Recently, the beaches in Turkey appeared a patch of mucus (sea snot), which is increasingly spreading over the water. The widespread mucus layer on the Turkish coast causes serious damage to the country’s marine life and fishermen. (Source: Reuters) Sea snot is a green mud that is formed naturally when algae are over-nutriented due to hot weather and polluted water environment. The phenomenon was first detected in Turkey in 2007 and then in the Aegean Sea near Greece. The latest outbreak in the Sea of ​​Marmara near Istanbul is believed to be the largest in history. (Source: Reuters) Experts believe that the large amount of mucus that has appeared recently is due to a combination of environmental pollution and global warming, which accelerates the growth of algae that cause the slime. Meanwhile, President Erdogan said that the problem of untreated sewage being discharged directly into the sea was the cause of this outbreak of marine mucus. (Source: Reuters) When algae grow out of control in the spring, as we’ve seen this year, they block sunlight and cause declines, says biology professor at Istanbul University Muharrem Balci. oxygen for fish and marine life. (Source: Reuters) This mucous membrane covers the sea surface like a canvas. After a while, they sink, covering the seabed ecosystem and harming many species of creatures. When this process is over, they will appear to smell like a spoiled egg. This phenomenon can cause poisoning to sea clams and creatures such as crabs. (Source: Reuters) Professor Bayram Ozturk of the Turkish Marine Research Agency said that due to the overgrowth of the mucus layer, several species are endangered, including oysters, mussels and starfish. “This is a real disaster,” he said. (Source: Reuters) According to environmental engineer Cevahir Efe Akcelik, mucus could cover the sea during the summer if authorities do not take urgent measures. Studies show that mucus stays not only on the surface but also at depths between 25-30 meters. (Source: Reuters) Divers report that large numbers of fish and other species in the affected area are being wiped out by suffocation. This phenomenon has a significant impact on the lives of fishermen. Boats passing through the Sea of ​​Marmara had to navigate through the gray mud, while some fishermen were unable to fish because the mud clogs their engines and nets. (Source: Reuters) Mehmet Soyolcu (43 years old), a fourth generation fisherman in the Sea of ​​Marmara, said that in the past, it took two hours to pull a fishing net at sea, but now it takes ten hours, not counting the cost of fuel. materials and other operating costs. Every day, the operating costs are getting higher and higher, and the fish are less and less. (Source: Reuters) Some fishermen will raise prices to cover their losses, but that won’t help either because people fear the seawater might contaminate the fish in Marmara. At the fish market, more and more customers avoid buying fish and seafood since information about the mucus layer appeared. This makes the fishermen lose income from fishing, life becomes more difficult. (Source: Reuters) Istanbul, Turkey’s largest city with about 16 million inhabitants, and five other provinces, factories and industrial centers border the sea. As a result, this outbreak has had a severe impact on the ecosystem and fisheries in the region. (Source: Reuters) The Sea of ​​Marmara is a sea that stretches 281 km from the Northeast to the Southwest and is 80 km wide at its widest. This sea is connected to the Black Sea through the Bosphorus, also known as the Istanbul Strait in the Northeast. President Erdogan fears the problem will be very serious if the mucus spreads to the Black Sea. (Source: Reuters) The Turkish government has deployed a team of experts to examine the source of pollution in the sea. Workers are now trying to use nets to remove mucus, but their efforts have so far been largely ineffective. (Source: Reuters) Not only around the Sea of ​​Marmara, but the adjacent Black Sea and Aegean Sea regions were also affected by this mucus outbreak. (according to Reuters)

Istanbul’s people wear full masks. Photo: Reuters “From 19:00 on April 29 to 5 a.m. on May 17, a complete nationwide blockade will be applied. All offices and offices – other than those listed on the Ministry of the Interior’s list – will have to be temporarily closed. Residents are only allowed to move between cities if travel is proven to be required. Public transport will only operate at 50% capacity, ”Erdogan said. According to the President of Turkey, these measures are enacted to reduce the number of new cases of COVID-19 per day to 5,000 cases. During the blockade, schools and kindergartens will have to suspend operations and switch to online learning. Exams will be postponed. The evening and night curfew will still be in effect. Hotels will stop receiving reservations and apply strict quarantine measures. Earlier, the Turkish government announced a series of restriction orders during the first two weeks of April, but was unable to improve the situation. In recent days, the increase in the number of COVID-19 cases per day has reached 30,000-40,000 cases. Turkey recorded its first case of COVID-19 on March 10, 2020. The total number of COVID-19 cases in this country has exceeded 4.6 million. As many as 38,000 people have died from COVID-19.

From Angela Göpfert, tagesschau.de The next lira crisis is here. On Thursday, the Turkish currency fell to $ 0.1204 – a drop of 1.4 percent. The day before, the lira had lost 1.0 percent against the dollar. The losses against the euro are similarly high. These are truly extreme movements for the foreign exchange market, where fluctuations usually take place in the per mille range. The sharp fall in the lira follows an economic policy on the part of the Turkish president that is perceived as extreme on the financial markets. Once again, Recep Tayyip Erdogan unsettled the financial markets with drastic statements: Turkey is in a fight against a “triad of evil” consisting of inflation, interest rates and exchange rates, according to the head of state.

The Turkish lira is clearly on a downward trend against the US dollar.

Not the first Fed chairman to be laid off

It was only in March that Erdogan had the governor of the CBT central bank, Naci Agbal, dismissed by presidential decree after he raised the key rate from 17 to 19 percent. Less than three months earlier, Erdogan had promised to accept the “bitter pill” of high interest rates to curb the rapidly galloping consumer prices. Erdogan seems to have changed his mind. Because Agbal’s successor is Sahap Kavcioglu, a former AKP MP and proponent of low interest rates.

Monetary policy credibility ruined

Due to several changes in personnel at the top of the central bank, the lira had already lost considerable ground in recent months. However, experts doubt that a weakening of the central bank’s credibility is the right answer – and they also choose drastic words. Erdogan is risking “seeing another lira crisis,” warns Tatha Ghose, Commerzbank’s London-based foreign exchange market expert. With his “de facto ban on sustained high interest rates” he ruined the credibility of monetary policy.

Capital controls as a last resort?

Against this background, Turkey does not really have anything to counter the rapidly rising inflation. In March, the Turkish inflation rate was 16.2 percent. Erdogan then announced the goal of an inflation rate in the single-digit percentage range.

Consumer prices are a long way from Erdogan’s target of a single-digit inflation rate. Some experts are now counting on the introduction of capital controls as a last resort to stop the unchecked outflow of capital from Turkey. Comprehensive controls are unlikely to be expected, however, as Turkey is simply too dependent on foreign capital for that. In addition, a ban on the free movement of capital would completely ruin the confidence of the financial markets in Turkey. Support purchases of the lira on the foreign exchange markets are also likely to miss their target in view of Turkey’s extremely thin cushion of foreign exchange reserves.

Experts warn of a downward spiral

The weak Turkish lira poses immense dangers for the Turkish economy: “Devaluations of the lira are always important because the currency-related spill-over effect contributes significantly to the high Turkish inflation,” emphasizes foreign exchange expert Ghose. “Any movement, however inconspicuous, can trigger a new market spiral and complicate the situation.” As early as 2018, Nobel laureate in economics Paul Krugman warned of a “death spiral” for the Turkish economy. At the time, he also explicitly named domestic events as possible triggers, such as repeated attacks on the independence of the domestic central bank.

Paul Krugman warns of the risks of a decline in the lira. Image: dpa

First the financial markets, then the real economy

The direct consequence would be: The domestic currency rushes into the depths. This increases inflation, as many goods for expensive money have to be imported from abroad, which in turn increases the cost of business and the cost of living for many Turks. The decline in the lira is also making it more difficult to repay debts in foreign currencies. Many Turkish corporate bonds and loans are denominated in foreign currencies such as dollars or euros. There is the next downward step: Turkish companies go bankrupt. Then unemployment rises, domestic consumption falls – the crisis has a full impact on the real economy. The logical consequence: investor confidence continues to decline. This in turn puts the Turkish currency under greater pressure – and the downward spiral begins again.

Lira expiry without end?

Krugman’s warning is as relevant today as it was in 2018: then, as now, it was the “unconventional” monetary policy worldview of the Turkish president that created the expectation among market participants that sustained high interest rates would not be enforceable in Turkey. It is these expectations that weigh heavily on the lira. An end to the lira downward spiral – apart from short-term recovery phases – does not seem in sight for the time being. Experts such as foreign exchange market analyst Ghose expect the Turkish currency to decline further. According to his forecast, investors will have to spend ten lira for one US dollar in December 2021. However, this is more of a “symbolic” forecast as Turkey is currently venturing into uncharted monetary policy territory. This makes a rational exchange rate forecast virtually impossible.

IMF regime as a way out?

The fact is: the lira is currently trading at $ 8.26. The further “symbolic” downside potential for the lira by the end of the year is therefore a proud 20 percent. According to experts, the only possible way out to prevent such a scenario would be a rescue package from the International Monetary Fund (IMF). This could help restore the credibility of important institutions such as the Turkish central bank in the market. Erdogan has so far rejected such an IMF program because it would undermine his personal power.

Faruk Fatih Ozer, founder of cryptocurrency exchange Thodex. One of the largest cryptocurrency exchanges in Turkey declared that they no longer had enough financial capacity to continue operating, causing hundreds of thousands of investors to fear that they would have lost all their money poured into this exchange. Meanwhile, Turkish authorities are trying to locate the 27-year-old founder of the cryptocurrency exchange, who has fled overseas, Bloomberg reported. It is not clear how many customers of the cryptocurrency exchange called Thodex lost money in this case, and how much the total damage. In a statement sent from a secret location, Thodex founder and CEO, Faruk Fatih Ozer, promised to return the money to the investor and return to Turkey to face the public. refund after refund. However, the Turkish government has launched a blockade on Thodex’s accounts, and its headquarters in Istabul has been ransacked by police. According to Turkish media, the damage in this virtual currency exchange crash could reach $ 2 billion. A lawyer representing the victims said that the investment capital of about 390,000 investors had fallen into a “irreversible” state. However, through a statement posted on the company’s website, Ozer denied both numbers, saying that only about 30,000 investors were affected. Some Turkish officials see the incident as another reason to increase control of the cryptocurrency market. Over the past years, the rapid rise of virtual currency prices globally has been paralleled with many frauds and frauds related to exchanges. Mr. Cemil Ertem, a senior economic adviser to President Tayyip Erdogan, said that the Turkish government needs to act as soon as possible. “Patterns of pyramid fraud are emerging. Turkey needs to implement surveillance regulations that are both suitable to the domestic economic situation and in accordance with global developments”. Thodex is part of the virtual currency fever that attracts a large number of Turkish investors who want to find a “shelter” for their savings in the context of dizzying inflation and a lack of local currency rates. stability. In March, inflation in Turkey was 16.2%, 3 times higher than the 5% inflation target set by the Central Bank of this country. This year, the Lira rate has dropped 10% against the dollar, marking the 9th consecutive year of decline. On Wednesday, Mr. Erdogan revealed that the Turkish government has “burned” $ 165 billion of foreign exchange reserves in the past two years to protect the local currency rate, but has not brought the desired results. Concerns about inflation and exchange rate motivate the Turkish people to look for alternative investment channels, including virtual currency. On Friday last week, the value of virtual currency transactions in Turkey reached more than 1.2 billion USD, up 3 times compared to a week earlier, according to data from coingecko.com. Meanwhile, the average daily trading value of the Turkish stock market is only about $ 3.1 billion.

.