Erdogan Gathers His Top Turkey Security Chiefs as Purges Spread

(Bloomberg) -- Turkey’s President Recep Tayyip Erdogan met with top security officials for the first time since Friday night’s thwarted coup amid a widening purge of state institutions, and has vowed to make an “important” announcement afterward.

Following a National Security Council meeting in Ankara that began at about 1 p.m., Erdogan will also gather with ruling AK Party government ministers as well as the full cabinet in a series of meetings that could last several hours.

Deputy Prime Minister Nurettin Canikli told BloombergHT television in an interview Tuesday that measures to be announced will include a “new framework in line with the constitution” for the prosecution of the coup plotters. Erdogan’s chief adviser Cemil Ertem told Anadolu news agency there’s no plan to impose capital controls, and Deputy Prime Minister Mehmet Simsek said on Twitter that policy steps taken will be “market friendly.”

The government’s crackdown in reprisal for the coup attempt has been swift and severe. Turkey has detained, suspended, fired or stripped the professional accreditation of around 60,000 people, according to Bloomberg calculations. Erdogan has blamed the foiled military intervention on supporters of U.S.-based religious leader Fethullah Gulen. As that purge extended to the country’s academic institutions on Tuesday evening, the lira weakened to within 1 percent of a record low.

Academics including university presidents were barred on Wednesday from traveling abroad until further notice, state-run Anadolu news agency reported, citing the Council of Higher Education. They have been told to “assess” academics and staff linked to Gulen. NTV said that presidents of four universities were removed from office. And 245 staff were fired at the Youth and Sports Ministry, it said.

Obama Call

The purges have unsettled Turkey’s allies and investors by raising concerns that Erdogan’s response may be an overreach that further destabilizes Turkish society and weakens its institutions. Erdogan has been seeking to consolidate power in the presidency since he was elevated to that office two years ago, and has indicated he believes the attempted coup vindicates his policies. Late on Tuesday, U.S. President Barack Obama, in a phone call, urged his ally to act in a way that was “consistent with the democratic” values of the Turkish constitution.

“We are witnessing a crackdown of exceptional proportions in Turkey at the moment,” Andrew Gardner, Amnesty International’s Turkey researcher, said in a statement. “While it is understandable, and legitimate, that the government wishes to investigate and punish those responsible for this bloody coup attempt, they must abide by the rule of law and respect freedom of expression.”

Moody’s Investor Services said Monday that it’s put Turkish debt on review for a possible downgrade from its Baa3 credit rating, already the lowest investment grade, because of the attempted coup and its potential impact on growth. JPMorgan analysts wrote in a note Wednesday that Turkish sovereign bonds worth $7.2 billion are at risk of forced selling if Turkey’s ratings are cut to junk.

The lira was trading at 3.04 to the dollar, compared with about 2.90 in the days before the attempted coup. Yields on Turkey’s 10-year bonds rose for the fourth day in a row to 10.12 percent.

Death Penalty

As the post-coup backlash gathers pace, European leaders have warned Turkey about re-instituting the death penalty, with French President Francois Hollande on Tuesday saying such a move would end Turkey’s European Union membership talks. The last executions in Turkey were in the mid-1980s and capital punishment was formally abolished in 2004.

The U.S.-Turkish relationship has been tested by recent events, with officials trading barbs in the last few days about Turkey’s request that the U.S. extradite Gulen, who has denied any involvement in the failed putsch. On Tuesday, the defense ministers of the two NATO countries spoke by phone and re-affirmed their commitment to fight Islamic State, the U.S. Defense Department said in a statement.

The coup attempt came with Turkey engaged in an escalating fight with Kurdish PKK rebels and unsettled by a series of major bombings claimed by Islamic State. Seeking to end speculation that Kurdish militant leader Abdullah Ocalan had been harmed during the military uprising, Turkey’s Justice Ministry told NTV that he was “in good condition.”

--With assistance from Taylan Bilgic and Constantine Courcoulas To contact the reporters on this story: Isobel Finkel in Istanbul at ifinkel1@bloomberg.net, Gregory Viscusi in Paris at gviscusi@bloomberg.net. To contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net, Mark Williams, Stuart Biggs