Turkey: Fate hanging on constitutional referendum - Standard Chartered

Philippe Dauba-Pantanacce, Senior Economist at Standard Chartered Bank, explains that Turkey will vote on 16 April on a referendum to change the ceremonial presidential role into a seat of full executive power with limited oversight from parliament.

Key Quotes

“The change proposes to make the president the head of the executive branch (while suppressing the prime minister’s role). The president would be allowed to issue decrees with the force of law; be able to call general elections; and appoint or terminate missions of high-level officials, including deputy presidents and ministers. He would also directly appoint 12 of 15 judges of the constitutional court.” 

“The Venice Commission – the custodian of constitutional probity across Europe – warned in its 10 March report that the proposed changes posed a “danger of degenerating into an authoritarian rule”. The Council of Europe’s assembly had earlier called for Turkey to be placed under ‘formal scrutiny’ through a monitoring committee that looks at respect for fundamental freedoms, rule of law and democracy. The committee warned that the new constitution would “undermine constitutional checks and balances, the separation of powers and the independence of the judiciary”. Concretely, a ‘yes vote’ could force the EU to formally question the status of the accession process which, despite its moribund state, has continued to play a role in anchoring Turkey’s economic and institutional direction for the past 12 years.” 

“A ‘no’ would likely trigger early elections and change little in the current balance of power, but would prolong political uncertainty. A tight ‘yes’ could have the same outcome. In both cases, the Justice and Development Party (AKP) would hope to win a bigger share – possibly a super-majority – in the parliament through snap elections.”

“Portfolio investors could continue to be agnostic on political developments as long as the central bank continues its relatively tight policy and the economy shows resilience. Longer-term (FDI) investors in the real economy, who are more impacted by institutional capacity and integrity, will be watching the poll much more closely.”