Turkey’s Erdogan says will not succumb to ‘blackmail’ by its Nato ally U.S.

Erdogan declared Sunday that businessmen who move assets abroad are committing “treason”, adding that his government should put an end to the practice.

Turkish President Erdogan said on Sunday that Turkey would not succumb to “blackmail” by the United States in the trial of a Turkish bank executive being charged with evading U.S. sanctions on Iran.

Already strained ties between NATO allies Ankara and Washington have deteriorated as Turkish-Iranian gold trader Reza Zarrab, who is cooperating with U.S. prosecutors, detailed in court a scheme to evade U.S. sanctions.

Zarrab has claimed Erdogan was linked to a scheme to help Iran avoid US sanctions by laundering Iranian funds from oil and gas sales through Turkish banks. It was the first time Erdogan had been implicated in the US criminal case over Iran’s violations of international sanctions.

Zarrab pleaded guilty last month to bank fraud and money laundering, and admitted to running the international scheme. He’s now testifying against a Turkish banker on trial.

Erdogan said Turkey’s dealings were in line with the decisions of the United Nations, adding that they were not against Ankara’s alliance with Washington.

“What have we done, for example? We bought natural gas from a country we have an agreement with so our citizens wouldn’t be cold in the winter. Like other countries, only the UN’s decisions bind us, and Turkey followed them to the dot,” he told members of his ruling AK Party in a televised speech in the eastern province of Mus.

Over three days of testimony, Zarrab has implicated top Turkish politicians, including Erdogan. Zarrab said on Thursday that when Erdogan was prime minister he had authorized a transaction to help Iran evade U.S. sanctions.

Also read: Erdogan says there’s a ‘dirty scenario’ to destroy the Islamic world

Ankara has cast the testimony as an attempt to undermine Turkey and its economy, and has previously said it was a “clear plot” by the network of U.S.-based cleric Fethullah Gulen, who it alleges engineered last year’s coup attempt.

“This case is nothing more than the 17-25 December plot being carried across the ocean. Excuse us, but we will not succumb to this blackmail,” Erdogan said, referring to 2013 leaks about alleged government corruption which were blamed on his opponents.

“They wish to obtain the results they could not in the past in our country, with the same mastermind, material and scenario thousands of miles away… They are doing it with FETÖ [Fethullahist Terrorist Organization]. You will not be able to deceive us, you should know that,” Erdogan said.

“They aggravated the PKK [outlawed Kurdistan Workers’ Party] for that. They put FETÖ to the front and sent Deash [Islamic State of Iraq and the Levant – ISIL] to our country and even now they are using the person who is the head of the main opposition, also known as the main ‘treason party,’ for the same purpose,” he added, referring to the Republican People’s Party (CHP) leader Kemal Kılıçdaroğlu who has recently alleged that the president and his relatives had off-shore accounts.

Meanwhile, Erdogan declared Sunday that businessmen who move assets abroad are committing “treason”, adding that his government should put an end to the practice.

“I am aware that some businessmen are attempting to place their assets overseas. I call on the government not to authorize any such moves, because these are acts of treason,” Erdogan said in televised comments to party members in the eastern town on Mus.

The Turkish president did not name names, but his comments came two days after Turkish prosecutors ordered the seizure of assets of gold trader Zarrab.

The Istanbul public prosecutor said the assets of Reza Zarrab and his family would be confiscated as part of a probe, the state Anadolu news agency said.

The Hurriyet daily said the order affected Zarrab and 22 others, including his daughter with Turkish pop star Ebru Gundes.

There are fears in Turkey that a guilty verdict in the Zarrab case could lead to possible sanctions on one or more Turkish banks, spelling bad news for the country’s fragile economy. Turkey’s economy is suffering badly amid the country’s political uncertainty. Investors have lost confidence, tourists are staying away and the lira is rapidly losing value. The economy had grown at an annual average real GDP growth rate of 5.6 percent from 2003 to 2016.

And, as the GDP levels increased to USD 857 billion in 2016, up from USD 236 billion in 2002, GDP per capita soared to USD 10,807, up from USD 3,581 in the given period.

The visible improvements in Turkey’s economy also boosted foreign trade. Exports reached USD 143 billion by the end of 2016, up from USD 36 billion in 2002, while tourism revenues, which were around USD 12.4 billion in 2002, exceeded USD 22 billion in 2016.

The macroeconomic scenario of Nato ally is now changing though– since a year and a half.

The country’s gross domestic product, which grew by 9 percent at one point under Erdogan’s leadership, saw a drop of 1.8 percent in the third quarter of 2016 relative to the same period in 2015. In December, unemployment climbed to 13 percent, which is the highest level in seven years. And the Turkish lira is at an historic low against the dollar, which has put companies that hold debt in US dollars in a tight spot.

Although Erdogan has not yet responded to the courtroom claims, Erdogan has dismissed the case as a politically motivated attempt to bring down the Turkish government, led by Gulen and his “co-operators overseas”.

Turkey has repeatedly requested Gulen’s extradition, but U.S. officials have said the courts require sufficient evidence before they can extradite the elderly cleric, who has denied any involvement in the failed coup.

Gulen has lived in self-imposed exile in Pennsylvania since 1999.

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