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He was finance minister before – with a good reputation. But what does President Erdogan concede to him in the fight against the crisis?
Despite his election victory, President Recep Tayyip Erdogan has only appointed two of the 18 previous ministers to his new cabinet. On the one hand his health minister and personal physician Fahrettin Koca and tourism minister Nuri Ersoy.
Unlike the other previous cabinet members, neither of them was elected to the new parliament. This is significant in that a double mandate is not possible and they would not be filled as AKP deputies in parliament and would therefore be absent, as ARD correspondent Karin Senz explains in Istanbul.
Simsek should bring it
However, the most important new addition to the government is Mehmet Simsek. The respected and Western-oriented economist was Finance Minister from 2009 to 2028 and then Economy Minister. The name Simsek alone is said to move a lot. Financial investors regard it as a guarantor of good economic policy and have always emphasized the independence of the central bank. Now he should stand for a change in Turkey’s economic and financial policy and create trust.
Legend:
Mehmet Simsek: Erdogan actually wanted to get him on the team in March in the middle of the election campaign. But he canceled at the time, probably also with a view to his good reputation. After the victory of the AKP, he now agreed.
Keystone/EPO
The challenges are huge. Already at the weekend after the swearing-in, Simsek announced that he wanted to return to a “rational basis” for economic and financial policy. Fighting inflation is a priority. That sounds like criticism of the past. Because under Erdogan, the central bank continued to lower interest rates instead of raising them, despite extremely high inflation. “Interest enemy” Erdogan wanted to use cheap money to boost the economy.
Inflation – Reconstruction – Syrian Refugees
In addition to fighting inflation as a top priority, Simsek made other promises that the markets are very happy to hear and that were missed by international financial policy in Turkey: accountability, transparency and budgetary discipline. Inflation is officially 44 percent, according to an independent commission of experts it is more likely to be twice as high or even higher.
In addition, there is the reconstruction after the earthquake, which is expected to cost a hundred billion euros. The big issue in the election campaign was the Syrian refugees who are to be sent back to Syria. Other campaign promises related to minimum wages and pensions.
What will Simsek be able to do?
Now it is a question of Simsek addressing the many different points, above all inflation, says ARD correspondent Senz. After the run-off election at the end of May, the price of gas continued to rise and annoyed people. The local elections, which are also important, are due next year.
Whether Simsek can bring solutions and the lira is allowed to run its natural course again depends on how much freedom Erdogan gives him, Senz estimates: “Simsek also resigned in 2018 because he obviously couldn’t move as freely as he wanted .»