Over the year, Deutsche Bank has been accused – and found guilty – of doing many illegal things (and paid handsomely for it, both in terms of penalties as well as sacked CEOs), but what happened yesterday was new.
As we observed yesterday morning, as part of his latest attack on currency speculators, Erdogan compared FX traders to terrorists, saying that “terrorists with dollars and with weapons have no difference.” Furthermore, on Thursday the government friendly daily Yeni Safak reported that Deutsche Bank and other German institutions were attempting “economic terror” against Turkey by recalling loans to companies before their their due dates.
The German lender was not happy, and on Friday Deutsche Bank’s Turkish unit rejected claims that it’s plotting to undermine the economy, and said it’s “unacceptable” for the lender’s name to be associated with terrorism.
“Claims in the story about calling loans before their maturity and conducting operations in coordination with other institutions are totally groundless,” the bank’s Istanbul-based business said in an e-mailed statement Friday quoted by Bloomberg.
Like many other failing regimes, most notably Venezuela, Erdogan and his aides often invoke a conspiracy against Turkey by outside powers when the lira declines, “saying other nations are jealous of the country’s economic growth under his leadership.” On Thursday, Erdogan accused Turkey’s enemies of speculating in the lira and again called on Turks to “thwart these games” by selling their holdings in other currencies.
Meanwhile, the one thing that could prop up the crashing currency, a rate hike, has been virtually proihibted by Erdogan who has warned that any such action by the central bank will be rejected by his administration. Erdogan is hoping to boost the lagging economy with cheap loans, however in the process it has sent the currency plunging.
Thursday was not the first time that Deutsche Bank has been singled out by the Turkish press. In January 2014, the German lender denied local reports that it deliberately drove down shares of a Turkish state-run lender that had been implicated in a corruption scandal. Deutsche Bank said most of the shares it processed in that episode were owned by its clients, and it wasn’t trading sufficient volumes to affect the company’s share price. More recently, the Frankfurt-based institution figured in a different way in government rhetoric.
In an amusing interlude, last September, when Deutsche Bank’s shares were plunging, amid capital concerns, Yigit Bulut, a chief adviser to Erdogan, said Turkey should consider buying Deutsche Bank.
“Some very good companies in the EU are going to fall into trouble and we need to be ready to buy a controlling stake in them,” Bulut wrote on Twitter. “Wouldn’t you be happy to make Germany’s biggest bank into a Turkish Bank!!”
As Bloomberg adds, Bulut also criticized Germany’s flagship carrier, Deutsche Lufthansa AG, soon after his appointment in 2013. He said the airline was behind anti-government protests that began in Istanbul’s Gezi Park that summer, because its position in Europe was threatened by plans to build a new airport in Istanbul.
Deutsche Bank, which has been in Turkey since 1987, employs 143 people at its Turkish unit. In the next TRY crisis, it is a distinct possibility many if not all could be arrested on allegations they are conspiring to take down Erdogan, whose authoritarian ways have been mostly ignored by the country’s western friends and allies.
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