Erdoğan gets emergency powers over economy

Turkish President Recep Tayyip Erdoğan won new emergency powers over the economy, according to a decision by parliament.

Erdoğan may now take all steps needed to right the economy and financial system should so-called “negative developments” occur, details of legislation passed by the assembly late on Wednesday showed.

The new laws also allow for the establishment of the Financial Stability and Development Committee, which will be tasked with coordinating efforts to preserve stability and security under the auspices of the Treasury and Finance Ministry, ran by Erdoğan’s son-in-law, Berat Albayrak.

Erdoğan is then authorised to take measures beyond the committee’s powers, should he deem such steps necessary.

The Turkish president helped provoke a meltdown in the lira early last year when he said higher interest rates lead to higher inflation, contravening traditional economic theory. His opposition to interest rate hikes tied the central bank’s hands as it fought to arrest the lira’s slump.

While Erdoğan blamed Turkey’s currency crisis – which saw the lira hit a record low of 7.22 per dollar in August – on a foreign conspiracy, his expansionist economic policies had already unnerved investors, prompting the government to take emergency measures. The lira extended its declines after President Donald Trump imposed economic sanctions on the country for the detention of U.S. pastor Andrew Brunson, who was released in October.

Erdoğan strengthened his executive powers at general elections in June, which heralded the introduction of a new presidential system of government that abolished the position of prime minister and reduced parliament’s remit.

Some economists and business leaders have called on Erdoğan's government to set out a clear timetable of measures to right Turkey's economic imbalances and encourage investment, whether or not that be under a new International Monetary Fund standby accord.