Published: Tue, July 10, 2018
Markets | By Otis Pena

Erdogan sworn in as Turkey's president with vast new powers


Erdogan's ruling Justice and Development Party (AKP) on Saturday nominated Yildirim as parliament speaker, an appointment likely to be rubber-stamped by the chamber on Thursday.

Recep Tayyip Erdoğan has been sworn in for another term as president of Turkey, inaugurating a new political system that grants the leader vast powers. Erdogan's re-election in the June 24 polls marked Turkey's transition to an executive presidential system of government, abolishing the prime minister's post, among other changes.

President Erdogan has packed his new cabinet with arch-loyalists including a family member, a childhood friend and an army chief who stood by him on the night of the coup attempt, in a clear sign that he intends to fully exercise the expanded powers handed to him under Turkey's reformed constitution. This was met with a minute-long standing ovation by his supporters, and seated silence from those who still oppose his power grab.

Earlier on Monday the lira briefly dropped more than 1 percent after a decree removed a clause stipulating a five-year term for the central bank governor. "With the power granted to us by the new presidential system, we will get quicker and stronger results". Erdogan has described the consolidation as a means to eliminate governmental inefficiency, and his base views his consolidation of authority as a deserved outcome for a leader who has instilled Islamic values in public life, according to Reuters.

He referred to the principles of Mustafa Kemal Ataturk, the founder of the modern Turkish Republic and vowed to "remain loyal to the rule of law, to the democratic and secular republic, and to Ataturk's principles and reforms". It later showed him visiting Ataturk's mausoleum in the capital, Ankara.

Reuters adds: After taking the oath of office in parliament, he addressed global leaders gathered at the presidential palace in Ankara.

"Most powers will be concentrated in his hands, there will no longer be a prime minister, and nearly none of the checks and balances of liberal democracies will be present. In other words, Turkey will be an institutionalized autocracy", former EU Ambassador to Turkey Marc Pierini said.

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Erdogan named his son-in-law Berat Albayrak as treasury and finance minister.

The Turkish president also kept Mevlut Cavusoglu in place as foreign minister and named Fuat Oktay, a former Turkish Airlines executive, as vice president. Erdoĝan has repeatedly clashed with strategic allies such as the United States and the European Union in recent years over the war in Syria, Turkey's accession to the EU, human rights abuses by Ankara, Europe's failure to support Turkey during the coup attempt, and rising Islamophobia in Europe.

The announcement - and the absence of familiar, market-friendly ministers from the cabinet - helped to send the lira sharply lower.

Investors are also keen for details on Erdogan's new economic team, which is expected to be announced later on Monday.

Erdogan faces economic problems such as high interest rates and inflation as well as a plunging currency that has lost 17 percent of its value against the dollar since the start of 2018.

After winning 52.9 percent of the vote in Turkey's presidential election two weeks ago, Erdogan was granted the ability to call additional elections, appoint judges without parliamentary approval, dissolve Parliament, and issue decrees that had previously been reserved for states of emergency.

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