Turkey: damned either way

On Sunday 16 April, Turkey is holding a referendum on whether its increasingly authoritarian president Recep Tayyip Erdogan should be granted even more power. The ballot paper proposes the abolition of the office of prime minister, while Erdogan would also be able to appoint half of the most senior judges and extend his influence over parliament.

"Investors are struggling to see much upside" whether the measures pass or not, say Tugce Ozsoy and Constantine Courcoulas on Bloomberg.com. The polls are on a knife edge. Some reckon there could be a short relief rally simply because an issue that has dogged markets for some time will have disappeared.

But it won't last. The economy has struggled. Erdogan has continually tried to bully the central bank into cutting interest rates, even though higher rates have been required to squeeze out inflation caused by the plummeting lira. The plunging currency was a result of his own erratic behaviour. Now a "Yes" vote will cement the impression of Turkey turning into Russia, while a "No" could see further instability as Erdogan refuses to give up, creating more political uncertainty.

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