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Council of Europe takes action over Osman Kavala, adding to Turkey’s troubles

Europe’s top human rights body has launched disciplinary action against Turkey for its refusal to release a jailed businessman and philanthropist, striking a fresh symbolic blow to the country’s relations with the west.

The decision caps a difficult week for President Recep Tayyip Erdogan, marred by the resignation of his finance minister against the backdrop of a currency crisis that has seen the lira lose 40 per cent of its value against the dollar in the past three months.

The Council of Europe voted narrowly in favour of launching “infringement” proceedings against Ankara over the detention of Osman Kavala, who has remained behind bars even after an order by the European Court of Human Rights for his release.

The infringement process — likely to take at least 18 months, according to diplomats — could ultimately result in a suspension of Turkey’s voting rights at the Council of Europe, which oversees the ECHR.

It could even lead to the country’s expulsion from the Strasbourg-based institution that it has been a part of since 1950, severing a crucial link between Turkey and Europe at a time when its hopes of EU accession have faded.

Kavala, who has been detained for four years without any conviction, was at the centre of a recent row between Erdogan and 10 western nations after they signed a joint statement calling for his release. Turkey accused the Council of Europe of taking a “biased and selective approach” to enforcing ECHR judgments.

The decision came after Erdogan faced a tumultuous week on the domestic front, with mounting public discontent over the rising cost of living and growing accusations that his government was manipulating inflation data.

Kemal Kilicdaroglu, the leader of Turkey’s main opposition party, added to the pressures on the government on Friday by paying a visit to the statistical agency as new official data said inflation rose 21 per cent in November.

The latest figure was higher than analysts’ forecast of 20.7 per cent. But Kilicdaroglu, who stood outside the locked gates of TurkStat after officials refused to grant him a meeting, accused the agency of manipulating the data. “TurkStat has stopped being a state institution and has become an institution of the [presidential] palace,” he said.

The lira has suffered its worst plunge since a 2018 currency crisis after the central bank, acting under the orders of Erdogan, began cutting interest rates in September despite rising inflation.

The Turkish president has long believed, contrary to established economic orthodoxy, that high interest rates cause inflation rather than helping to bring it down.

He has insisted that more rate cuts will follow, flying in the face of warnings that, in a country heavily reliant on imported energy and raw materials, an ever-weakening lira could trigger a vicious cycle of currency depreciation and inflation.

Erdogan’s fixation on low rates had caused tension with his finance minister, Lutfi Elvan, who was the last remaining voice of economic orthodoxy within his cabinet. On Thursday, the Turkish president accepted Elvan’s resignation and replaced him with a loyalist who has praised his economic approach.

Shortly after Elvan’s departure, the central bank announced that it would return to the controversial policy of using its foreign currency reserves to support the lira, which hit a new record low of 14 to the dollar this week.

The central bank spent an estimated $1bn on the first intervention, according to Goldman Sachs. On Friday, it announced that it would sell foreign currency for the second time in three days.

The rating agency Fitch downgraded its outlook on Turkey from “stable” to “negative” and warned that sustained intervention by the central bank “will not by itself address the main causes behind the depreciation pressures”. It said the policy “risks further undermining the already weak central bank international reserves’ composition”.

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