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Turkeys President Recep Tayyip Erdogan moved to cement his control over the economy, claiming the exclusive power to appoint central bank rate-setters a day after naming his son-in-law to oversee economic policy.

The moves complete a years-long process that saw members of his investor-friendly A-team removed from the government one-by-one, increasingly rattling markets. The lira plunged on Monday by the most since a failed coup attempt two years ago and is down by 19 percent against the dollar so far this year.

Id have expected Erdogan to have learned the bitter cost of messing with markets, Atilla Yesilada, economist at GlobalSource Partners in Istanbul, said in an emailed report. Apparently, he does think that with his new powers he can best the markets.

Erdogan was sworn in Monday for a five-year term as president with enhanced powers after winning re-election under an amended constitution, setting the stage for him to follow through on a pre-vote promise to take more direct control over monetary policy. The 64-year-old leader has repeatedly clashed with the central bank over borrowing costs that he is determined to keep low under almost all circumstances.

He formalized his increased powers over top appointments at the bank with a decree on Tuesday. Turkeys largest business association, Tusiad, which has been urging the government to respect the rule of law and independence of institutions, cautioned that central bank autonomy is very important for a strong Turkish economy.

It isnt clear how the central bank will respond to price gains running more than triple the official target at its next monetary policy meeting on July 24.

Key is independence from influence and ability to do what is needed. Given the tough decisions needed to be taken, with the new cabinet and changes with decrees, that ability may have been impaired, especially on increasing interest rates to control inflation, according to Michel Danechi, a portfolio manager at Vedra Partners Limited in London.

The decree, one of the first three after Turkey officially shifted its governance system to an executive presidency, was published in the Official Gazette. It didnt include any reference to other members of the cabinet in appointing the central bank chief, who used to be named jointly by the president, prime minister and a deputy prime minister in a decree signed off by the entire cabinet.

The order followed his appointment of Berat Albayrak, a son-in-law and former energy minister who entered parliament for the first time in 2015, to run a new ministry of treasury and finance, combining what used to be the two most powerful economic jobs. Hell replace Mehmet Simsek, a former Merrill Lynch executive and the last man standing from a group of politicians whove been trusted by investors over the years to rein in the presidents go-for-growth instincts and keep Turkeys $880 billion economy on a sustainable path.

There was no job for Simsek in the downsized cabinet of 16 ministries.

From now on, budget and fiscal discipline will be maintained in a better way, Albayrak said as he took office on Tuesday.

Read: Turkey Strips Government of Role in Naming Central Bank Chief

The lira erased its earlier gains after the report and was trading 0.9 percent higher at 4.6910 per dollar at 4:33 p.m. in Istanbul. The currency depreciated more than 3 percent after Albayraks appointment on Monday.

The currencys slide is not good news for Turkeys indebted corporations, which have borrowed heavily in hard currency and now face ballooning foreign-exchange liabilities. The difference between the corporate sectors foreign liabilities and assets is at near record $221 billion as of end April.

For more on the cabinet, read: Erdogan Stokes Investor Unease With Son-in-Law as Economy Czar

Erdogan named Fuat Oktay, formerly a senior official at the prime ministers office, as his vice president and kept Mevlut Cavusoglu in place as foreign minister. Hulusi Akar, the chief of staff who was held hostage during the night of the coup attempt against Erdogan, was named as defense minister. Mustafa Varank, an Erdogan aide, will be in charge of industry and technology.

During the snap election campaign, Erdogan told Turks that the new presidential system would ensure stability in turbulent times at home and abroad.

After the unsuccessful putsch, authorities began a sweeping purge of the civil service, judiciary, security forces and education system, arguing that supporters of the coup attempt were being rooted out. Thousands more officials were fired from government jobs on Sunday, bringing the total to about 130,000. Turkey has also become more deeply embroiled in the civil war in neighboring Syria, as Erdogan sent his army into the countrys northwest to fight Kurdish militants.

With assistance by Constantine Courcoulas, Tugce Ozsoy, and Asli Kandemir

(Updates with remarks from finance and treasury minister in 11th paragraph.)

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Erdogan Expands Clout Over Central Bank, as He Promised

ISTANBUL Turkish President Recep Tayyip Erdogan was sworn in Monday under a new governing system that grants him sweeping executive powers, which critics say give him far too much control.

A former Istanbul mayor, Erdogan has been at the helm of Turkey since 2003 as prime minister and then the first directly elected president since 2014.

Speaking at his sprawling presidential compound in Ankara, Erdogan unveiled the rebranded presidency "on this most important day of our country."

He won last month's election with 52.9 percent of the vote, ushered in the executive presidency that ends parliamentary governance and boosts the powers of the formerly ceremonial presidency.

Erdogan said the executive presidency would put behind a "system that heavily cost our country through political, social and economic chaos."

He argued that the new structure would bring stability and efficiency and said, "is not forced but rather a sagacious choice that history has led us to." Turkey narrowly approved the executive presidency in a contentious referendum last year.

Abolishing the post of prime minister, the president will now form the government, appoint ministers, vice presidents and high-level bureaucrats, issue decrees, prepare the budget and has the power to impose a state of emergency. Parliament can ratify or reject his budget and the president needs parliamentary approval for emergency rule and decrees passed during that time.

Under the new system, Erdogan will not only run the executive branch but also lead his Justice and Development Party in parliament where he is six short of a majority and therefore allied with a nationalist party. Critics say the new system undermines impartiality and could lead to one-man rule with limited checks and balances.

Crowds cheered Erdogan along his convoy's route as he made his way to the inauguration ceremony. The presidency tweeted with the hashtag #NewEraWithErdogan. A special one lira coin (less than 25 U.S. cents) was minted for guests with the image of the presidential palace, dated July 9, 2018.

The now defunct government of Prime Minister Binali Yildirim issued a last-minute decree revamping ministries to conform to the new executive presidency structure. Erdogan is expected to announce his Cabinet on Monday evening.

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Erdogan inaugurates Turkey's powerful executive presidency ...

Turkey on Wednesday issued a decree that transfers some powers to the president, as the country moves to an executive presidential system following President Tayyip Erdogan's win in last month's presidential and parliamentary elections.

The decree, issued in the government's official gazette, makes changes to laws dating from 1924 to 2017, removes references to the prime minister whose office has been abolished and replaces them with "president."

Read more:The impact of Turkey's election: Erdogan's sweeping new powers

The changes mean the president can

Read more:Could Turkey's opposition reset ties with the EU?

When the changes will come into effect: The changes in the latest decree will take effect when Erdogan takes the oath of office, which is expected to happen in parliament on July 8 or 9.

The new presidential system: In a constitutional referendum in April 2017, a slim majority of Turkish voters approved the presidential system. The constitutional change allowed the winner of the 2018presidential election to assume full control of the government.

Read more:Opinion: Recep Tayyip Erdogan wins, democracy loses

Term limits: The president is limited to two five-year presidential terms, but if the parliament calls early elections during the second term the president may run for a third term.

Erdogan's rise to power: Erdogan served as prime minister of Turkey, formerly the country's most powerful post,from 2003 until 2014. Plans to alter the system to place Turkey's meaningful political power in his new rolewere already in motion before his job swap in 2014; before the April 2017 referendum, the presidential role was largely ceremonial. Erdoganwas reelected president in snap presidential elections in June 2018, having called them more than a year ahead of schedule. That was the final hurdle to implementing his desired reforms, opposition candidates had pledged to repeal some or all of them if they had won.

On Wednesday, Turkey's state election commission announced its finalvote tally, in which President Erdogan won 52.59 percent of the vote, followed by opposition candidate Muharrem Ince of the CHP party with 30.64 percent and jailed pro-Kurdish candidate Selahattin Demirtas with 8.4 percent.

In Turkey and abroad, Recep Tayyip Erdogan has a polarizing effect. He has been described as a neo-Ottoman "sultan" as well as an authoritarian leader. From his early beginnings campaigning for Islamist causes to leading NATO's second largest military as the president of Turkey, DW explores the rise of the Turkish leader.

After years of moving up the ranks of the Islamist-rooted Welfare Party, Erdogan was elected mayor of Istanbul in 1994. But four years later, the party was ruled unconstitutional on the grounds it threatened Turkey's secularist nature, and was disbanded. He was later jailed for four months for a controversial public reading of a poem, and consequently lost his mayorship over the conviction.

Erdogan co-founded the Justice and Development Party (AKP), which won a majority of seats in 2002. He was made prime minister in 2003. During his first years in office, Erdogan worked on providing social services, improving the economy and implementing democratic reforms. But some have argued that his premiership was also marked by a religious shift in the political sphere.

While Turkey's constitution guarantees the country's secular nature, observers believe Erdogan has managed to purge the "old secularist guard." The Turkish leader has said that one of his goals is to raise a "pious generation." Erdogan's supporters have hailed the Turkish leader's initiatives, arguing that they've reversed years of discrimination against practicing Muslims.

In July 2016, a failed military coup targeting Erdogan and his government left more than 200 people dead, including civilians and soldiers. In the wake of the coup attempt, Erdogan declared a state of emergency and vowed to "clean up" the military. "In Turkey, armed forces are not governing the state or leading the state. They cannot," he said.

Since the failed coup, authorities have launched a nationwide crackdown, arresting more than 50,000 people in the armed forces, police, judiciary, schools and media. Erdogan has blamed Fethullah Gulen, a self-exiled cleric in the US and former ally, and his supporters of trying to undermine the government. But rights groups believe the allegations are a means to solidify his power and influence.

While Erdogan enjoys significant support in Turkey and the Turkish expatriate community, he has been criticized for his heavy-handed policies and military campaigns against Kurdish militants following the collapse of a peace process in 2015. This January, Erdogan launched a deadly offensive into the northern Syrian enclave of Afrin, an operation that was widely condemned by human rights groups.

Having served as Turkey's president since 2014, Erdogan successfully extended his time in office after winning elections in June. The elections marked Turkey's transition to an executive-style presidency. Observers believe the elections will herald a new era for Turkey for better or worse.

Author: Lewis Sanders IV

law/msh (AP, Reuters)

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Turkey transfers some powers to President Erdogan | News | DW ...

ANKARA, Turkey Turkey's highest electoral body on Wednesday certified the results of last month's parliamentary and presidential elections, paving the way for President Recep Tayyip Erdogan to continue his 15-year rule with expanded powers.

The Supreme Electoral Council confirmed Erdogan's victory in the June 24 presidential race, declaring that he won 52.59 percent of the votes. His closest rival, Muharrem Ince of the main opposition Republican People's Party, or CHP, gained 30.64 percent, while the imprisoned, pro-Kurdish candidate, Selahattin Demirtas, garnered 8.40 percent, the council confirmed.

According to the official result, Erdogan's conservative Justice and Development Party won 42.56 percent of the votes in the parliamentary ballot. The CHP's votes stood at 22.65 percent.

Erdogan, who is scheduled to be sworn into his new, five-year term on Monday, is set to rule with substantially expanded powers, in line with constitutional changes that were narrowly approved in a referendum last year.

Erdogan's party retains control of the parliament due to its alliance with Turkey's main nationalist party.

Earlier, the government issued a decree adjusting Turkey's laws to the new presidential system that comes into effect with the elections.

The decree, published in the Official Gazette, changes the wording in some 5,000 laws, removing references to the prime minister whose office has been abolished and transferring some powers to the president.

Under the new system, the president takes over the executive branch and forms the government, and appoints vice presidents, ministers and senior officials. The president can also issue decrees, prepare the budget and decide on security policies.

Critics say the new system amounts to one-man rule with few checks and balances.

Erdogan is also expected to form his government on July 9, shortly after he takes the oath of office.

The president has said he plans to streamline the cabinet, reducing the number of ministries from 26 to 16.

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Turkey's election board confirms Erdogan win | Fox News

ANKARA (Reuters) - President Tayyip Erdogan appointed his son-in-law as Turkeys finance minister on Monday hours after he was sworn in with sweeping new executive powers, promising a strong government and a strong Turkey.

The lira TRYTOM=D3, which has lost nearly a fifth of its value against the dollar this year, dropped nearly 3 percent to 4.74 to the U.S. currency after the cabinet announcement.

Erdogan named his son-in-law Berat Albayrak as treasury and finance minister in an updated cabinet that excluded former deputy prime minister Mehmet Simsek, seen as the main market-friendly minister in the previous government.

The lira has been battered by concern about Erdogans drive for lower interest rates and by comments in May that he planned to take greater control of the economy after the election, which he won on June 24.

Assuming the new executive presidency he has long fought to establish, Erdogan earlier took the oath of office in parliament before addressing international leaders gathered at the presidential palace in Ankara.

We, as Turkey and as the Turkish people, are making a new start here today, he told the dignitaries and thousands of guests. We are leaving behind the system that has in the past cost our country a heavy price in political and economic chaos.

Erdogan named Fuat Oktay, a former Turkish Airlines executive who studied in the United States, as vice president. Armed forces chief of staff Hulusi Akar was named defense minister. Foreign Minister Mevlut Cavusoglu remained in his post.

Erdogan, 64, says a powerful executive presidency is vital to drive economic growth, ensure security after a failed 2016 military coup and safeguard Turkey from war across its southern border in Syria and Iraq.

We are embarking on this road by using this opportunity as best we can for a strong parliament, strong government and strong Turkey, he said.

The introduction of the new presidential system is the biggest overhaul of governance since the Turkish republic was established on the ruins of the Ottoman Empire nearly a century ago.

The post of prime minister has been scrapped and the president will be able to select a cabinet, regulate ministries and remove civil servants, all without parliamentary approval.

Erdogans supporters see the changes as just reward for a leader who has put Islamic values at the core of public life, championed the pious working classes and overseen years of strong economic growth.

Opponents say the move marks a lurch to authoritarianism, accusing Erdogan of eroding the secular institutions set up by modern Turkeys founder, Mustafa Kemal Ataturk, and driving it further from Western values of democracy and free speech.

Marc Pierini, a former EU ambassador to Turkey and visiting scholar at Carnegie Europe, said Erdogans new powers effectively make him a super-executive president.

Most powers will be concentrated in his hands, there will no longer be a prime minister, and almost none of the checks and balances of liberal democracies will be present. In other words, Turkey will be an institutionalized autocracy.

State news agency Anadolu said Erdogans inauguration celebration was attended by Venezuelan President Nicolas Maduro, Russian Prime Minister Dmitry Medvedev and Sudanese President Omar Hassan al-Bashir, wanted for war crimes by the International Criminal Court.

No major Western leader featured on a list of 50 presidents, prime ministers and other high-ranking guests.

Turkey is a member of the Western military alliance, NATO, but it has been at odds with the United States over military strategy in Syria and with the European Union over Ankaras purges of state institutions, armed forces, police and media following the failed coup.

There are 16 ministers in Erdogans streamlined new cabinet, which Erdogan has said will be more efficient and act faster.

The new government faces immediate economic challenges. Inflation surged last month above 15 percent, its highest level in more than a decade, even though the central bank has raised interest rates by 5 percentage points since April.

Turkey also faces a widening current account deficit making it reliant on weak foreign investment to plug the gap.

Earlier on Monday the lira briefly dropped more than 1 percent after a decree removed a clause stipulating a five-year term for the central bank governor.

Scrapping the term would remove a shield that helps ensure the banks independence from politicians, former central banker Ugur Gurses said. A senior adviser to Erdogan later said that governors would still be appointed for a five-year term.

Reporting by Tulay Karadeniz and Tuvan Gumrukcu; Additional reporting by Ezgi Erkoyun, Daren Butler, Ali Kucukgocmen and Humeyra Pamuk in Istanbul, and Tuvan Gumrukcu and Ece Toksabay in Ankara; Writing by David Dolan and Gareth Jones; editing by Dominic Evans and Grant McCool

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Erdogan assumes new presidential powers, tightening ...