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Turbulence in Turkey

Ever since Fed Chairman Ben Bernanke hinted that the purchase of US government bonds is to be phased out (the famed “tapering”), emerging markets have been feeling the chill. Now that the u-turn is becoming a reality under Bernanke’s successor Janet Yellen, the turbulence is spreading from Brazil to Indonesia. Tightening monetary policy drives yields up in the US and is an incentive for investors to shift away from assets in the emerging world. The move has put a great deal of pressure on their currencies, stoked inflation and threatens to sap growth projections.

Turkey is a prominent casualty. It is highly dependent on financial flows from outside, not least because it’s running a high current account deficit – 7 percent of GDP in 2013. The Turkish lira has lost one third of its value against the dollar over a period of 12 months and 16 percent since mid-December as a corruption

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Serbia’s accession talks – where’s the drama?

In recent years we got used to seeing Greek top officials as heralds of doom and gloom but today Greek foreign minister Elefterios Venizelos had a pretty good reason to look cheerful. Not least because, as the holder rotating president of the Council of the EU (no, the Lisbon Treaty did not quite abolish that presidency), Greece could oversee the launch of accession negotiations with Serbia. A fellow Balkan country most Greeks sympathise with - for the right or wrong reasons. Ivica Dačić, Serbia’s prime minister, and Aleksandar Vučić, his deputy who is seen as the real powerholder in Belgrade, were equally jubilant. The EU’s reputation may have been in decline since the euro crisis broke out, but the Western Balkans are clearly the exception. Since coming into office in July 2012, Serbia’s coalition government did invest effort and political capital to make it to this point.  Today’s

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Germany votes: what does Bulgaria think?

In the fourth of this series viewing the German elections from elsewhere in Europe, we ask what the Bulgarians think about the vote. 

Germany’s elections are largely a non-issue in Bulgaria, where political life is consumed by a three-month long mass protest demanding the Socialist-led cabinet’s resignation. Germany is also absent on the main foreign policy issue that preoccupies Bulgarians: the war in Syria, which affects Bulgaria thanks to refugees crossing from Turkey. Politicians and pundits alike break spears unpicking the policies of Russia, UK, US, and France, but German foreign policy passivity keeps the country off the radar screen. That’s surprising, as Bulgaria has often taken clues on European matters after looking closely at Berlin. What is more, the centre-right government of Boyko Borissov, in power until March this year, courted Angela Merkel, extolling the virtues

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Sofia view: southern gas corridor goes TAP

A known unknown has been answered with respect to gas transit infrastructure in Europe. The Shah Deniz consortium, involving BP and Azerbaijan’s public company SOCAR amongst others, has decided in favour of the Trans-Adriatic Pipeline (TAP), connecting Turkey and Italy via Greece and Albania (and against the European Commission-backed Nabucco West project) as the preferred route to ship Caspian gas into the EU. The decision comes after SOCAR submitted a bid for DESFA, the company operating Greece’s gas grid which is tendered by the government.  (In related news, Gazprom gave up its bid for DEPA, the Greek gas trading company, reportedly under pressure from the European Commission.)

The choice for TAP is disappointing for the advocates of Nabucco – Austria, the Central European governments, Romania, and Bulgaria - which argued that it would bring about diversification away from

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Sofia view: Balkan enlargement isn’t dead

“The European Union might be going through times of introspection but enlargement still goes on, largely ignored by the bulk of Brussels watchers. While leaders are scrambling to re-energise growth and fight endemic youth unemployment across the Union, Croatia is making its entry as the 28th member state on 1 July. But that does not mean that the door will be closed once Croats are in. Starting with Montenegro which is also negotiating its accessions, other countries are poised to follow suit.

The past week offered even more reasons to be upbeat about the prospects of further EU expansion. On Friday (28 June), the EU Council endorsed the foreign ministers’ resolution to give Serbia green light to start accession negotiations by January. The momentous decision, ironically coinciding with the anniversary of the 1389 battle of Kosovo, acknowledges the progress scored by Belgrade in

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