You have frequently read in this column that economics and politics are inseparable. When economics guides politics, things fall into place, but when politics tries to dictate economics, it leads to a dead end. Mehmet Şimşek, who holds the position of Minister of Treasury and Finance, has made so many consecutive mistakes in recent weeks that even President Tayyip Erdoğan, whose word is final, seems to have lost his last bit of confidence in him.
Şimşek’s biggest mistake was accepting the position again on June 4, 2023, after stepping down on November 24, 2015, when he was accused of theft and defrauding the state. The 50 million dollars he was promised must have been irresistible, as he agreed to return to the role, even though nothing had changed in the attitude of the person at the top.
Last year, the parliament was renewed, the cabinet changed, but the resident of Beştepe (Presidential Palace) remained the same. He should have been the first one to go, yet as long as everything depends on his signature, no other change really matters.
Mehmet Şimşek was appointed as the head of Turkey’s treasury as a technocrat and representative of global capital. President Erdoğan, who has spent the state’s past savings and mortgaged its present and future, needed new loans, so he had to accept Şimşek’s appointment as a representative of Western capital.
FROM RATIONAL POLICY TO PALACE-DRIVEN POLITICS
Mehmet Şimşek took on the role, stating that “Turkey has no choice but to return to rationality.” In the beginning, he followed rational principles. However, during that time, there was no sign of support from Beştepe Palace.
As Şimşek, who had been captivated by the allure of politics, tried to ingratiate himself with Beştepe Palace, he began to act more like a politician and less like a technocrat. Over time, as he followed the path set by the palace, support from Erdoğan started to come.
TAX UNDER THE GUISE OF ‘ISRAEL’ RHETORIC
In 2006, Israel, which has sustained itself by subduing neighboring countries, was stopped for the first time by Hezbollah during a one-month war. When a ceasefire was declared on August 14, 2006, both sides claimed victory, but the world knew that Israel had not won anything.
Eighteen years ago, Israel had to retreat in the face of Iran-backed Hezbollah, and last year on October 7, Hamas launched attacks from Gaza into Israeli territory. In response, Israel unleashed a brutal assault on civilians.
During the summer, Erdoğan talked about entering Israel to stop it, but soon remembered that the treasury was empty. Realizing that appealing to the public’s sense of victimhood would be more effective, he made a U-turn and declared, “We are a country targeted by Israel.”
THE 750 TL CREDIT CARD FEE WAS ŞİMŞEK’S IDEA
It soon became clear that Erdoğan’s fearmongering about Israel was part of a plan to collect more money from the public. A series of new tax regulations and financial collections were introduced to parliament. One of these measures was the proposal to collect 750 Turkish Lira annually from credit cards with a limit exceeding 100,000 TL, with the money being transferred to the Defense Industry Support Fund. This enraged the public. The question of who came up with the idea of collecting money from borrowed funds was answered during Şimşek’s interview on NTV.
Şimşek acknowledged that they respected the perception of the credit card fee as “extortion” but argued that “resources are needed.” He explained that they had worked on the issue after it was suggested, saying, “A set of measures was developed. This led to some transaction-based fees.” Since the head of the state cannot say, “We ran out of money in just eight months; we need funds,” fear had to be instilled in the public.
Mustafa Destici, the leader of the Great Unity Party, became increasingly mired in controversy during the “extortion” debate. Destici, who criticized the logic of collecting from borrowed money, accused those who opposed the idea of supporting Armenians or Greeks. However, just two days later, he made an extraordinary U-turn.
The problem wasn’t with the misrepresentation of Destici’s words, but with his own twisted logic. His inconsistency angered even Şamil Tayyar, an AK Party politician, who snapped at him, “So, with the decision to withdraw the 750 TL fee, is our president now also a traitor, Greek, or Armenian?”
ŞİMŞEK IS NOT A DECISION-MAKER, BUT A PLAYER IN ECONOMICS
After public outrage against the tax package prepared with the palace’s approval, it was withdrawn and postponed to 2025. Apparently, no Israeli attack is expected until 2025.
The fact that the package was withdrawn on the same day Şimşek defended it on TV revealed that he is not a decision-maker in the economy, but merely playing the role assigned to him. Having exposed his limited role in the economy, Şimşek squandered his last bit of credit with the palace.
Those who started the year with a public spending cut caused a 1 trillion lira budget deficit within just nine months. According to tax expert Ozan Bingöl:
“In the first nine months of the year:
- 13 million ₺ per minute,
- 783.5 million ₺ per hour,
- 18.8 billion ₺ per day,
- 570.4 billion ₺ per month,
- A total of 5.1 trillion lira in taxes was paid in the first nine months. Yet, this wasn’t enough, and we ended up with a 1 trillion 74 billion lira deficit in the first nine months!”
The spending of those who call non-payers of the 750 TL credit card ‘fee’ traitors is mind-boggling:
- The daily spending of the Presidency of Religious Affairs equals 16,000 minimum wage salaries.
- The daily spending of Beştepe Palace equals 3,526 minimum wage salaries.
Those who made no cuts in state expenditures believed they could reduce inflation by squeezing citizens. While they spoke of rational policies, their actual approach was that of ‘Deli Dumrul,’ pushing the economy deeper into a dead end.
It seems impossible for the country’s treasury to find salvation without curbing the lavish spending habits that have turned the budget into a devouring monster. Those who bring in rogue funds to postpone today’s debts cannot save the country, but they can extend the lifespan of their rule by passing the bill onto the people.
