Finance Minister: Turkey Will Emerge Stronger from Lira Crisis Despite Row with US

Finance Minister Berat Albayrak assured international investors on Thursday that Turkey would emerge stronger from its currency crisis, insisting its banks were healthy and signalling it could ride out a dispute with the United States.

In a conference call with thousands of investors and economists, Albayrak — who is President Tayyip Erdogan’s son-in-law — said Turkey fully understood and recognised all its domestic challenges but was dealing with what he described as a market anomaly.

With Ankara locked in a complex rift with Washington, he also played down a decision by President Donald Trump to double tariffs on imports of Turkish metals. Washington later said it was ready to impose further economic sanctions on Turkey.

Many countries had been the target of similar U.S. trade measures, Albayrak said, and Turkey would navigate this period with other parties such as Germany, Russia and China.

Turkey, he said, has no plans to seek help from the International Monetary Fund or impose capital controls to stop money flowing abroad in response to the recent collapse of its lira currency.  Before he spoke, the lira strengthened more than 3 percent, despite signs that the dispute with the United States is as wide as ever.

The lira held steady during Albayrak’s conference call but later weakened when Treasury Secretary Steven Mnuchin said the United States was prepared to levy more sanctions on Turkey if detained American pastor Andrew Brunson was not freed.

The Turkish currency was trading at 5.85 at 1740 GMT, more than 1 percent stronger on the day. Turkey’s sovereign dollar bonds extended their gains.

The lira hit a record low of 7.24 to the dollar earlier this week, down 40 percent this year, as investors fretted over Erdogan’s influence over monetary policy and the row with the United States.

Turkey’s foreign minister said Ankara did not want any problems with Washington.

“We can solve issues with the United States very easily, but not with the current approach,” Mevlut Cavusoglu told a news conference in Ankara late on Thursday.

Facing Turkey’s gravest currency crisis since 2001 in his first month in the job, Albayrak has the daunting task of persuading investors that the economy is not hostage to political interference.

Albayrak, a 40-year-old former company executive with a doctorate in finance, said Turkey would not hesitate to provide support to the banking sector. The banks were capable of managing the volatility, and there had been no major flow of cash out of deposits lately, he added.

Qatari pledge

Economists gave Albayrak’s comments a qualified welcome, and praised his ambition to get inflation down into single figures next year from above 15 percent now. But his father-in-law’s opposition to higher interest rates may complicate that quest.

“He said all the right things, but it’s one thing saying them and another thing doing them,” said Sailesh Lad at AXA Investment Managers. “He said capital controls weren’t part of the agenda, and never will be. I think a lot of the market liked hearing that.”

The lira gained some support from the announcement late on Wednesday of a Qatari pledge to invest $15 billion in Turkey. Trump has used trade tariffs in a series of disputes ranging from with Turkey and China to the European Union.

In a sign that Turkey may hope to make common cause with other affected countries, Erdogan and French President Emmanuel Macron spoke by phone on Thursday, discussing developing economic and trade ties and boosting bilateral investment, a Turkish presidential source said.

Albayrak will also meet his German counterpart Olaf Scholz in Berlin on Sept. 21.

However, in a potential complication, a foreign ministry source in Berlin said Turkish police had arrested a German citizen. ARD TV reported the man was accused of “terrorist propaganda” after criticising the government on social media.

In another element of the row with Washington, a U.S. court sentenced a senior executive of state-owned Turkish lender Halkbank to 32 months in prison in May for taking part in a scheme to help Iran evade U.S. sanctions. That case has increased speculation that the bank itself could be fined for sanctions-busting.

Halkbank has said all of its transactions were lawful and Albayrak played down the risk. “We are not expecting any fines on Halkbank for sure,” he said. “But hypothetically speaking, …if one of our public banks need help, the government will stand strong by it for sure.”

The White House said on Wednesday that it would not remove steel tariffs on Turkey, appearing to give Ankara little incentive to work for the release of Brunson, a pastor on trial in Turkey on terrorism charges.

Washington wants the evangelical Christian freed but Turkish officials say the case is a matter for the courts.

The pastor row is one of several between the NATO allies, including diverging interests in Syria and U.S. objections to Ankara’s ambition to buy Russian defence systems, that have contributed to instability in Turkish financial markets.

Economic war

Erdogan has repeatedly told Turks to exchange gold and hard currency into lira, saying the country was involved in an economic war with enemies.

However, Turks appeared not to be heeding his appeal. Central bank data showed foreign currency deposits held by local investors rose to $159.9 billion in the week to Aug. 10, from $158.6 billion a week earlier.

Erdogan has called for a boycott of U.S. electronic goods and Turkish media have given extensive coverage to anti-U.S. protests, including videos on social media showing Turks apparently burning dollar bills and destroying iPhones.

More US States Deploy Technology to Track Election Hacking Attempts

A majority of U.S. states has adopted technology that allows the federal government to see inside state computer systems managing voter data or voting devices in order to root out hackers.

Two years after Russian hackers breached voter registration databases in Illinois and Arizona, most states have begun using the government-approved equipment, according to three sources with knowledge of the deployment. Voter registration databases are used to verify the identity of voters when they visit polling stations.

The rapid adoption of the so-called Albert sensors, a $5,000 piece of hardware developed by the Center for Internet Security,  illustrates the broad concern shared by state government officials ahead of the 2018 midterm elections, government cybersecurity experts told Reuters.

CIS is a nonprofit organization based in East Greenbush, N.Y., that helps governments, businesses and organization fight computer intrusions.

“We’ve recently added Albert sensors to our system because I believe voting systems have tremendous vulnerabilities that we need to plug; but also the voter registration systems are a concern,” said Neal Kelley, chief of elections for Orange County, California.

“That’s one of the things I lose sleep about: It’s what can we do to protect voter registration systems?”

As of August 7, 36 of 50 states had installed Albert at the “elections infrastructure level,”according to a Department of Homeland Security official. The official said that 74 individual sensors across 38 counties and other local government offices have been installed. Only 14 such sensors were installed before the U.S. presidential election in 2016.

“We have more than quadrupled the number of sensors on state and county networks since 2016, giving the election community as a whole far greater visibility into potential threats than we’ve ever had in the past,” said Matthew Masterson, a senior adviser on election security for DHS.

The 14 states that do not have a sensor installed ahead of the 2018 midterm elections have either opted for another solution, are planning to do so shortly or have refused the offer because of concerns about federal government overreach.

Those 14 states were not identified by officials.

But enough have installed them that cybersecurity experts can begin to track intrusions and share that information with all states. The technology directly feeds data about cyber incidents through a non-profit cyber intelligence data exchange and then to DHS.

“When you start to get dozens, hundreds of sensors, like we have now, you get real value,” said John Gilligan, the chief executive of CIS.

“As we move forward, there are new sensors that are being installed literally almost every day. Our collective objective is that all voter infrastructure in states has a sensor.”

Top U.S. intelligence officials have predicted that hackers working for foreign governments will target the 2018 and 2020 elections.

Maria Benson, a spokesperson for the National Association of Secretaries of States, said that in some cases installations have been delayed because of the time spent working out “technical and contractual arrangements.”

South Dakota and Wyoming are among the states without Albert fully deployed to protect election systems, a source with knowledge of the matter told Reuters.

The South Dakota Secretary of State’s office did not respond to a request for comment. The Wyoming Secretary of State’s office said it is currently considering expanding use of the sensors.

Russia Calls Latest US Sanctions on Companies in Russia, China, and Singapore ‘Useless’

Russia says the latest U.S. sanctions imposed on Russian, Chinese, and Singaporean companies are “destructive” and “useless.”  

The U.S. penalized the three companies Wednesday, accusing them of helping North Korea avoid international sanctions.

The Russian Foreign Ministry said Thursday the new U.S. sanctions come when “joint international efforts” are needed toward a settlement in North Korea. Moscow said the sanctions could undermine denuclearization talks.

The U.S. has accused a Chinese trading company and its affiliate in Singapore of falsifying documents aimed at easing illegal shipments of alcohol and cigarettes into North Korea. The companies are said to have earned more than $1 billion.

A Russian company was also sanctioned for providing port services to North Korean-flagged ships engaged in illegal oil shipments.

The sanctions freeze any assets the companies may have in the United States and bars Americans from doing business with them.

EU Judicial Body to Suspend Poland for Flouting Freedom of Courts

An organization made up of the judiciaries of European Union states said  Thursday that it planned to suspend Poland, contending that political interference had rendered its legal system no longer independent of the government.

The European Network of Councils for the Judiciary’s (ENCJ) announcement added to widespread criticism of the nationalist government’s changes to the courts since coming to power in late 2015.

The ENCJ’s board said the Polish National Judiciary Council (KRS), which appoints judges and represents Poland at the ENCJ, “is no longer an institution which is independent of the executive and … guarantees the final responsibility for the support of the judiciary in the independent delivery of

justice.”

The ENCJ, which advises the EU’s executive on upholding the rule of law in the bloc, will convene its members September 17 to decide whether to suspend the KRS.

The EU has several legal cases open against Poland for its overhaul of the judiciary, but the ruling Law and Justice (PiS) party says the changes are needed to clear out the legacy of communism and make the courts more effective.

The president of Poland’s Supreme Court, Malgorzata Gersdorf, has defied a new law that forces her into early retirement and has called on the European Union to defend her country’s judiciary from government interference.

Russian Strategic Bombers Deploy Near Alaska

The Russian military says that two nuclear-capable strategic bombers have flown to the easternmost Chukotka Peninsula, near Alaska, as part of an air force exercise.

The Russian Defense Ministry said that the Tu-160 bombers flew about 7,000 kilometers (4,350 Miles) from their home base near Saratov in southwestern Russia to Anadyr, on Chukotka, before returning to their home base. The ministry said the mission was the first time the bombers had flown to Chukotka, which faces Alaska across the Bering Strait.

The ministry said the air force exercise also involved the Tu-95 strategic bombers and tanker planes.

The Russian military has increased the intensity and scope of its drills amid strain in relations with the U.S. and its allies. The flight demonstrated that Russian bombers could be deployed close to the U.S.

In US Dispute, A Few Turks Destroy iPhones in Online Posts

A small number of Turks are responding to their president’s call to boycott American electronic goods by posting videos in which they smash iPhones with bats, hammers and other blunt instruments.

In one video , a man collects iPhones from several youths squatting in front of a Turkish flag, lays the devices on the ground and pounds them with a sledgehammer. “For the motherland!” he says at one point.

 

In another video, a boy pours a plastic bottle of Coca Cola into a toilet in a show of repugnance for U.S. goods.

 

American products remain widely used in Turkey, which is locked in a dispute with Washington over an American pastor being tried in a Turkish court and other issues. The two countries have also imposed tariffs on each other’s goods.

Government Leaders Call Italian Bridge Collapse Manslaughter

Rescuers continue their search for possible survivors and bodies of victims of Tuesday’s highway bridge collapse in Italy. The death toll is at 38, but authorities say some people are still unaccounted for and no one is prepared to call off the search and rescue operation. Hundreds of people have been evacuated from their homes near parts of the bridge that remained standing.

The city of Genoa’s chief prosecutor has said there may still be 10 to 20 people missing and not all the recovered bodies have been identified. Sniffer dogs and large earth-movers are being used to search around large chunks of concrete in the debris of the collapsed bridge. Family members of those unaccounted for still hope a miracle may have kept their loved ones alive.

 

Meanwhile, hundreds of people have been evacuated from homes near parts of the bridge left standing and were told they may never be able to go back to their homes. Authorities said the homes might have to be torn down, along with the remaining bridge, which will then be rebuilt.

Italian Prime Minister Giuseppe Conte met with Deputy Prime Ministers Matteo Salvini and Luigi di Maio, and the infrastructure minister, Danilo Toninelli, to take immediate measures following the disaster.

 

Conte declared a state of emergency for the northern port city of Genoa for 12-months and earmarked $5.6 million from national emergency funds for removal of the remaining parts of the bridge and re-developing the road system. He also said Italians would observe a national day of mourning Saturday when state funerals will be held for the victims.

The prime minister also announced the government has begun the process of revoking the contract of the company managing Italy’s highway system. The firm, Autostrade per l’Italia, said it carried out regular maintenance and safety checks on the bridge that gave reassuring results.

 

A criminal investigation has been launched to ascertain the cause of the collapse. Prosecutors are investigating negligence in maintenance and the bridge’s design.

Genoa chief prosecutor Francesco Cozzi said it is a disaster caused by human failure and those responsible will be liable for manslaughter.

 

Experts like Antonio Brencich, a professor of construction at Genoa University, had warned two years ago the bridge was in need of being replaced, but his message was not heeded. Since its completion in 1967, the number of vehicles and weight load on the bridge each day significantly increased.

 

Local residents had also long complained the bridge was unsafe.

 

Speaking on national television, this Genoa resident said it was an expected tragedy because every day she traveled on it she could feel it move. She added that there was always some repair going on. Even in recent days, workmen were busy on the bridge.

Experts: Cyberattacks Growing Increasingly Sophisticated

The rise of information sharing in the digital age has made it easier to disseminate knowledge, but it also brings with it heightened risks: from hackers stealing our information, to launching cyberwarfare and even potentially weaponizing legitimate platforms. This week on “Plugged In,” VOA Contributor Greta Van Susteren explores these challenges and how they are impacting global cybersecurity. VOA’s Elizabeth Cherneff has more.

Mexico Unsure If It Will Finish NAFTA Talks with US in Aug.

Mexico’s economy minister on Wednesday said that Mexico and the United States may not meet an August goal to finish bilateral talks to revamp the NAFTA trade deal, which is beset by disagreements over automobile trade rules and other issues.

Top Mexican officials started their fourth week of talks with U.S. Trade Representative Robert Lighthizer in Washington over a new North American Free Trade Agreement.

Asked if the August goal was still viable, Guajardo said, “That is why we are here. We are fully engaged. We don’t know if there will be a successful conclusion.”

The U.S.-Mexico talks resumed in July, without Canada, after negotiations involving all three members of the $1.2 trillion trade bloc stalled in June.

Guajardo said on Wednesday that he had spoken with Canadian Foreign Minister Chrystia Freeland on the telephone and was “hopeful” Canada could soon hold trilateral NAFTA talks with the United States and Mexico.

Guajardo was joined by Foreign Minister Luis Videgaray, Mexico’s chief NAFTA negotiator Kenneth Smith, and Jesus Seade, the designated chief trade negotiator of incoming Mexican President Andres Manuel Lopez Obrador.

Smith said Mexico and the United States were “working well” on the most difficult issues.

Mexico and Washington have been discussing rules for the automotive sector, which has been a major point of contention between the two countries.

The United States has sought tougher rules on what percentage of a vehicle’s components need to be built in the NAFTA region to avoid tariffs, as well as demanding that a certain number of cars and trucks be made in factories paying at least $16 an hour.

New sticking points emerged last week over President Donald Trump’s threat to impose steep automotive tariffs.

Guajardo said the teams had not yet touched the issue of a U.S. proposed sunset clause that would kill NAFTA after five years if it is not renegotiated again. Both Mexico and Canada have said they reject the measure.

White House: ‘We Won’t Forget’ How Turkey is Treating US Pastor

The U.S. continued to press Turkish President Recep Tayyip Erdogan to release detained American Pastor Andrew Brunson, after a Turkish court Wednesday rejected a second legal appeal to release him from house arrest. And Turkey is pushing back hard, sharply raising tariffs on a range of American goods in retaliation to the tariffs imposed last week by President Trump. VOA’s Diplomatic Correspondent Cindy Saine reports from the State Department on deteriorating relations with a U.S. NATO ally.