Turkey vows to destroy terror corridor in N Syria regardless of US talks

ANKARA

Turkey has reiterated its vow to smash the terror corridor in northeastern Syria regardless of the ongoing talks with the United States on setting up a safe zone, President Recep Tayyip Erdoğan said on July 26. He called Turkey’s NATO ally to act with common sense over their S-400/F-35 spat to avoid further injustice towards Turkey.

“We are determined to shatter the terror corridor east of the Euphrates, no matter how the negotiations with the U.S. to establish a safe zone along the Syrian borders concludes,” Erdoğan said, speaking at the provincial headquarters meetings of his party.

Turkey has ramped up warnings of a possible incursion into northern Syria in recent days, saying it had run “out of patience” with Washington over the safe zone talks.

“Those who put their trust in foreign powers in the region will be put underground,” he said, referring to the YPG group in northern Syria, which is allied with the United States in the fight against the ISIL threat.

Ties between Ankara and Washington have been strained over a host of issues. Turkish and U.S. officials have been holding talks for a safe zone east of the Euphrates River to address Turkey’s security concerns stemming from the presence of the YPG members, which Turkey considers as the Syrian branch of the illegal PKK group. Turkey has warned of a possible new offensive into Syria if no agreement is reached.

The president said his administration plans to start using the Russian S-400 missile defense system -- a bone of contention with the United States -- in April 2020. “In the coming spring, God willing in April 2020, we will be able to start using this system,” he stated.

The United States said last week it was removing its NATO partner, Turkey, from the F-35 fighter jet program, as long threatened, after Ankara purchased and received delivery of the S-400s , which Washington sees as a security threat. Washington has also threatened to impose further sanctions on Turkey, though Ankara has dismissed the warnings.

Erdoğan said he hoped U.S. officials would be “reasonable” on the question of sanctions, adding that Turkey may also reconsider its purchase of advanced Boeing aircraft from the United States.

Calling out the U.S. Congress, he said, “When we wanted to buy the Patriots during the Obama era, you didn’t give them. In the time of Mr. Trump, you are now trying to stop us again. We want to get it with our money, you don’t give. Then what do we do? Whoever gives it, we will go to it.”

“Are you not giving us the F-35s? OK, then, excuse us, but we will once again have to take measures on that matter as well and we will turn elsewhere,” he stated. “No threats or sanctions against Turkey, especially threats to remove (Turkey) from the F-35 project, will prevent Turkey from ensuring its security priorities.”

“I hope the U.S. will act with a good sense regarding the S-400.”

“Even if we’re not getting F-35s, we are buying 100 advanced Boeing aircraft, the agreement is signed... At the moment, one of the Boeing planes has arrived, and we are making the payments; we are good customers,” he said. “But if things continue like this, we will have to reconsider this.”

Erdoğan also said Turkey had caught or killed all suspects behind the killing of a Turkish consulate employee last week in Iraq’s semi-autonomous Kurdish region.

Deeper rate cuts are needed to bring inflation down

Furthermore, the president welcomed the Turkish Central Bank’s move to slash key rates, but said deeper cuts are needed to bring inflation down.

“I see the rate cut the Central Bank delivered as a crucial turning point. But this is not enough, interest rates should be lowered gradually until the end of the year,” he said.

The president’s remarks came one day after the country’s Central Bank slashed the key policy rate (one-week repo auction rate) by 425 basis points to 19.75 percent from 24 percent, the first reduction since February 2015.

“I had long argued that the 24 percent interest rate is way too high. I have, for many years, voiced my discontent with high rates. But we could not get my views through to then-Central Bank governors. Whenever we spoke our mind, certain circles argued that a dramatic decline in interest rate would hurt the economy,” he said.

Former Governor Murat Çetinkaya was dismissed from his post early on July 6 via a presidential decree, to be replaced by his deputy governor Murat Uysal.

Commenting on the removal of Çetinkaya, Erdoğan said on July 9 that the former governor’s decisions had burdensome costs, which were “beyond endurance,” and thus a change was needed.

“[On July 25], the Central Bank cut the rates by 425 basis points. What happened? Did hell break loose, did everything collapse? No, none of this happened. The markets were calm after the rate decision. Because this was what was supposed to be happen,” Erdoğan told party officials.

Erdoğan added that the bank’s decision was a welcomed move but it was “not enough,” saying the rate cuts should continue until the end of the year.

He also said that high interest rates hinder production, investment and the country’s potential.

“High interest rate is the biggest hurdle in the economy’s path,” Erdoğan noted.

The president said that inflation would swiftly come down as interest rates started to decline.

Indicators suggest that inflation will ease to single-digits in the second half of the year, according to Erdoğan.

The latest official data showed that the annual inflation rate declined to 15.72 percent in June from the previous month’s 18.71 percent.

The president added that investments and employment will pick up in the period ahead.

“The recovery in the economy will gather pace in the third quarter of this year,” he said.

In the statement released after the Monetary Policy Committee meeting on July 25, the Central Bank noted that recently released data indicate a moderate recovery in the economic activity.

Net exports are expected to contribute to the economic growth and the gradual recovery is likely to continue with the help of the disinflation trend and the partial improvement in financial conditions, according to the Central Bank.