Turkey had ver busy two weeks from the diplomatic crisis with USA over Brunson case to a new 3 years long legal order which replaced 2 years long state of emergency.

The evangelical pastor Andrew Brunson was arrested in Turkey about 20 months ago in the aftermath of a 2016 coup attempt over terrorism charges for alleged links to the outlawed Kurdistan Workers’ Party, or PKK, as well as a network led by U.S.-based Muslim cleric Fethullah Gulen, whom Turkey blames for the coup attempt. Reports suggest that Andrew Craig Brunson, facing up to 35 years in prison has been the subject of diplomatic negotiations since his arrest. However, at the third court hearing last week, the court rejected Brunson’s lawyer’s request that he be freed pending the outcome of the trial and he was released to home arrest and the already delicate case became a diplomatic crisis. President Trump himself and the key figures of Trump Administration threatened Turkey via Twitter with sanctions unless it releases detained U.S. pastor Brunson. According to both American and Turkish media, The U.S. President Donald Trump and the Turkish President Tayyip Erdoğan made a deal during their conversation on July 11 in Brussels during the NATO Summit over the release of Brunson. The deal involved the release of a Turkish woman, Ebru Özkan who had been in jail in Israil in return of the release of Brunson. American media suggests that Özkan had been released and returned to Turkey, but Erdoğan had not kept his promise and threats via Twitter came just after this. Although, The State Department didn’t specify the type of sanctions the U.S. could impose on Turkey, or how soon the measures might be introduced, just after Trump and his administrations’ statements about using sanctions against Turkey, six US senators introduced a bipartisan legislation on July 19 to restrict loans from international financial institutions to Turkey “until the Turkish government ends the unjust detention of U.S. citizens”. As the problems of Turkish economy have been piling up and applying to IMF loans again has been becoming one of the strongest options to ease the economic problems, economic experts from Turkey assessed this attempt to restrict financial loans to Turkey over ‘pastor’ ruling can be very harmful to Turkish economy. As a matter of fact, Turkish Lira which had risen to 4.94 from 4.82 against dollar after the Central Bank’s unexpected decision of not to change interest rates a day before, first dropped down to 4.83 after the court’s home arrest decision, then it rose again near 4.90 level and stayed there. As Turkey’s firms have high foreign exchange debt, these moves in Dollar and Euro increases their fragility.

Turkish President Recep Tayyip Erdoğan stood behind the court’s decision and said that the US “will not intimidate Turkey,”, Erdoğan continued “You [the U.S] cannot make Turkey take a step back through sanctions,” in Zambia before returning to Ankara. Erdoğan says US conducting “psychological warfare” against Turkey. However, these statements from Erdoğan do not help much the fragile situation between Turkey and the USA as majority state-owned Turkish bank, Halk Bank’s executive Mehmet Hakan Atilla had been already convicted over helping Iran evade US sanctions in the US and it has been expected that Halk Bank will face high financial sanctions.

Opposition parties were disappointed by the snap election results and the results caused turmoil both in the main opposition party Republican People’s Party (CHP) and newly founded Good Party (İYİP). Dissidents in CHP, led by the Presidential Candidate of CHP Muharrem İnce, have been collecting signatures to force CHP leader Kılıçdaroğlu to hold congress for the party. İnce and his supporters blame Kılıçdaroğlu and his administration for the disappointed election results. While İnce secured 30% for presidential race, CHP just got 22.6% in the parliamentary elections. İYİP has been in discussion since the elections and is about to have a congress too. İYİP Leader Meral Akşener last week resigned her post, but then it was reported that she will run for the head of the party again in the coming congress. As opposition parties keep themselves busy with party politics, President Erdoğan and his government feel no pressure in the country for any real problem the country faces.

Although almost two-years long state of emergency imposed after a July 2016 failed military coup had been lifted after the elections as the President Erdoğan promised, a security law has been passed in the parliament made sure the new presidential government system could enjoy the similar power and privileges that the state of emergency offered for three years.

Turkey’s parliament on Wednesday passed a security law giving authorities broad counter-terrorism powers following the lifting of the two-year state of emergency imposed after a July 2016 failed military coup.

The regulations giving authorities broad counter-terrorism powers grant local governors the ability to ban public gatherings, extend detention periods and allow public servants’ dismissals without court decision if there are links to or contacts with terrorist organizations or other perceived threats to national security. The AKP figures say the new regulations are necessary to carry out a more effective fight against terrorism in the absence of state of emergency laws, whereas opposition members say it effectively extends the state of emergency for another three years. The CHP members of parliament called the new system that the law brings as a ‘civilian coup law’ both in an abstract and concrete manner.

The Central Bank’s decision of keeping its policy rate at 17.75 has been one of the main issues in the economic front. As rise in inflation rate came unexpectedly high, observers and investors had been expecting the Central Bank to increase interest rates high enough to keep real rates positive for foreign investors to finance the country’s very high current deficit. However, it seems that the central bank is also worrying about slowing down economy due to high interest rates. There are strong signs that Turkish economy will slow down in the second and third quarter and will shrink in the final quarter, implying a future stagflation given the ever increasing price levels. The economy had grown 7.3% in the first quarter, however, experts agree on that this was not a healthy growth and the government pushed the economy too much just to overcome the snap elections in April.