Saturday July 16, 2016
When we described the aftermath of Turkey's failed, and painfully disorganized military coup attempt, we asked rhetorically, "Who wins?" To which we answered: "Why Erdogan of course. As he said during a press conference upon his arrival back in Istanbul in the early Saturday morning hours, the coup is an opportunity to "to purge the military." Erdogan also vowed to exact "the highest price" from the perpetrators. Or, to summarize, the military said Erdogan's power consolidation justifies the attempted coup; Erdogan said the coup justifies further consolidation of power."
Overnight, when analyzing the market's take of the coup, Renaissance Capital's Michael Harris said that "for markets to respond positively, we think Erdogan must go the reconciliation route, pledging not to hold elections for the coming year and committing to a consensus approach to constitutional change. More likely, though, Erdogan will seek to leverage this into a constitutional super-majority via a snap election."
Their conclusion: "A military coup has failed, but if Erdogan responds to this historic moment the wrong way, a democratic coup could be the result."
Not surprisingly, as of this morning, Erdogan is indeed responding to this historic moment the "wrong way." But before we get to that point, there are questions whether this coup was even that.