Turkey's currency crash continues amid backlash against Erdogan's 'treacherous' Istanbul mayoral election re-run

Tyler Durden
Zero Hedge
Tue, 07 May 2019 08:23 UTC

The Turkish lira continued its collapse this morning as investors interpreted Turkey's decision to redo Istanbul's municipal vote as yet another manifestation of President Recep Tayyip Erdogan's influence over independent institutions.

As Bloomberg notes, the decision drew instant condemnation from the opposition and some European officials.

The European Union called for Turkey's election body to explain its reasons for the re-run "without delay".

"Ensuring a free, fair and transparent election process is essential to any democracy and is at the heart of the European Union's relations with Turkey," the EU's diplomatic chief, Federica Mogherini, said in a statement.

Germany's Foreign Minister Heiko Maas said the decision was "not transparent, and incomprehensible to us".

The French government also said the Turkish authorities needed to show "respect for democratic principles, pluralism, fairness [and] transparency" in the new poll.

It also raised investor concern that the nation's recession-mired economy now faces an extended period of political turmoil.

"Turkey has had fair and free elections since 1950," Soner Cagaptay, the director of the Turkish Research Program at the Washington Institute for Near East Policy, said on Twitter.

The "decision to reverse the March 31 Istanbul mayoral race, in which the governing party lost, is the book end of a historic era. Until now, it was one man, one vote, from now on it is: vote until the governing party wins."

Protests have erupted across Istanbul over Erdogan's decision to re-run the election...

The reaction is clear, sell Lira first...

Finally, to those daring to short the Lira (and Turkish stocks), strongman Erdogan has a message:

"Whatever we did to the terrorists threatening our borders, we will do the same" to those who are trying to sabotage our economy.

Be careful what you write analysts.

Comment: It's no secret that the US and its Western lackeys would be happy to have Erdogan gone but whether that's partly influencing the current unrest remains to be seen. After all, it's fairly common place for the EU to force a re-vote on its citizens, or to ignore them entirely, if they give the 'wrong answer'. As noted in Different when we do it: Why re-voting is 'dictatorship' in Turkey but 'unity' in EU:

France voted 'no' to accepting a proposed 'EU Constitution' by 54.9 percent in 2005, but the outcome was ignored. The same thing happened in the Netherlands, which rejected it by 61.5 percent. The 'EU Constitution' was later repackaged into the Lisbon Treaty and presented to the French parliament where it was adopted, without being put to the people this time (much easier!).

[...]

Greece voted overwhelmingly to reject severe austerity measures desired by the EU in 2015 in exchange for a multi-billion euro bailout. Not long after, under pressure from Brussels, the country's government agreed to implement even harsher methods - totally ignoring the will of the Greek people.[...]

Then there's Catalonia, where pro-independence leaders were thrown in jail for their role in holding an independence referendum in 2017.

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