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HomeHeadlineGaye Erkan Resigns as Central Bank Head Amid Controversies

Gaye Erkan Resigns as Central Bank Head Amid Controversies

M. Ahmet Karabay

Hafize Gaye Erkan resigned from her position as the Head of the Central Bank, and she was replaced the same night by her assistant, Fatih Karahan. Erkan’s resignation was not a surprise, but Karahan’s appointment was somewhat unexpected for those who hoped Cevdet Akçay would be appointed. Let’s look together at the reasons behind Erkan’s appointment and the controversial aspects of her departure.

Those who follow this column will remember. Before any claims about her family were made in the media, on January 11, I ended my article titled “The pro-government media set a trap for Gaye Erkan” with “You can start guessing whether Gaye Erkan will pack her bags before or after the election.”

It was Mehmet Şimşek, the Minister of Treasury and Finance, who requested President Tayyip Erdoğan to appoint Gaye Erkan as the head of the Central Bank after the elections on May 28. The two financiers, one from the USA and the other from the UK, knew each other from international meetings and had interactions.

Seeing that the remote-controlled interest policy disconnected from the markets was not working, Erdoğan had to return to orthodox economic policies, leaving Mehmet Şimşek as the only alternative. Therefore, he had to accept Şimşek and the names he would bring from the international markets.

THE CHILD FROM HER BOYFRIEND

Tayyip Erdoğan was told that Gaye Erkan was single and never married. This information was not incorrect. However, when it was learned that she had a child from her boyfriend, the perspective of Beştepe Palace on Erkan changed rapidly. Unable to tolerate this “immoral” situation, prince Bilal Erdoğan intervened, and manipulation began through Yusuf Kenan Bağır, the bank’s General Director of Data Governance and Statistics.

Everyone was aware of the power behind the reappointment of Yusuf Kenan Bağır, a friend of Bilal Erdoğan from Kartal Imam Hatip, two days after his dismissal. The mistakes made by her father, Erol Erkan, facilitated the work of Bilal Erdoğan’s team.

Gaye Erkan was put in a deadlock after the dismissal of bank employee Büşra Bozkurt and her subsequent application to CIMER, which was announced to the public through Sözcü Newspaper. The fatal blow to Erkan came from Mehmet Şimşek. Despite various allegations about the Central Bank President, Şimşek only denied the claims that “The news was circulated by the Mehmet Şimşek group.”

By reading between the lines, it was understood that the countdown to dismissal had started.

RESIGNATION OR DISMISSAL?

Gaye Erkan resigned yesterday after the markets in Turkey closed, stating that she had “been the victim of a major assassination of character” and that “To prevent my family and especially my innocent child, who is not even one and a half years old, from being affected any further, I have requested my dismissal from the honorable duty I have carried out since the first day from our President.”

In her statement, Erkan mentioned that she resigned on her own will and announced her resignation as a version of “requesting dismissal” common in the AK Party era. However, the Presidential Decree on the new appointment stated that she was “dismissed.”

Some circles considered this seemingly contradictory situation normal, arguing that “A bureaucrat who says ‘I request dismissal from my duty’ gets dismissed. There is nothing abnormal about it!” However, the situation is not that simple. When Berat Albayrak announced his resignation on Instagram and was replaced by Lütfi Elvan, it was said that his “request for dismissal was accepted.”

ALİ BABACAN EXPLAINED THE SITUATION BEST

There were many comments on social media about the resignation of the Central Bank President. The humorous approach of DEVA Party leader Ali Babacan was the best description of the situation in Turkey. Babacan responded to a news article titled “The Central Bank President has resigned” with “Did Recep Tayyip Erdoğan resign?”

The real problem is exactly this. After Turkey switched to a ‘One-Man’ regime, no Central Bank President could last. There was economic stability during the times when Süreyya Serdengeçti, Durmuş Yılmaz, and Erdem Başçı each served for 5 years, and the Central Bank was independent.

The dismissal of Murat Çetinkaya for doing what was necessary for the economy marked a turning point, despite warnings to Erdoğan not to interfere with the Central Bank’s presidency system. Erdoğan’s announcement that Çetinkaya was dismissed for “not listening” was a turning point in the economy.

ŞIMŞEK’S GUARANTEE THAT ‘SOMEONE CLOSE TO ERDOĞAN WILL NOT COME’

After Erkan’s resignation, Mehmet Şimşek posted in both Turkish and English, wishing success to the newly appointed president and his team. His English statement hinted at who it would be, stating, “The new president, a highly respected macroeconomist with extraordinary knowledge and expertise, will be appointed based on my recommendation.”

This statement reflects a painful reality for Turkey. Şimşek was telling the markets, “Don’t worry. Someone who will continue the current policies is coming. It won’t be someone close to Erdoğan.”

Remember, the Central Bank announced at its last meeting that it was ending the interest rate hike by increasing the policy rate to 45%. Thus, someone who insisted on raising interest rates left the Central Bank. The new president will be starting with a clean slate.

However, it doesn’t matter who is appointed as the head of the Central Bank in Turkey. There is no independent Central Bank, just a money printing mechanism led by Erdoğan. Presidents are being spent like loose change, regardless of who they are.

A French cartoonist best depicted Turkey’s real problem. The things held in the right hand are so heavy that the left hand, holding onto Turkey, is pulling it down to the bottom of the water.

NO FLUCTUATIONS IN THE MARKET

In the 8 years since Erdem Başçı’s departure, Turkey has seen 7 Central Bank presidents. The supposed political stability has never reflected on the Central Bank, where it is most needed.

“Don’t misunderstand the ‘No fluctuations!’ statement. The current stability in instability will continue. The changes in the last three presidents were related to monetary policies. Someone had to pay the price for Erdoğan’s fluctuations, and the previous ones were removed for this reason. These dismissals had financial consequences.

Gaye Erkan’s departure is due to personal reasons and was expected for some time. Therefore, it’s unlikely to have a lasting impact. In fact, Erkan’s departure might even help improve the tarnished image of the Central Bank. What matters is the continuation of the implementation of the program, not the individuals.

There’s no need to feel sorry for Gaye Erkan for having to move in with her mother because she couldn’t find a rental apartment. She will continue to receive her salary of 268,000 TL for two years. Erdoğan prepared this infrastructure last year before the elections, just in case, to protect his allies.

In summary, it was Mehmet Şimşek who called for Gaye Erkan’s resignation. It was also him who recommended Fatih Karahan to Erdoğan for the new presidency. Hafize Gaye Erkan was Turkey’s first female Central Bank president. She was also the first to resign over personal scandals.

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