Syria.....
The Turkish currency weakened to 2.1195 by 0712 GMT against the dollar from 2.0975 late on Thursday, while bond yields rose.
Moody's said one of the two drivers prompting the change in outlook was increased pressure on the country's external financing position driven by "heightened political uncertainty and lower global liquidity."
The Turkish economy's Achilles' heel has long been its large current account deficit. According to data announced on Friday, the gap narrowed to $3.19 billion in February from $4.93 billion a month earlier, slightly above a Reuters poll forecast for a deficit of $3.05 billion.
Given a slowing near-term outlook for economic growth and a more uncertain policy environment, prospects for growth-enhancing structural reforms might be diminished, the rating agency added.
A corruption scandal that broke out in December has presented Prime Minister Tayyip Erdoğan's government with its biggest during its 12 years in power.
But his AK Party won local elections on March 30, prompting a rally on markets that viewed the outcome as having decreased political uncertainty.
Erdoğan's response to the corruption inquiry - purging thousands of officers from the police force and reassigning hundreds of prosecutors and judges - has raised concern in Western capitals, including Brussels, which fears the EU candidate nation is moving further away from European norms.
"Moody's expects these tensions in the political arena to persist until at least the second quarter of 2015, when parliamentary elections are due," the report said.
Noting the drop in the lira that followed the Moody's revision, Erkin Işık, strategist at TEB, wrote that recent easing of liquidity conditions by the central bank and the subsequent fall in interbank rates had also left the currency vulnerable.
Criticism by Erdoğan last week of the central bank also caused concern for investors as they questioned political interference in the bank's policy.
Bank governor Erdem Başçı hinted at interest rate cuts on Monday for the first time in a year, three days after Erdoğan called for a rate cut.
"Given the financial turbulences that Turkey experienced in recent months as well as the apparent risks on the economic outlook, the Moody's decision is not surprising," analysts at Finansbank said in a research note.
"Furthermore, a downgrade seems also possible if the conditions leading to this decision exacerbate in the future."
Turkey's two-year benchmark yield climbed 20 basis points to 10.03 percent by 0722 GMT, from 9.83 percent on Thursday.
Control of the NATO member's security apparatus goes to the heart of a feud between Erdoğan and Islamic cleric Fethullah Gülen, a former ally based in the United States.
Erdoğan accuses Gülen's Hizmet ("Service") network of orchestrating a plot to unseat him, tapping thousands of phones, including his own, over years and using leaked recordings to unleash corruption allegations against his inner circle in the run-up to a series of elections. Gülen denies involvement.
According to an initial draft, seen by Reuters, proposals before parliament include giving the National Intelligence Organisation (MİT) more scope for eavesdropping and foreign operations, as well as greater immunity from prosecution for top agents.
The MİT is run by Hakan Fidan, one of Erdoğan's closest confidantes, who was himself the subject of an inquiry in February 2012 seen by the prime minister's circle as a challenge to his authority from judiciary.
Deputy Prime Minister Beiir Atalay said the priority was to update existing laws which were decades out of date and to bring Turkey's spy agency in line with international peers.
"As with Western examples, the aim is to make the legislation more transparent and bestow the agency with a greater range of options," he told parliament.
"With this draft law, the MİT's activities regarding foreign security, national defence, the struggle against terrorism, counter-intelligence and cyber crime will be intensified."
Erdoğan's AK party has a large majority in parliament.
Erdoğan's response to the corruption inquiry - purging thousands of officers from the police force and reassigning hundreds of prosecutors and judges - has raised concern in Western capitals, including Brussels, which fears the EU candidate nation is moving further away from European norms.
"Events over the past three months have cast doubt on Turkey's comMİTment to European values and standards," EU enlargement commissioner Stefan Fuele said, citing tightened control of the judiciary and "massive transfers" of police and prosecutors as part of Erdoğan's purging of the bodies.
Erdoğan's aides says such criticism underestimates the level of threat to national security from what they describe as a "parallel state" seeking to sabotage his government and thwart his ambition to stand in presidential elections in August.
The latest of the leaked recordings, posted on YouTube days ahead of March 30 local polls which were seen as a referendum on Erdoğan's rule, was of a meeting between Fidan, Foreign Minister Ahmet Davutoglu and the deputy head of the armed forces discussing a possible military operation in Syria.
It was by far the most damaging security leak in the months-old scandal and access to YouTube has been blocked since then. The BTK telecoms regulator said on Thursday it would not end the ban despite court rulings that it should do so.
Senior officials have said Turkey will launch a criminal investigation into the alleged "parallel state" backed by Gülen, a crackdown likely to be led by the MİT. Nine police officers were detained in the southern city of Adana on Wednesday in connection with an inquiry into wiretapping, local media said.
"If the (Gülen) movement is very well represented in the police and the judiciary, you have to have someone to go after them, and it seems it will be the MİT, that seems to be the logic behind this," said Svante Cornell, Turkey expert at the Johns Hopkins School of Advanced International Studies.
The draft bill, which could be amended during debate, seeks to impose strict jail terms for the publication of leaked classified documents and protect the intelligence chief from prosecution by all but the country's highest court of appeal.
"This law is equipping MİT with authorities it should not have in a state of law. These authorities will turn Turkey into an intelligence state," said Sezgin Tanrıkulu, a deputy from the main opposition CHP party.
"Under this law, it will become impossible to launch inquiries into all illegal activities conducted by MİT in the past and the future," he told a news conference, citing controversy over the agency's recent alleged role in blocking an investigation into shipments of supplies to Syria.
Local media said the MİT had intervened to prevent gendarmerie officers from searching trucks in the southern province of Adana in January which prosecutors suspected of carrying weapons to Syrian rebel groups.
The MİT has not commented on the reports but government officials have said the trucks were carrying aid.
The agency has played a critical role in peace talks with Kurdish militants, an effort to end an insurgency in Turkey's southeast which has cost 40,000 lives over three decades and hobbled the development of one of its poorest regions.
"The role it played in running the Kurdish peace process gave Erdoğan and the MİT some credibility with Western allies," said the John Hopkins School's Cornell. "What you've seen is that with Syria policy, MİT has played a very significant role, and a very murky role. In general there has been increasing concern about the role MİT has been playing."
The Gölbaşı Criminal Court of Peace blocked nationwide access to YouTube via a ruling on March 27, but reversed its ruling on April 4 following an appeal. However, despite the court decision, the BTK insisted on blocking the entire website instead of the pages of the 15 videos.
In its statement, the BTK said the court ruling requests that certain videos be removed by YouTube and if the company fails to do so, access to entire website will be blocked by the telecommunication authorities. It added that those 15 videos include libelous content against Atatürk, which is criminalized in Turkey.
Turkey banned access to YouTube after a leaked meeting between top security officials made its way to the video-sharing website. The Telecommunications Directorate (TİB) cited a March 27 ruling from the Gölbaşı Criminal Court of Peace in doing so.
Following a Constitutional Court ruling on Thursday that blocking access to Twitter is a violation of free speech, the Gölbaşı court on Friday changed its ruling, this time ordering only a block on access to 15 videos on YouTube instead of the entire site. The court offered a self-criticism in its latest ruling, saying its earlier ruling was a “major intervention into freedom of speech, a fundamental value of a democratic society.”
The court notified both the TİB and the BTK, which should have then lifted the ban, but did not.
In the recording that reportedly caused the ban on YouTube, Foreign Minister Ahmet Davutoğlu, National Intelligence Organization (MİT) Undersecretary Hakan Fidan, Foreign Ministry Undersecretary Feridun Sinirlioğlu and Deputy Chief of General Staff Gen. Yaşar Güler can be heard discussing a possible intervention in Syria and potential responses from the international community.
51 Killed as al-Qaeda Fights al-Qaeda on Syria-Iraq Border
Factions Clash Over Oil-Rich Border City
by Jason Ditz, April 10, 2014
Major fighting erupted in the oil-rich city of Bukamal, in Syria’s Deir Ezzor Province, as al-Qaeda in Iraq (AQI) attempted to wrest control from its rival al-Qaeda faction, Jabhat al-Nusra.
The city is doubly valuable for rebel factions, as it is both a source of oil revenue for its occupier and has a border with Iraq’s Anbar Province, a particularly big incentive for AQI, which presently controls much of Anbar as well.
At least 51 people have been reported killed so far as AQI has gained considerable ground. Nusra fighters have reportedly requested reinforcements in an attempt to keep the city.
AQI and Jabhat al-Nusra have been openly warring for months, since al-Qaeda’s parent organization disavowed AQI as too brutal for their taste, and endorsed Nusra as their official Syria affiliate. Despite losing their imprimatur, AQI has continued to control much more territory and seems to be the stronger of the two factions.
Iraq.......
Bombs, Gunmen Kill 78, Wound 123 Across Iraq
by Margaret Griffis, April 10, 2014
At least 78 people were killed and 123 were wounded today across Iraq. Baghdad was subjected to bombings again, while Anbar suffered from shelling and clashes. Scattered violence occurred elsewhere.
Officials at the North Oil Company have no faith that a very important oil pipeline will be functioning sometime next week as promised. The Kirkuk-Ceyhan pipelinenormally carries oil for the foreign markets to Turkey, but it has been inoperative since March 2 when militants began a sustained attack on it. Usually, repairs made to the pipeline take only hours or days, but the surge of militants in northern Iraq has kept repair crews away from the pipeline at this time.
Heavy fighting on the Syrian side of the border near Qaim forced Iraqi troops to raise blast walls and sand berms for their own protection. The rebels may be seeking controlof oil resources.
Anbar:
In Ramadi, a clash left four gunmen dead and two policemen wounded after policemen stumbled across a hideout during a routine search. At least two more militants were killed. A policeman was shot dead. Shelling displaced a number of families.
Artillery fire killed six people and wounded 24 more across Falluja. A school wasdamaged. Clashes left nine militants dead and 11 hurt.
A roadside bomb in Abu Ghraib killed one soldier and wounded three others.
Five militants were killed and two more wounded in Jighaifi.
Clashes took place in Alsger and Garma.
Elsewhere:
An evening bomb in Sadr City killed 11 and wounded 21 more.
In Baghdad, seven people were killed and 39 more were wounded in a blast in Amin. A bomb in the Amin II neighborhood killed two people and wounded 10 more. Gunmen killed a civilian in Sabi al-Bour.
In Mosul, gunmen killed female teacher. Gunmen killed two policemen. Two more policemen were gunned down separately. An I.E.D. killed an FPS patrolman and wounded three others. Gunmen killed two civilians.
Militants in Boudjah killed eight people and set their homes and a mosque on fire.
In Yathrib, a roadside bomb killed a farmer and three children.
The bodies of two women and a child were discovered in a rural area of Hamza al-Gharbi.
Gunmen killed a policeman and wounded three more in Saniya.
One soldier was killed and two more were wounded in a blast in Ain al-Gahesh.
A civilian was killed and his wife was wounded in a shooting in Udhaim.
In Hamrin, gunmen killed a policeman.
A policeman was beheaded during a home invasion in Dour.
In Baquba, gunmen killed an army captain.
In Tikrit, gunmen wounded three relatives of the former dean of the University of Tikrit as they were posting election leaflets.
Iraqi Sunni Political Alliance Aims to Stop Maliki’s Reelection
Eyes Kurdistan-Style Autonomy in Anbar Province
by Jason Ditz, April 10, 2014
Meeting in the Kurdistan Regional Government’s (KRG) capital of Irbil, Sunni politicians announced the creation of the “Dignity Alliance,” a Sunni political bloc that aims to court both Sunni Arabs and Kurds in an attempt to stop the reelection of Prime Minister Nouri al-Maliki.
Businessman Khamis Khanjar, one of the alliance leaders, said it was a response to the Sunni protests in Anbar Province and the crackdown by the Maliki government, saying they intend to run MP Ahmed Alwani’s reelection campaign. Alwani was ordered arrested by Maliki as a “terrorist,” leading to mass resignations of Sunni politicians.
The idea of a “stop Maliki” alliance is not new, as the Iraqiya bloc essentially won the last election with such a stance, courting Sunni Arabs and secular Shi’ites. Their victory was short-lived, as the US pressed them into accepting a “power-sharing” deal that kept Maliki in power, and none of the sharing ever ended up happening.
The Dignity Alliance faces an uphill battle in Anbar, despite its overwhelming Sunni majority, as the Independent High Election Commission (IHEC) has announced much of the province is too unstable to be allowed to vote at all.
The alliance is also pushing the idea of forming a Kurdistan-style autonomous region out of Anbar Province, saying they hope to copy Kurdistan’s stability and prosperity, noting the status quo has left Anbar a war-torn mess.
Turkey.......
Moody's changes Turkey's outlook to negative, lira weakens
(PHOTO: REUTERS)
11 April 2014, Friday /REUTERS, İSTANBUL
Moody's cut the outlook on Turkey's sovereign rating to negative on Friday, citing political turbulence, increased external financing pressure and weaker growth prospects, triggering losses in the lira.
Moody's said one of the two drivers prompting the change in outlook was increased pressure on the country's external financing position driven by "heightened political uncertainty and lower global liquidity."
The Turkish economy's Achilles' heel has long been its large current account deficit. According to data announced on Friday, the gap narrowed to $3.19 billion in February from $4.93 billion a month earlier, slightly above a Reuters poll forecast for a deficit of $3.05 billion.
Given a slowing near-term outlook for economic growth and a more uncertain policy environment, prospects for growth-enhancing structural reforms might be diminished, the rating agency added.
A corruption scandal that broke out in December has presented Prime Minister Tayyip Erdoğan's government with its biggest during its 12 years in power.
But his AK Party won local elections on March 30, prompting a rally on markets that viewed the outcome as having decreased political uncertainty.
Erdoğan's response to the corruption inquiry - purging thousands of officers from the police force and reassigning hundreds of prosecutors and judges - has raised concern in Western capitals, including Brussels, which fears the EU candidate nation is moving further away from European norms.
"Moody's expects these tensions in the political arena to persist until at least the second quarter of 2015, when parliamentary elections are due," the report said.
Noting the drop in the lira that followed the Moody's revision, Erkin Işık, strategist at TEB, wrote that recent easing of liquidity conditions by the central bank and the subsequent fall in interbank rates had also left the currency vulnerable.
Criticism by Erdoğan last week of the central bank also caused concern for investors as they questioned political interference in the bank's policy.
Bank governor Erdem Başçı hinted at interest rate cuts on Monday for the first time in a year, three days after Erdoğan called for a rate cut.
"Given the financial turbulences that Turkey experienced in recent months as well as the apparent risks on the economic outlook, the Moody's decision is not surprising," analysts at Finansbank said in a research note.
"Furthermore, a downgrade seems also possible if the conditions leading to this decision exacerbate in the future."
Turkey's two-year benchmark yield climbed 20 basis points to 10.03 percent by 0722 GMT, from 9.83 percent on Thursday.
Turkey seeks wider spy agency powers amid corruption scandal
10 April 2014, Thursday /ANKARA, TODAY'S ZAMAN WITH REUTERS
Turkey's government sought parliamentary approval to boost the powers of the secret service on Thursday, a move seen by Prime Minister Recep Tayyip Erdoğan's critics as a bid to tighten his grip on the apparatus of state as he battles a sweeping corruption scandal.
Erdoğan accuses Gülen's Hizmet ("Service") network of orchestrating a plot to unseat him, tapping thousands of phones, including his own, over years and using leaked recordings to unleash corruption allegations against his inner circle in the run-up to a series of elections. Gülen denies involvement.
According to an initial draft, seen by Reuters, proposals before parliament include giving the National Intelligence Organisation (MİT) more scope for eavesdropping and foreign operations, as well as greater immunity from prosecution for top agents.
The MİT is run by Hakan Fidan, one of Erdoğan's closest confidantes, who was himself the subject of an inquiry in February 2012 seen by the prime minister's circle as a challenge to his authority from judiciary.
Deputy Prime Minister Beiir Atalay said the priority was to update existing laws which were decades out of date and to bring Turkey's spy agency in line with international peers.
"As with Western examples, the aim is to make the legislation more transparent and bestow the agency with a greater range of options," he told parliament.
"With this draft law, the MİT's activities regarding foreign security, national defence, the struggle against terrorism, counter-intelligence and cyber crime will be intensified."
Erdoğan's AK party has a large majority in parliament.
Erdoğan's response to the corruption inquiry - purging thousands of officers from the police force and reassigning hundreds of prosecutors and judges - has raised concern in Western capitals, including Brussels, which fears the EU candidate nation is moving further away from European norms.
"Events over the past three months have cast doubt on Turkey's comMİTment to European values and standards," EU enlargement commissioner Stefan Fuele said, citing tightened control of the judiciary and "massive transfers" of police and prosecutors as part of Erdoğan's purging of the bodies.
Erdoğan's aides says such criticism underestimates the level of threat to national security from what they describe as a "parallel state" seeking to sabotage his government and thwart his ambition to stand in presidential elections in August.
The latest of the leaked recordings, posted on YouTube days ahead of March 30 local polls which were seen as a referendum on Erdoğan's rule, was of a meeting between Fidan, Foreign Minister Ahmet Davutoglu and the deputy head of the armed forces discussing a possible military operation in Syria.
It was by far the most damaging security leak in the months-old scandal and access to YouTube has been blocked since then. The BTK telecoms regulator said on Thursday it would not end the ban despite court rulings that it should do so.
"Intelligence state"
Declaring victory after his AK Party dominated the electoral map in the municipal polls despite the corruption scandal, Erdoğan said he would "enter the lair" of enemies who accused him of graft and leaked state secrets.Senior officials have said Turkey will launch a criminal investigation into the alleged "parallel state" backed by Gülen, a crackdown likely to be led by the MİT. Nine police officers were detained in the southern city of Adana on Wednesday in connection with an inquiry into wiretapping, local media said.
"If the (Gülen) movement is very well represented in the police and the judiciary, you have to have someone to go after them, and it seems it will be the MİT, that seems to be the logic behind this," said Svante Cornell, Turkey expert at the Johns Hopkins School of Advanced International Studies.
The draft bill, which could be amended during debate, seeks to impose strict jail terms for the publication of leaked classified documents and protect the intelligence chief from prosecution by all but the country's highest court of appeal.
"This law is equipping MİT with authorities it should not have in a state of law. These authorities will turn Turkey into an intelligence state," said Sezgin Tanrıkulu, a deputy from the main opposition CHP party.
"Under this law, it will become impossible to launch inquiries into all illegal activities conducted by MİT in the past and the future," he told a news conference, citing controversy over the agency's recent alleged role in blocking an investigation into shipments of supplies to Syria.
Local media said the MİT had intervened to prevent gendarmerie officers from searching trucks in the southern province of Adana in January which prosecutors suspected of carrying weapons to Syrian rebel groups.
The MİT has not commented on the reports but government officials have said the trucks were carrying aid.
The agency has played a critical role in peace talks with Kurdish militants, an effort to end an insurgency in Turkey's southeast which has cost 40,000 lives over three decades and hobbled the development of one of its poorest regions.
"The role it played in running the Kurdish peace process gave Erdoğan and the MİT some credibility with Western allies," said the John Hopkins School's Cornell. "What you've seen is that with Syria policy, MİT has played a very significant role, and a very murky role. In general there has been increasing concern about the role MİT has been playing."
Despite court ruling, Turkish authorities continue to block YouTube
(IMAGE COURTESY YOUTUBE)
10 April 2014, Thursday /TODAYSZAMAN.COM, İSTANBUL
The Information Technologies and Communications Authority (BTK) released a statement on Wednesday at midnight, stating that it will continue to block access to popular video-sharing website YouTube as the site had not removed 15 videos as a Turkish court had requested, including those insulting Mustafa Kemal Atatürk, the founder of modern Turkey.
In its statement, the BTK said the court ruling requests that certain videos be removed by YouTube and if the company fails to do so, access to entire website will be blocked by the telecommunication authorities. It added that those 15 videos include libelous content against Atatürk, which is criminalized in Turkey.
Turkey banned access to YouTube after a leaked meeting between top security officials made its way to the video-sharing website. The Telecommunications Directorate (TİB) cited a March 27 ruling from the Gölbaşı Criminal Court of Peace in doing so.
Following a Constitutional Court ruling on Thursday that blocking access to Twitter is a violation of free speech, the Gölbaşı court on Friday changed its ruling, this time ordering only a block on access to 15 videos on YouTube instead of the entire site. The court offered a self-criticism in its latest ruling, saying its earlier ruling was a “major intervention into freedom of speech, a fundamental value of a democratic society.”
The court notified both the TİB and the BTK, which should have then lifted the ban, but did not.
In the recording that reportedly caused the ban on YouTube, Foreign Minister Ahmet Davutoğlu, National Intelligence Organization (MİT) Undersecretary Hakan Fidan, Foreign Ministry Undersecretary Feridun Sinirlioğlu and Deputy Chief of General Staff Gen. Yaşar Güler can be heard discussing a possible intervention in Syria and potential responses from the international community.
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