Istanbul- Turkey’s Constitutional Court has stripped President Recep Tayyip Erdogan of the power to remove the central bank governor before the end of his term, paving the way for the prospect of increased stability after years of policy change.
According to a decision published in the Official Gazette in Turkey on Tuesday, the Constitutional Court annulled a decree law issued by Erdogan in 2018, which allowed him to appoint and dismiss the governor of the Central Bank and his deputies.
The court said that this issue must be regulated by law, and that the decision will enter into force within 12 months, giving Parliament the opportunity to pass a law during this period.
The court also ruled to cancel the rule regarding the conditions for appointing deputy presidents of the Central Bank, which stipulated the appointment of 4 deputies with at least 10 years of experience by a joint decision for a period of 5 years based on the president’s proposal.
The court ruled, in a 482-page decision published in Turkey’s official newspaper on Tuesday, to amend Decree Law No. 703 issued on July 2, 2018, which grants the President of the Republic broad powers of appointment and dismissal, and abolishes the independence of the Central Bank.
The court justified its unanimous cancellation of the two rules relating to the appointment of the head of the Central Bank and his deputies, by stating that they were unconstitutional on the basis that they remained in a prohibited area that could not be regulated by presidential decree, and that the decisions taken by the Turkish president exceeded the purpose and scope of the authority to issue decrees.
Official denial
In an explanation of the decision, the Anti-Disinformation Center of the Communications Presidency in Turkey said that the claim circulated by some media outlets about “the Constitutional Court abolishing President Erdogan’s powers to appoint the head of the Central Bank and university presidents” is incorrect.
The Center reported that the Constitutional Court issued its decision on the request to cancel Decree Law No. 703, but the Supreme Court rejected the request to cancel the entire decree, and decided to cancel some of its provisions.
The center added that the decree included 2,375 rulings, and that the court only annulled some of these rulings. He stressed that the decisions related to canceling the appointment of university presidents and the head of the Central Bank came because of the necessity for these appointments to be made by law and not by decree, which means that the cancellation is not essential.
In this context, legal researcher Yunus Yildiz said in his interview with Al Jazeera Net that the Constitutional Court’s decision will enter into force within 12 months from today, if the Turkish Parliament does not approve a new law regulating the provisions that were objected to.
He added that the matter is now up to the Turkish Parliament to take the appropriate decision in this regard, indicating that the Parliament has the opportunity to address these provisions and issue legislation that is consistent with the requirements of the Constitution and avoid legal problems.
The opposition describes it as a late decision
In the first comment of the Turkish opposition on the court’s decision, the head of the Republican People’s Party, Ozgur Ozil, said during his speech before his party’s parliamentary bloc meeting on Tuesday, that the decision came late, and that many things had changed in Turkey until the issuance of this decision.
Ozil explained that the decision issued by the court was based on a lawsuit filed by the party in 2018 in objection to transferring the power to change the head of the Central Bank and his deputies directly to the president.
He added, “We in the Republican People’s Party were able to prepare a case file containing many of the decisions that were taken in Turkey despite their violation of the constitution, and we submitted it to the Constitutional Court within two months, but the court was not able to issue a decision in the case until 6 years had passed.”
According to Turkish media, Ozil intends to visit the President of the Supreme Constitutional Court at the head of a delegation from his party in the coming days.
For his part, the parliamentary representative of the ruling Justice and Development Party, Adam Yildirim, confirmed that the Constitutional Court’s decision refutes all the accusations leveled by the opposition parties against President Recep Tayyip Erdogan and his government regarding charges of tyranny and their circumvention of the laws.
Yildirim explained that the decision indicates that even presidents appointed by Erdogan in special periods and cases, and for reasons known to everyone, are now subject to review and their actions can be considered in accordance with the laws.
Impact on the economy
The position of Governor of the Turkish Central Bank has witnessed fluctuations and instability over the past years, and 7 presidents have rotated in it since 2006 until now.
During the past five years, President Erdogan dismissed a number of central bank governors, and appointed Turkish President Fatih Karahan last February to succeed Gaya Erkan, who spent less than 9 months in the position, which had a negative impact on the Turkish economy as a whole, and on monetary policies in a way. Private, according to followers.
For his part, economic researcher Muhammad Abu Alyan, speaking to Al Jazeera Net, believes that “the latest decision will have a positive impact on monetary policy in Turkey, giving the Central Bank more independence in making appropriate decisions.” He explained that this would help the bank overcome the crises it faced in recent years.
Abu Alyan pointed out that the continuation of the term of the Central Bank Governor for a period of 5 years will enhance the independence and stability of the bank and thus the monetary policy, enabling it to work more freely and achieve its goals, such as maintaining the stability of the general level of prices and combating inflation away from political, governmental and electoral pressures, specifically in the case of Turkey. .
In the international context, the International Monetary Fund and credit rating agencies consider the independence of the central bank to be one of the basic pillars of any country and any economic system.
Therefore, this decision will reflect a positive image of the independence of the Turkish Central Bank and the stability of its monetary policies, which will enhance the positive impact of the decision upon its implementation, which will reflect positively on the economy as a whole and improve those institutions’ view of the Turkish economy and their creditworthiness rating, according to observers.
Presidents of the Turkish Central Bank
- Fatih Karahan took office on February 2, 2023.
- Hafida Ghaya Arkan resigned on February 2, 2023.
- Shihab Cavoğlu, dismissed on June 9, 2023.
- Naji Agbal, dismissed on March 20, 2021.
- Murat Uysal, dismissed on November 7, 2020.
- Murat Çetin Kaya, dismissed on July 6, 2019.
