying by Turkish, American and European Union diplomats may have persuaded Mr Erdogan to tone down his language. He recently told Turkey’s parliament, “As a leader, I have said that anti-Semitism is a crime against humanity.” But if anti-Israeli rhetoric in Turkey persists, the Israeli lobby in the United states could hit back by backing a congressional resolution to call the mass killings by Turks of some 1m Armenians “genocide”. Hitherto, Israel’s influential lobby in America has repeatedly helped block such a resolution, though Barack Obama and his vice-president, Joe Biden, have both referred to genocide in the past and have pledged to back the bill.
Secret talks between Turkey and Armenia to open diplomatic ties and reopen their borders are hotly opposed by some in the Armenian diaspora’s lobby in America. American Jews have long felt queasy about defending Turkey over the massacre of Armenians. Hitherto, pragmatism has prevailed and they have sided with the Turks. But if Mr Erdogan keeps on lambasting Israel, they may change their mind.
From The Economist print edition
WIDESPREAD outrage over Israel’s assault on Gaza has sharply soured the tone of Turkey’s people and government towards the Jewish state. The prime minister, Recep Tayyip Erdogan, castigated it for hammering the Palestinians. So far he has resisted a clamour in Turkey to loosen or even sever his country’s close ties with Israel. But some advocates of the strategic friendship between the two countries fear it may be at risk.
Behind the scenes, Turkish policymakers, especially military ones, still cherish their ties with Israel. Speaking this week in Switzerland, Mr Erdogan seemed keen to draw a line under the row. He explained that he was incensed by the war in Gaza particularly because his tireless mediation had brought Israel and Syria close to a deal over the Golan Heights. He said he had also been trying to fix a deal with Hamas over a prisoner exchange, including freedom for a kidnapped Israeli corporal.
Similar rows have occurred before. In 2004 he annoyed Israel by calling it a terrorist state after it assassinated Hamas’s founder, Sheikh Ahmed Yassin, as he left a mosque in Gaza. Mr Erdogan then invited Khaled Meshaal, Hamas’s present leader, to visit Turkey. But Israeli-Turkish relations were mended after prodding by the United States. Military co-operation went on. Israel has invariably chosen to turn a deaf ear to Turkey’s occasionally fierce rhetoric for the sake of that strategic liaison. In a bid to soothe the anger of Jews and Israelis, Turkey’s foreign minister, Ali Babacan, urged Hamas to decide “whether it wants to be an armed group or a political movement”.
But this time Mr Erdogan had been a lot angrier. Israel, he railed, was “committing a crime against humanity…The world must not turn a blind eye to Israel’s savagery…How can such a country, which totally ignores and does not implement the UN Security Council’s resolutions be let through the gates of the UN?”
An education ministry circular particularly annoyed Israel by telling Turkish schoolchildren to observe a minute’s silence in solidarity with Palestinian children. In the event, the Israelis persuaded the Turks to cancel a proposed essay and drawing contest for schoolchildren to air their feelings of hatred towards Israel. Israeli officials were apparently poised to respond by proposing a programme in Israeli schools for discussing the genocide of Armenians by Turks in the first world war.
In any case, anti-Israeli anger on Turkey’s streets rose during the assault on Gaza. In rallies across the country demonstrators chanted “Killer Israel! Nazi Israel! Turkish armies, march on Jerusalem!” Calls to boycott Israeli goods and scrap military co-operation grew louder.
Not for the first time, anti-Semitism reared its head. In the western city of Eskisehir, members of a nationalist group brandished placards that read, “Only dogs can enter: no Armenians or Jews!” An outcry from Turkey’s 25,000-strong Jewish community, plus pressure from the foreign ministry, shamed a local prosecutor into launching a probe. Turkey’s Jewish community issued a rare statement saying that “we Turkish Jews, an inseparable part of the Turkish Republic, feel deep sorrow for the comments appearing in recent days in certain media outlets that belittle and insult our religion and present us as targets.”
An ancient alliance
Turks deny accusations of anti-Semitism, noting that the Ottoman Sultans opened their doors over 500 years ago to Jews fleeing from Christian persecution in Spain. In 1948, Turkey was among the first countries to recognise Israel. Under a military co-operation deal in 1996, Israeli pilots have been training in Turkish skies. In 2007, bilateral trade rose to $2.7 billion. Between 2006 and 2007, the number of Israelis visiting Turkey went up from 362,000 to 511,400—more than 7% of Israel’s population. Turkey has also earned praise from the Americans for its recent mediation between Syria and Israel.
But anti-Semitism is often part of a general anti-Christian and anti-Western feeling. “Jew” and “Armenian” are both often used as slurs. Last year a Pew Global Attitudes Survey found that anti-Jewish sentiment in Turkey had risen: 76% said they had negative views towards Jews, whereas only 7% said they looked kindly on them.
Anti-Semitism was also blatant during a campaign against an Israeli financier, Sammy Ofer, who had planned to invest with a Turkish partner in rehabilitating Istanbul’s historic Galata district and its port near the Golden Horn. The tender was cancelled amid widespread claims that the deal was crooked and that “Jewish capital” was trying to take over the country.
Radical Turkish Islamists have long tried to stir up anti-Semitism. Their long-standing jibe against the secular Kemal Ataturk, modern Turkey’s founder, was that he was “really a Jew”. In recent years assorted leftists and Kemalists have joined an anti-Jewish chorus that frequently accompanies hostility to America, which is often accused of plotting with Israel to set up an independent Kurdish state in northern Iraq that will eventually take large chunks out of south-eastern Turkey.
Behind-the-scenes lobbying by Turkish, American and European Union diplomats may have persuaded Mr Erdogan to tone down his language. He recently told Turkey’s parliament, “As a leader, I have said that anti-Semitism is a crime against humanity.” But if anti-Israeli rhetoric in Turkey persists, the Israeli lobby in the United states could hit back by backing a congressional resolution to call the mass killings by Turks of some 1m Armenians “genocide”. Hitherto, Israel’s influential lobby in America has repeatedly helped block such a resolution, though Barack Obama and his vice-president, Joe Biden, have both referred to genocide in the past and have pledged to back the bill.
Secret talks between Turkey and Armenia to open diplomatic ties and reopen their borders are hotly opposed by some in the Armenian diaspora’s lobby in America. American Jews have long felt queasy about defending Turkey over the massacre of Armenians. Hitherto, pragmatism has prevailed and they have sided with the Turks. But if Mr Erdogan keeps on lambasting Israel, they may change their mind.
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