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President Recep Tayyip Erdoganwarned the US in comments published Sunday that sanctions would not force Ankara to "step back" after Donald Trump threatened to punish Turkey if a US pastor was not freed.

"You cannot make Turkey take a step back with sanctions," Erdogan said in his first comments since relations soured after Trump threatened the measures on Thursday if Pastor Andrew Brunson was not released.

"The US should not forget that it could lose a strong and sincere partner like Turkey if it does not change its attitude," he was quoted as saying by Hurriyet daily.

"The change of attitude is Trump's problem, not mine," he told journalists during a visit to South Africa, calling the US threats "psychological warfare".

Relations between the NATO allies have worsened over the jailing of Brunson, who ran a Protestant church in the Aegean city of Izmir.

He was held in a Turkish jail for almost two years on terror charges but was placed under house arrest on Wednesday.

Trump on Thursday hit back at the move, calling for his immediate release and warning that the US would impose "large sanctions on Turkey for their long time detainment" of Brunson.

Ties had already been strained over multiple issues including Washington's support of a Syrian Kurdish militia which Turkey views as a terrorist group and the failure to extradite the Pennsylvania-based Muslim preacher Fethullah Gulen.

Erdogan in September suggested Turkey could free Brunson if the US handed over Gulen -- an offer brushed off by Washington.

Ankara accuses Gulen of ordering the 2016 failed overthrow of Erdogan, a claim he strongly denies.

The Washington Post on Friday reported a deal between Ankara and Washington was made to secure the release of a Turkish woman imprisoned in Israel in exchange for the freedom of Brunson.

Ebru Ozkan, 27, had been held for over a month by Israel on charges of passing hundreds of dollars to a "terrorist" group, but she returned to Turkey on July 16.

The newspaper said the agreement was "personally sealed" by Trump but fell apart when Brunson was transferred to house arrest.

Erdogan addressed the claims, stressing that Turkey had "never made Pastor Brunson a bargaining chip."

However, he said Ankara had asked for Washington's help in securing Ozkan's return home.

"But we didn't say: 'In return for this, we will give you Brunson'. Nothing like this was discussed," Erdogan insisted.

Brunson risks up to 35 years in jail if found guilty of charges of carrying out activities on behalf of two groups deemed by Turkey to be terror organisations -- the Gulen movement and the Kurdistan Workers' Party (PKK).

Brunson rejects the accusations while US officials have repeatedly insisted the pastor is innocent.

Temperatures were further raised when the US threatened in June to block the delivery of F-35 stealth jets to Turkey if Ankara buys Russia's S-400 air defence system.

But Erdogan suggested Turkey would not sit idly by if this happened.

"We told (the US): 'If you don't give them, there is something called international arbitration. We will seek international arbitration'," he said.

Another source of tension is the prison sentence of 32 months for deputy director general of Turkish lender Halkbank Mehmet Hakan Atilla convicted of plotting to help Iran evade US sanctions on billions of dollars of Iranian oil proceeds.

Turkish officials insist Atilla is innocent but Halkbank still faces a penalty from the US Treasury.

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Erdogan: Turkey Will Not Back Down Due to US Sanctions ...

ANKARA (Reuters) - Turkeys President Tayyip Erdogan said on Tuesday an Israeli law declaring that only Jews have the right of self-determination legitimizes oppression and shows that Israel is a fascist and racist country where the spirit of Adolf Hitler has re-emerged.

FILE PHOTO: Turkish President Tayyip Erdogan makes a speech during a ceremony marking the second anniversary of the attempted coup at the Presidential Palace in Ankara, Turkey, July 15, 2018. REUTERS/Umit Bektas/File Photo

Last week, the Israeli Knesset passed a nation-state law, angering members of the countrys Arab minority and prompting Turkey to accuse Israel of trying to form an apartheid state.

Speaking to members of his ruling AK Party in parliament, Erdogan said the law showed Israel was the most Zionist, fascist and racist country in the world, and called on the international community to mobilize against Israel.

The Jewish nation-state law passed in the Israeli parliament shows this countrys real intentions. It legitimizes all unlawful actions and oppression, Erdogan said.

There is no difference between Hitlers Aryan race obsession and Israels mentality. Hitlers spirit has re-emerged among administrators in Israel, he said.

Israeli Prime Minister Benjamin Netanyahu responded by saying that under Erdogan, Turkey was turning into a dark dictatorship, accusing the Turkish president of massacring Syrians and Kurds.

Erdogan said Israel had shown itself to be a terror state by attacking Palestinians with tanks and artillery, adding that the move would drown the region and world in blood and suffering.

The law, backed by Israels right-wing government, passed through parliament after months of political argument.

This is a defining moment in the annals of Zionism and the history of the state of Israel, Prime Minister Benjamin Netanyahu had told the Knesset.

The European Unions foreign affairs chief Federica Mogherini also expressed her concern last week, saying the law would complicate a two-state solution to the Israel-Palestinian conflict.

Turkey and Israel, former allies, expelled each others top diplomats in May during a row over clashes in which dozens of Palestinians were killed by Israeli forces on the Gaza border. However, the two sides continue to trade with one another.

The two countries have long been at loggerheads over Israels policy toward the Palestinians and Jerusalems status. Erdogan has called for a summit of Muslim leaders twice in the past six months after U.S. President Donald Trump decided to recognize Jerusalem as Israels capital.

Reporting by Gulsen Solaker and Tuvan Gumrukcu; Writing by Daren Butler; Editing by Dominic Evans and Angus MacSwan

Excerpt from:
Erdogan says new Israeli law fascist, Hitler's spirit re ...

ISTANBUL (Reuters) - Turkish President Tayyip Erdogan said Turkey will stand its ground after U.S. President Donald Trump threatened to slap sanctions on Ankara if it does not free an American pastor, broadcaster Haberturk reported on Sunday.

FILE PHOTO: U.S. President Donald Trump and Turkish President Tayyip Erdogan gesture as they talk at the start of the NATO summit in Brussels, Belgium July 11, 2018. REUTERS/Kevin Lamarque/File Photo

The friendship between the United States and Turkey is on the line in this dispute, Erdogan was quoted by TRT Haber and other media.

We will not take a step back when faced with sanctions, Erdogan is quoted as saying. They should not forget that they will lose a sincere partner.

American pastor Andrew Brunson, who was transferred to house arrest this week after 21 months of detention in a Turkish prison, has worked in Turkey for more than two decades.

Brunson has been accused of supporting the group Ankara says was behind a failed military coup in 2016 and Kurdistan Workers Party (PKK). The pastor, who has denied the charges, faces up to 35 years in jail if found guilty.

Diplomats have been working to settle the tense dispute and on Saturday U.S. Secretary of State Michael Pompeo discussed the status of the pastor with Turkeys Foreign Minister Mevlut Cavusoglu, the State Department said.

Writing by Ezgi Erkoyun in Istanbul and Patrick Rucker in Washington; Editing by Sandra Maler

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Erdogan: Turkey will stand its ground faced with U.S ...

At least the "potato crisis" seems to be over since prices are falling again. But recently a kilo cost up to seven lira (1.25, $1.50), four times more than it cost a year ago. The prices for onions, tomatoes and other staples have also risen sharply.

Inflation is now an everyday part of life and can be felt everywhere. Its effects can be seen while shopping, at the gas station and in increasing rents.

"Everything is getting more and more expensive. There are many things I can't afford anymore let alone a holiday," complains a customer at the fruit and vegetable market in Istanbul's Sisli district.

Read more:Recep Tayyip Erdogan: The sultan of 21st-century Turkey

Artichokes, fresh mint, melons, grapes, the commonfigs all of themfrom farmers in the region. The selection is great, but prices fluctuate. "We now pay double for many foods," says a man at the neighboring stand. "The government is to blame and it must finally do something."

The price of food at this Istanbul fruit and vegetable market is on the rise

A downward spiral

The Turkish economy has recently grown by 7.4 percent, a rate which is even higherthan that of the Chinese economy. But at the same time the current account deficit is rising, the lira has lost more than a fifth of its value against the dollar and the euro since the beginning of the year and inflation is at a record level of 15 percent.

The economic situation has not been this bad in years. Recently, the rating agency Fitch downgraded Turkey's creditworthiness further into junk territory: the credit rating of the country is now BB with a negative outlook. This puts Turkey on par with countries like Guatemala or Costa Rica.

But President Recep Tayyip Erdogan seems to worry little aboutrating agencies.And after his reelection in June, he is now more powerful than ever. Now he is head of state, head of his party and head of the government all in one person.

He is promising his country a glorious future. "Our economy is on the right track and everyone can see how we invest," the Hurriyet newspaper quoted him as saying recently. Turkey will soon become "one of the ten largest economic powers in the world," Erdogan promised after his swearing-in for his current term.

Central bank under pressure

Even during the election campaign, Erdogan announced that he would strengthen his control over monetary policy in the future. Investors are worried about the independence of the Turkish central bank. Only last week, the president issued a decree allowing him to single-handedly appoint the bank's two highest officials. In addition, the decree reduces their terms inoffice from five years to only four years.

"Not only the central bank but all the institutions and individuals are under the sway of Erdogan. In the sense that we don't have any freedoms or we can't even take the simplest decisions without hispermission," says economist Atilla Yesilada. "If the central bank would not be controlled by Erdogan it would have reacted at least two years ago, when inflation started rising, by raising interest rates."

Economist Attila Yeilada

Most economists viewinterest rate increases asan important tool to stabilize a currency. But according to Erdogan's very own economic theory, higher interest rates are "the cause of all evil" and jeopardize economic growth.

For this reason, the president regularly insists on not raising base interest rates. The next official interest rate decision is scheduled for July 24, and it is still unclear how the central bank will react this time.

Son-in-law to the rescue

Erdogan's tendency to seize all decision-making power has deeply unsettled markets. Now it is up to 40-year-old Berat Albayrak to regain the business world's confidence.

As well as beingminister of finance and treasury, Albayrak is also married to Erdogan's daughter. He studied business administration in Istanbul and the US, and was energy minister in the last cabinet. Nevertheless, he is considered a relatively inexperienced politician who has simply been given a key position by his father-in-law.

Up to this point the chief economic advisor had been former Deputy Prime Minister Mehmet Simsek, an ex-Merrill Lynch economist who was considered investor-friendly and someone who even dared to contradict Erdogan. Now since the office of prime minister has been abolished, he will no longer be in the cabinet.

Read more:Turkey lifts state of emergency, but fear of repression lingers

But son-in-law Albayrak has promised fiscal discipline, structural reforms, an independent central bank and measures against inflation. "In normal times, I would give him the benefit of doubt. He should be given time to prove himself," says analyst Atilla Yesilada. "Unfortunately, these are extraordinary times At a time like this you need experienced pilots flying the plane."

Albayrak must now deliver, says Yesilada, otherwise Turkey will face a financial crash. "By the fourth quarter of this year, the economy will start shrinking, unemployment will rise from 10 to 12 percent, the Turkish lira in best case scenarios would loose another 10 percent against the dollar and we will have a spate of bankruptcies in the corporate sector not large corporations, but among small and medium enterprises," predicts the analyst, adding that the country will more than likely soon have to ask the IMF for financial help.

This scenario would not only impact Turkey itself but also have consequences for Europe, because many Turkish companies are highly indebted to European financial institutions.

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Is Erdogans Turkey on the edge of a crash? | Business ...

(Rami Khoury/Al Bawaba via AFP/FILE)

By Ty Joplin

Before Recep Erdogan was Turkeys president, he was the mayor of Istanbul. We are proud of him, his former Istanbul barber said of Erdogan. Hes not only a leader, but a world leader.

His barber is right: Erdogan has shaped the political system of Turkey around him, and has been trying to market himself as a world leader for Sunni Muslims around the world. With his recent re-election, a project to grant himself sweeping powers and recent international moves, Erdogan is closer than any previous leader at reconstructing a neo-Ottoman power out of Turkey, even if it implodes the countrys economy and any semblance of democracy it once maintained.

Even though Turkish voters think many politicians within Erdogans own party, the Justice and Development Party (AKP), are corrupt and ineffective, Erdogans own reputation appears immune to such skepticism.

Both Turkeys domestic political sphere and foreign policy objectives abide by one idea: Erdoganism.

Erdoganism Inside Turkey

Erdogan has all but ensured that Turkeys political system revolves around him personally.

In April, 2017, the AKP launched a referendum that would transform Turkey towards a fully presidential system, getting rid of the Prime Ministers position and placing more power than ever in the hands of the President.

By a narrow margin (51.4 percent to 48.6 percent), the referendum passed and Erdogan was given a wide-range of newfound powers.

With the new changes, the president is becoming head of government as well as head of state, absorbing all authorities and responsibilities of the prime minister, reads an article on the changes from the state-owned TRT World.

The referendum all but eliminated the ability of opposition parties to block the political agenda of Erdogan. It even gives the president the abilities to pass his own laws, which the referendum calls decrees.

On July 9, the referendums changes went into effect.

Erdogan speaks with supporters after a failed military coup in 2016 (AFP/FILE)

Dont be misled by the term decree those decrees amount to laws. Parliament has lost its legislative prerogative, warned Abdullatif Sener, a former deputy prime minister of Turkey.

While on paper, the law states that parliament has the ability to override any presidential decree, that clashes with their own, it remains to be seen whether this power will be exercised as parliament, currently in the hands of the AKP, would likely never pass bills that clash with their leader, Erdogan.

The referendum was passed with the implicit understanding that Erdogan would win the June, 2018 national election and formally hold onto the reins of power. He did exactly that, winning about 53 percent of the votean outright majority.

One of Erdogans biographies is called the New Sultan, using an historic term to refer to a ruler. In Turkey, the Sultan was once used to refer to the ruler of the Ottoman Empire. Now that Erdogan has formally situated himself in the central seat of power, brushing off coup attempts and purging anyone who dissents, he is setting his sights on building a 21st century empire.

The latest estimate is that Erdogan has jailed over 160,000 dissidents and purged nearly 20,000 civil servants from the government on his quest to centralizing his power.

Sultan Erdogan, the Neo-Ottoman

As Turkeys economy began to expand, surging an astounding 7.4 percent in 2017 alone, Erdogan began to flirt with regional ambitions that encompassed much of the Sunni Muslim world.

Today, Turkey is a player in the Levant, GCC, North Africa and as far as Sudan and Somalia, said Mohanad Hage Ali of the Carnegie Middle East Center in an interview with Al Bawaba.

In other words, Turkey is the regions Sunni Iran.

While Turkey was riding the wave of its economic surge, it announced that it would deploy 60,000 troops to four separate military bases around the world.

Apart from his protracted intervention in Syria, where he now occupies a solid chunk of the countrys northwest, his ambitions have expanded beyond the neighboring countries.

Turkish troops parade (AFP/FILE)

In 2015, Turkey established a military presence at the Tariq bin Ziyad military base in Qatar before sending elements from its air force to the Al Udeid Air Base in southern Doha in 2017.

According to Turkish state-backed media, At least 1,000 pilots will be trained annually at the center that was built by Turkish defense contractor HAVELSAN at Al-Udaid.

Both bases in Qatar serve to entrench Turkeys strategic and economic ties to the Gulf, but it has sent thousands more troops into Africa.

A little-known port city in Sudan has become a focal point of Erdogans project to expand his influence into northern Africa.

Sudan and Turkey agreed to let Turkey completely rebuild the port city, which was once a trade hub in the Ottoman Empire. The deal includes a plan to build a dock to maintain civilian and military vessels, Turkeys Foreign Minister Ibrahim Ghandour said.

Saudi Arabia and Egypt both warned that the Turkey-Sudan deal would give Turkey the ability to establish a military foothold in Sudan. Those concerns turned out to be true.

Sudan leased the city to Turkey for 99 years, and many of the development plans involve ensuring the ability for Turkey to soldiers and a naval base on the port. In fact, the 99-year lease is so long that it's safe to say Turkey has essentially bought control of the port city from Sudan.

Though the rumors of Turkish soldiers stationed in Suakin have been denied or rebutted, experts and officials are careful to say that if there are Turkish soldiers there, they are meant to serve as anti-terrorist security forces.

Erdogan has also sought to capture Somalia in his sphere of influence, funding a wide array of development and security projects in the capital, Mogadishu.

"Ankara aims to help Somalia rebuild its public institutions that have been ruined since 1991. Turkey will train Somali soldiers here so that the Somali army can recuperate, Olgan Bekar, Turkeys ambassador to Somalia told TRT World.

Turkey's Erdogan opens a new Turkish Embassy in Somalia, (AFP/File)

Turkeys entrance into Somalia includes training and equipping Somali security forces in addition to establishing its own facilities capable of housing thousands of soldiers. It is Turkeys biggest overseas military base, and comes at a time when Somalia is running out of partners for its war against militant groups in the country.

Erdogan is positioning himself to be an indispensable ally of Sudan and Somalia; both of which give him access to critical trading ports and access to the Red Sea.

Erdogan has also gave overtures rhetorically linking his political empire to the welfare of Sunni Muslims around the world including places like Malaysia and the Philippines. And now as the West grow increasingly wary of him and his authoritarian ways, Erdogan will increasingly concentrate on his growing ties in Eurasia and Asia, explains Kamal Alam for the Nikkei Asian Review.

All this is to say that Erdogan dreams of shaping modern day Turkey into a neo-Ottoman force is slowly coming true, even if that means sacrificing any semblance of democratic legitimacy.

Notwithstanding his current political dominance, the deteriorating state of the economy is his Achilles heel and the biggest threat to his currently unrivalled leadership. says Fadi Hakura of Chatham House.

Turkeys economic surge has begun to stall, and the economy is imploding. In the face of contraction and double-digit inflation, Turkey is drifting into a stagflation crisis that threatens to upend any effort from Erdogan to establish himself as a world leader.

But even as his country remains on the brink thanks to unorthodox monetary policies Erdogan engineered, many are convinced that Erdogan is precisely the leader they need to pull him out.

Turkish people who voted against Erdogan did so to deny him one-man rule; for them, it was a vote for democracy. But for those who voted for Erdogan to receive broad powers and be re-elected President, they seem to care less about democracy and more about strength: Erdogan, to many, projects strength.

Weve entered a very peculiar period, which I cannot define as a democracy, Sener, the former deputy prime minister, posits.

We might speak of a dictatorship in Turkey in the future.

This article is part of an ongoing series investigating Turkey's geopolitical aims. Read more about this:

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Erdogan: Turkey Has a New Sultan | Al Bawaba