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Lobbying Firm Sought Envoys’ Help to Save Russian Firm

A U.S. lobbying firm sought to recruit the ambassadors of France, Germany and several other countries to demonstrate international support for severing Russian oligarch Oleg Deripaska’s control of Rusal, the aluminum manufacturing giant sanctioned by Washington.

Documents made public by the Justice Department show that Mercury LLC drafted messages for at least six envoys to send to senior U.S. government officials that expressed support for a plan to eliminate Deripaska’s majority stake in the EN+ Group, the holding company that owns nearly 50 percent of Rusal.

The records are the latest installment in a drama full of international intrigue. 

Deripaska’s close ties to Russian President Vladimir Putin are under a microscope while unintended targets of the U.S. penalties struggle with the punishment’s impact. Leading the way, in an odd twist, is a conservative member of Britain’s House of Lords, Gregory Barker, who hired Mercury to salvage Rusal and EN+ by casting Deripaska as the heavy.

It’s unclear how many of the ambassadors sent the messages. But Jamaica’s envoy did, underscoring concerns about the future of a Rusal-owned factory on the Caribbean island.

Collateral impact

When the Treasury imposed sanctions on Deripaska a few months ago, EN+ and Rusal were blacklisted, too, because of the cascading nature of the penalties. It fell to Barker, who was installed less than a year ago as chairman of EN+’s board, to persuade the Trump administration to lift the sanctions against both companies. To do that, he will have to assure the U.S. that Deripaska is no longer calling the shots at EN+ or Rusal.

Barker, a former British energy minister, signed a contract with Mercury in early May, a month after the Treasury Department announced the sanctions. Mercury is to be paid $108,500 every four weeks, according to the contract, to support Barker’s efforts to negotiate Deripaska’s exit from the EN+ board and “the reduction of his ownership interest in the company.”

Anders Aslund, a senior fellow at the Atlantic Council and an expert on Russia’s economic policy, said there can be only two possible owners of Rusal: the Russian government or Deripaska. That’s because the aluminum company’s main assets are giant smelters in east Siberia, a reality he said Treasury officials failed to grasp.

“It appears to me that both parties play the game now: Deripaska reduces his public exposure and the Treasury [Department] pretends that it is satisfied, gradually easing the sanctions,” Aslund said.

The letters prepared for the envoys said Deripaska, not the companies, was the “true target” of the U.S. sanctions. He’s already resigned from the EN+ board. The Treasury Department has set a late October deadline for his 70 percent stake in EN+ to be cut back to less than 50 percent. The “path for the United States to provide sanctions relief,” the department said, is through Deripaska’s divestment and relinquishment of control.

Economic damage

The draft messages, along with background material prepared by Mercury, warned that each country would be damaged economically if the sanctions weren’t eased. France and Germany rely on Rusal’s aluminum in their automotive, telecommunications and aerospace industries. And Rusal is a full or part owner of factories that employ hundreds of people in Ireland, Sweden, Australia and Jamaica.

The ambassadors of France and Sweden did not send the messages, according to representatives from each embassy. The embassies of Germany, Ireland and Australia wouldn’t say.

The Treasury Department announced sanctions against Deripaska in early April as part of an array of measures that targeted tycoons close to the Kremlin, cutting Rusal off from international financial institutions. In spelling out the penalties, the department said Deripaska had been accused of illegal wiretaps, extortion, racketeering, money laundering and even death threats against business rivals.

Deripaska also has figured into special counsel Robert Mueller’s investigation into links between Donald Trump’s 2016 presidential campaign and Russia because of Deripaska’s connection to former Trump campaign chairman Paul Manafort, who once worked as a consultant to the billionaire businessman. Prosecutors recently disclosed that Deripaska provided a Manafort company with $10 million around 2010, a transaction described as a loan on U.S. income tax forms.

Neither Deripaska nor Manafort has been formally accused of taking part in Russian election-meddling; both have denied any involvement.

The push to curb Deripaska’s influence is playing out as Trump readies for a summit with Putin on Monday in Helsinki. Putin may try to call for Washington to relax the sanctions, which were triggered by Russia’s annexation of Crimea, interference in eastern Ukraine’s separatist fighting and meddling in the 2016 U.S. election.

No word on replacement

The draft messages say that Barker’s approach is supported by other board members and EN+’s minority shareholders. The Trump administration is urged to extend any “relevant deadlines” to allow the plan to be fully implemented, according to the messages. There’s no indication, however, of who or what EN+’s new majority shareholder would be.

The Treasury Department and the State Department declined to comment on Mercury’s lobbying effort.

The letter dated June 14 that Jamaica’s ambassador, Audrey Marks, sent to Treasury Department officials is nearly identical to the one Mercury prepared. Rusal owns the West Indies Alumina Company and “continued sanctions will impact our economy and jobs, with the attendant impact on workers and their dependents,” Marks wrote.

Lillian Farrell, a spokeswoman for the Irish Embassy, said Ireland is “gravely concerned” about the impact the sanctions will have on the Rusal-owned factory in Limerick. The embassy “is in ongoing contact with the U.S. authorities” about the plant’s future, she said. The embassy has had discussions “with interested third parties,” but the content of those conversations is confidential, Farrell said.

The letter Mercury prepared for Sweden’s ambassador, Karin Olofsdotter, described the Rusal-owned Kubikenborg Aluminum as the country’s largest industrial facility.

Officials from the Swedish Embassy met with Mercury representatives, according to Gunnar Vrang, a spokesman for the Ministry for Foreign Affairs in Stockholm, but no one in Sweden’s government sent a message. He said Sweden and the U.S. have a shared interest in avoiding “unintended negative consequences of the sanctions in question.”

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Expectations Are Low for Trump-Putin Summit 

A summit between the leaders of the United States and Russia, scheduled Monday for this Baltic port city, appears to have no firm goals. But it is expected that U.S. President Donald Trump and Russian President Vladimir Putin will discuss a wide range of issues, from nuclear arms reduction to the war in Syria, in which Washington and Moscow back opposing forces.

“That would be a tremendous achievement if we could do something on nuclear proliferation,” Trump told reporters alongside British Prime Minister Theresa May on Friday.

Ahead of the encounter with Putin, the U.S. president is spending two days at his private club in Turnberry, Scotland:

Looming over the summit is Friday’s indictment of 12 Russians charged with hacking into Democrats’ computers ahead of the 2016 presidential election won by Trump.

The indictment alleges that members of the Russian military agency GRU stole data from the computer networks of Democratic Party organizations and the Hillary Clinton campaign.

“The goal of the conspirators was to have an impact on the election,” U.S. Deputy Attorney General Rod Rosenstein told reporters on Friday.

Before the indictment was announced, Trump vowed to raise the issue of Russian meddling in U.S. elections with Putin. 

“I will absolutely firmly ask the question,” the president said on Friday in England.

A day after the indictment was returned, Trump, on Twitter, blamed the administration of his predecessor, Barack Obama, for not taking action:

Trump linked the federal government investigation of Russian interference to the “deep state,” a reference to an unproven conspiracy of a clandestine network among government bureaucrats and intelligence agencies.

Special counsel Robert Mueller has now indicted or secured guilty pleas from 32 people, including four former Trump advisers, and three Russian companies. Trump terms the investigation a “rigged witch hunt.”

A number of top Democrats implored the president to call off the summit with Putin because of the latest indictments. White House officials with the president in Scotland said there was no chance of a cancellation.

While host Finland is a partner in the West’s North Atlantic Treaty Organization, it is not a full-fledged member of the defense pact. 

Independent from neighboring Russia for the past century, Finland, despite being a member of the European Union, maintains a pragmatic relationship with its larger neighbor while expanding its ties with the West, making it a fitting venue for a summit between Trump and Putin.

“Finland is one of those countries that both the United States and Russia appreciates,” explained Finnish Defense Forces Lieutenant Colonel Jyri Raitasalo, a professor of war studies at the Finnish National Defense University. “It’s not involved in many of these most intense struggles between Russia and the West.”

Finland shares a 1,300-kilometer border with Russia. It, along with NATO’s new member states on the eastern flank, is increasingly worried about Trump’s critical comments about the alliance and will be nervously watching the summit between Trump and Putin, according to Raitasalo.

The two leaders, according to diplomatic sources, are set to meet one on one, each with his interpreter present, for 30 minutes to an hour. Wider talks involving aides will then follow.

NATO members “are really worried, understandably so,” Raitasalo told VOA, adding that the Helsinki talks “could open up new negotiations on a lower level that could actually achieve something. But I think it could take time. In most cases, a couple of hours between heads of states that haven’t seen each other for a time and discussed things properly, you can’t achieve much in several hours. But it could be a good start.”

According to former U.S. Ambassador to Russia Michael McFaul, “Putin wants a lovefest.”

In a tweet, McFaul said, “To achieve victory, all Putin needs is for Trump to say nice things about him and signal that he wants to move on and forget about Russia’s past belligerent actions over the last three years.”

VOA correspondent Bill Gallo contributed to this report.

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Machine Transforms Household Trash into Fuel

British inventor Nik Spencer believes household garbage is a valuable and underrated resource. That’s because trash happens to be the perfect fuel for his latest invention: the Home Energy Resources Unit, or HERU. VOA’s Julie Taboh has more.

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12 Russians Accused of Hacking Democrats in 2016 Campaign

The investigation into Russian meddling in the 2016 U.S. election took another serious turn Friday when the Justice Department announced the indictment of 12 Russian military intelligence officers for conspiring to interfere in the elections. The charges come just days before President Donald Trump meets with Russian President Vladimir Putin, and on the same day that Trump once again dismissed the Russia probe as a “witch hunt.” VOA National correspondent Jim Malone reports from Washington.

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UK Says Bottle Source of Pair’s Novichok Poisoning

British detectives investigating the poisoning of two people with a military grade nerve agent said Friday that a small bottle found in the home of one of the victims tested positive for Novichok, a lethal substance produced in the Soviet Union during the Cold War.

Dawn Sturgess, 44, and Charlie Rowley, 45, were sickened on June 30 in a southwestern England town not far from Salisbury, where British authorities say a Russian ex-spy and his daughter were poisoned with Novichok in March. 

Sturgess died in a hospital on Sunday. Rowley was in critical condition for more than a week, but has regained consciousness.

The Metropolitan Police said the bottle was found during searches of Rowley’s house Wednesday and scientists confirmed the substance in the bottle was Novichok. Police have interviewed Rowley since he became conscious. 

Police are still looking into where the bottle came from and how it got into Rowley’s house. They said further tests would be done to try to establish if the nerve agent was from the same batch that was used to poison Russian ex-spy Sergei Skripal and his daughter, Yulia. 

More than 100 police officers had been searching for the source of Rowley and Sturgess’ exposure in the town of Amesbury, where they lived, and Salisbury, where the Skripals were poisoned.

The Skripals survived and were released from the Salisbury hospital before Rowley and Sturgess were poisoned and taken there. British authorities took the father and daughter to a secret protected location.

British police said earlier they suspected the new victims had handled a container contaminated with Novichok and had no reason to think Rowley and Sturgess were targeted deliberately. 

Assistant Police Commissioner Neil Basu, Britain’s top counterterrorism officer, told local residents this week that Novichok could remain active for 50 years if it kept in a sealed container. He said he could not guarantee there were no more traces of the lethal poison in the area.

Basu said Friday that cordons would remain in place in some locations to protect the public despite the apparent breakthrough in the case. He would not provide more information about the bottle found in Rowley’s home. 

“This is clearly a significant and positive development. However, we cannot guarantee that there isn’t any more of the substance left,” Basu said. The continued blocking off of areas would “allow thorough searches to continue as a precautionary measure for public safety and to assist the investigation team.”

Britain’s Foreign Office said Friday that the U.K. has asked the Organization for the Prohibition of Chemical Weapons to collect samples for analysis at its labs. The organization has the power to assign blame for chemical weapons use.

The Novichok saga began in March when the Skripals mysteriously fell ill on a park bench in Salisbury. They were found to have been poisoned with Novichok. 

Prime Minister Theresa May blamed the Russian government for the attack, which the Kremlin has vehemently denied. The case led the United States and other countries to expel a large number of Russian diplomats.

Public health officials said the risk of exposure to the public is low, but advised people not to pick up any strange items.

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Top Official Says Tehran Has no Intention of Leaving Syria

A senior envoy to Iran’s leader says Tehran has no intention of leaving Syria despite U.S. and Israeli pressure.

 

The statement from Ali Akbar Velayati, a senior adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei, follows his meeting in Moscow with Russian President Vladimir Putin.

 

It comes days before Monday’s summit in Helsinki between Putin and U.S. President Donald Trump, where the issue of the Iranian presence in Syria is set to top the agenda.

 

Both the U.S. and Israel want Iran to pull out of Syria. But Russia has warned it would be unrealistic to expect Iran to fully withdraw from the country.

 

A possible deal could see Syrian troops replacing Iranian forces and its proxy Hezbollah militia in the areas near the Israeli-occupied Golan Heights.

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Jailed Ukrainian Filmmaker’s Mother Asks Putin to Pardon Him

The mother of a jailed Ukrainian filmmaker who has been refusing food for nearly two months asked Russian President Vladimir Putin on Friday to pardon him.

Oleg Sentsov, a vocal opponent of Russia’s annexation of Crimea, was sentenced in 2015 to 20 years for conspiracy to commit terror acts. He denies the charges and has been on a hunger strike since mid-May.

In a letter written on Sentsov’s 42nd birthday, Lyudmila Sentsova pleaded with Putin to show mercy and pardon her son. The letter was published by the liberal Ekho Moskvy radio station Friday.

“I will not trying to convince you of Oleg’s innocence, although I myself believe it. I will simply say that he didn’t kill anyone,” Sentsova wrote. “He has already spent four years in jail. His children are waiting for him.”

She exhorted Putin “not to ruin his life and the life of his loved ones.”

Sentsov has lost about 20 kilograms (44 pounds) and is very frail, according to his lawyer. He is receiving vitamins and other nutrients through an intravenous line.

Putin’s spokesman Dmitry Peskov said that Putin would consider the request. But Peskov added that he wasn’t sure whether pardoning Sentsov was even legally possible since under Russian law, the president can only pardon a convict if he or she personally asks. Sentsov has refused to do that.

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Trump Meets With May After Blasting Her In Newspaper Interview

U.S. President Donald Trump is meeting with British Prime Minister Theresa May for talks overshadowed by an explosive interview the U.S. leader gave to Britain’s The Sun newspaper, slamming May for her handling of Brexit, praising her former foreign minister as a good candidate to replace her, and blaming immigrants in London for the city’s crime.

The two leaders are meeting at Chequers where they are discussing foreign policy, including the Middle East, according to White House officials. At the start of the discussions the president told reporters the relationship between Britain and the U.S. remains “very strong.” He did not address The Sun interview. 

Trump visiting the Royal Military Academy at Sandhurst, before going to Chequers — the 16th century manor house of the current prime minister. After Chequers, he is scheduled to go to Windsor Castle where Queen Elizabeth II is scheduled to host Trump and first lady Melania Trump for tea.

He is taking helicopters to his various destinations. U.S. Ambassador Woody Johnson says the president “is not avoiding anything” relying on helicopters, rather he is “trying to get as impactful a trip as he can get within a 24-hour period.”

There are, however, street protests against Trump’s first visit to Britain since taking office nearly 18 months ago. One protest group has been given permission for a balloon in the president’s image, shaded in orange and dressed in a diaper, known as the “Trump Baby Blimp,” to hover over Parliament Square Garden.

London Mayor Sadiq Khan said the demonstrations are not anti-American but rather reflect opposition to “the politics of fear and despair.”

Trump has long spoken of his desire to meet the monarch, but for this queen, such encounters with U.S. presidents are old hat, having met 10 American leaders since her coronation in 1952.

 

Trump, however, is the most unconventional of modern U.S. presidents and there is some anxiety in Britain about whether he will adhere to protocol.

 

​Gala dinner

Trump and the first lady attended a gala dinner in their honor Thursday hosted by the prime minister at the 17th century Blenheim Palace, 100 kilometers northwest of London.

During the gala, a wide-ranging interview Trump gave to Britain’s The Sun newspaper was posted on its website. In it Trump blasted May for wrecking Brexit.

“I actually told Theresa May how to do [Brexit],” the U.S. leader said in the interview, “but she didn’t agree, she didn’t listen to me.” 

Trump also warned May in the interview that any future trade deal with Britain will not be likely if Britain has a soft exit from the European Union.

“If they do a deal like that,” Trump said, “we would be dealing with the European Union instead of dealing with the UK,” adding that approach would “probably kill” any future trade deals with the U.S.

He complained that the soft Brexit plan was a contentious move against the U.S. because the EU “is very bad to the United States on trade.” 

 

Trump had words of praise, however, for former British Foreign Minister Boris Johnson, who resigned earlier this week over the soft Brexit strategy, saying Johnson would “make a great prime minister.”

White House Press Secretary Sarah Huckabee Sanders, in response to questions about the president’s Sun interview, said in a statement: “The President likes and respects Prime Minister May very much. As he said in his interview with The Sun she ‘is a very good person’ and he ‘never said anything bad about her.’… He is thankful for the wonderful welcome from the Prime Minister here in the U.K.”

President Trump also told The Sun London Mayor Khan has “done a very bad job on terrorism”by allowing so many migrants to come to the city.

Khan told BBC Radio Friday, “The idea that you can blame [a rise in crime] on immigration from Africa is I think preposterous and we should call him out when he does so.”

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An Unsettled Britain Playing Host to Trump

A tense London, beset by domestic political turmoil and street protests targeting Donald Trump, began hosting the U.S. president on Thursday – his first visit to Britain since taking office nearly 18 months ago.

Trump, just prior to arriving in the country, referred to Britain as “a hot spot right now.”

After a 15-minute helicopter ride from Stansted airport, the president and first lady Melania Trump disembarked at Winfield House, the U.S. ambassador’s residence on the edge of Regent’s Park.

They were welcomed by U.S. embassy staffers as the Beatles’ song “We Can Work It Out” played in the background.

The Trumps held hands as they walked to meet Ambassador Woody Johnson, better known as the co-owner of the New York Jets football team.

Chief of Staff John Kelly and National Security Adviser John Bolton trailed a few meters behind.

Their arrival occurs amid a period of instability for Prime Minister Theresa May after her foreign minister, Boris Johnson, and others this week resigned in protest about a softened government plan for the country’s exit from the European Union.

At a news conference at NATO headquarters in Brussels earlier in the day, Trump was asked about Brexit, and he did not hesitate to bluntly comment on the British internal imbroglio, noting Britons had voted to leave the EU, “so I would imagine that’s what they would do. But maybe they’re taking a different route – I don’t know if that is what they voted for” – a reference to May’s compromise plan.

Trump added that it seemed to him Britain is “getting a least partially involved back with the European Union,” adding “I’d like to see them be able to work it out, so it could go quickly.”

Trump has expressed a desire for the United States and Britain to reach an exclusive trade pact.

It is an issue Trump will have an opportunity to discuss with May on Thursday evening when he and his wife attend a gala dinner in their honor hosted by the prime minister at the 17th century Blenheim Palace, 100 kilometers northwest of London.

Protests planned

The Trumps will shuttle to and from the black-tie event at the birthplace and ancestral home of the late British Prime Minister Winston Churchill by helicopter, allowing them to stay well above the raucous on the streets.

“My message to those coming to the protests in London is that this must be peaceful and good-spirited,” said London Mayor Sadiq Khan in a statement. “To those intent on causing trouble or breaking the law, I simply say: you are not welcome.”

Khan, of the opposition Labor Party and no fan of Trump, added that the demonstrations are not anti-American but rather reflect opposition to “the politics of fear and despair.”

The U.S. Embassy noted planned protests from Thursday through Saturday “expect to attract large crowds,” warning Americans in London to “exercise caution if unexpectedly in the vicinity of large gatherings that may become violent.”In Brussels, Trump brushed off a question about the protests saying he thought Britons “like me a lot.”

One protest group has been given permission from Friday for a balloon in the president’s image, shaded in orange and dressed in a diaper, known as the “Trump Baby Blimp,” to hover over Parliament Square Garden.

President Trump on Friday will himself spend considerable time in the air, using helicopters to reach Royal Military Academy at Sandhurst, then Chequers — the 16th century manor house of the current prime minister –- followed by Windsor Castle, before returning to Stansted Airport.Ambassador Johnson, speaking earlier to reporters said Trump “is not avoiding anything” relying on helicopters, rather he is “trying to get as impactful a trip as he can get within a 24-hour period.”

At Chequers, Trump and May will discuss foreign policy, according to White House officials.

Queen Elizabeth II will host the president and first lady for tea at Windsor.

Trump has long spoken of his desire to meet the monarch, but for this queen such encounters with U.S. presidents are old hat having met 10 American leaders since her coronation in 1952.

Trump, however, is the most unconventional of modern U.S. presidents and there is some anxiety in Britain about whether he will adhere to protocol.

The anticipation is evident in a promotional spot running on a British television network which begins with a montage of Trump shaking or grasping hands with a number of foreign leaders.

“How hands on will he be with the Queen?” teases the announcement. “Find out on Sky News.”

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Turkey’s Economic Policy Stokes Currency Fears as Lira Plummets

The Turkish lira recovered some losses Thursday hours after it hit record lows. New Treasury and  Finance Minister Berat Albayrak, President Recep Tayyip Erdogan’s son-in-law, sought to reassure nervous markets that the central bank’s independence was not in question.

The wild currency gyrations following Albayrak’s appointment underscore concerns over what economic policy Erdogan will adhere to now that he has consolidated power following his June re-election.

The lira approached five to the dollar late Wednesday in a nearly 30 percent depreciation since the beginning of the year.

The heavy decline is a result of worries over Erdogan’s economic expansion policy.

Although growth has soared more than 7 percent, inflation has surpassed 15 percent — a 15-year high — while the current deficit has widened to more than 6 percent of national income.

Analysts say after the June election, key ministers led investors to believe Erdogan would adopt austerity measures to rein in inflation. They are concerned the president, with the appointment of his son-in-law, may be seeking more control over monetary issues while excluding two prominent government figures from any say on policy.

“The two faces of market-friendly policies, Deputy Prime Minister Mehmet Simsek and Finance Minister Naci Agbal, are being excluded from policymaking roles,” economist Inan Demir of Nomura International Securities said.

“Before the elections,” he continued, “Agbal and Simsek had been talking to investors before the election, promising a return to orthodoxy that would generate a cooldown in the economy. The appointment of his son-in-law [Berat Albayrak] as the economy czar, would lead many investors to believe Erdogan will take tighter control of the economy, which would essentially annul promises of Agbal and Simsek.”

Agbal and Simsek are credited with persuading Erdogan to agree to an emergency hike in interest rates in May to protect the lira after steep falls. The Turkish president subscribes to the unorthodox view that low interest rates curb inflation, describing high interest rates as “the mother and father of all evils.”

Erdogan unnerved markets Tuesday by declaring his belief that “we will see interest rates fall in the period ahead.” Investors say any interest rate reduction would result in the total collapse of the currency, and that further increases are needed to secure the lira.

In a move to calm investors, Albayrak Thursday pledged to cut inflation, saying structural reform and fiscal discipline would be enforced, and he guaranteed the central bank’s independence. His statement saw the lira bounce back slightly.

Words, though, might not be enough. “It depends on how Albayrak will act really,” economist Demir said. “It’s possible if he manages to reassure the markets by actions, then the sell-off can subside. Otherwise, we will see an ongoing fall in lira assets going forward.”

Analysts warn there is skepticism about whether Albayrak will follow through on his commitment to fiscal discipline. Erdogan’s re-election campaign centered on the promise to continue with massive public construction projects and opposition to interest rate increases.

Political considerations

Political analyst Atilla Yesilada of Global Source partners suggests that political considerations could outweigh economic concerns.

“Something needs to be done. And the traditional recipe is belt-tightening and structural reforms in the traditional sense, to curtail domestic demand,” he said. “The challenge there is not that Erdogan is incapable of signing off for such a recipe. He is facing local elections in March 2019, which are extremely important, and the voters need to be fed, and that is the opposite of what the traditional recipe requires.”

A critical test of the direction Erdogan might choose will come at a July 24 meeting of the central bank. “If the central bank cannot find an opportunity to hike, the markets will take it very badly,” Demir said.

The failure of the central bank to act likely would increase worries about the introduction of capital controls to restrict money from leaving Turkey in a bid to protect the lira.

Demir said such a move would be counterproductive as it would end much of the international investment. Turkey needs to borrow about $5 billion monthly to cover the difference between its imports and exports.

As speculation rises over the threat of capital controls, Demir acknowledged investors now are asking about the risk of such a move. Pressure for decisive action by the central bank at its meeting July 24 is seen as critical to stemming the risk of an investor stampede out of the Turkish market.