Focus Shifts Away from Europe & US

While focus over the last year has mainly been on political events happening in Europe and America, there are important political events happening elsewhere that also require investor attention. One such event is the upcoming constitutional reform referendum being held in Turkey this coming Sunday.

?Recep Tayyip Erdo?an, President of Turkey

The referendum will ask the nation to decide whether to convert the ceremonial presidential role into an office with full executive power with limited oversight from parliament. This change would make the president the head of this executive branch, suppressing the prime minister’s role.  As head of the executive, the president would be able to issue decrees, call general elections and appoint or dismiss high-level officials – including deputy presidents and prime ministers. The president would also be able to directly assign 12 of the 15 constitutional court judges.

Risks Posed By This Change

In its March 1th report, the Venice Commission warned that such a change risks the “danger of degenerating into an authoritarian rule.” Previously, the Council of Europe’s Assembly had called for Turkey to be placed under “formal scrutiny” by a monitoring committee that keeps watch over respect for fundamental freedoms as well as the rule of law and democracy.

Turkish referendum poll shows ‘Yes’ vote at 51 percent https://t.co/Lm4SgdlNMM pic.twitter.com/7kCsIZWmz2

— Reuters Top News (@Reuters) April 13, 2017

This committee also warned that the new executive would “undermine constitutional checks and balances, the separation of powers and the independence of the judiciary”. As such, a “yes” vote could see the EU question the status of the accession process which has contributed to the anchoring of the country’s economic and institutional direction for the past twelve years.

Market Reaction to A “No” Vote