TURKEY: CODEL DAVIS STRESSES COOPERATION IN THE

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 000152

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/25/2018
TAGS: PREL PGOV EFIN TU IZ
SUBJECT: TURKEY: CODEL DAVIS STRESSES COOPERATION IN THE
REGION


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Classified By: DCM Nancy McEldowney for reasons 1.4 b & d.


1. (SBU) Summary: During their January 10 - 12 visit to
Ankara, CODEL Davis met with Turkish Members of Parliament
(MPs),officials from the Central Bank, Ministry of Foreign
Affairs, and Treasury, and representatives from the Turkish
Union of Chambers and Commodities Exchanges (TOBB),Turkey's
leading business organization. CODEL Davis, which consisted
of Reps. Lincoln Davis, Marsha Blackburn, Nikki Tsongas, John
Barrow and Brad Miller, discussed Turkey's economy, EU
accession process, banking and financial institutions,
cooperation in Afghanistan, relations with Iraq, and Iran's
nuclear program. In return, Turkish officials, especially
MPs and MFA representatives, raised their concerns about the
status of Kirkuk and House Resolution 106. The meetings
reinforced the important and historical bilateral
relationship between the U.S. and Turkey and raised awareness
on both sides of the challenges facing policymakers. End
summary.

Dinner with Turkish MPs Focuses on Politics in Iraq
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2. (C) During a January 10 dinner with Turkish
Parliamentarians, several MPs expressed concern to the
Congressmen about the future of Kirkuk and the Turkmen
minority there and how control of the oil-rich province will
be decided. The Parliamentarians also raised House
Resolution 106 and the repercussions the passage of such a
resolution would have on U.S.-Turkish relations. The MPs
also discussed the future of Iraq and the importance of
battling the PKK there. Rep. Davis reinforced the message
that no terrorist should feel safe anywhere in the world and
that the U.S. is Turkey's ally in the fight against all
terror, including that conducted by the PKK. CODEL Davis
also raised U.S. concerns about Iran's nuclear program and
urged the MPs to use their influence in the region to ensure
that Iran does not gain nuclear weapons capabilities.

Central Bank, Treasury on Financial Services and Economy
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3. (SBU) On January 11, CODEL Davis met with Central Bank
Deputy Governors Mehmet Yorukoglu and Erdem Basci to discuss
monetary and fiscal policy in Turkey. The delegation learned
about the GOT's plan to move the Central Bank, Banking
Regulatory and Supervisory Agency, Capital Markets Board, and
two state-owned banks from Ankara to Istanbul in 2008. Basci
told the delegation about Turkey's successful campaign to cut
inflation from 70 percent down to 8.4 percent in just five
years, and the structural reforms underway in the Parliament.
The representatives and deputy governors compared the
Turkish and U.S. financial systems and found many
similarities, especially in banking supervision, auditing,
and the increased use of Internet banking in both countries.
The delegation was also hosted by Treasury Under Secretary
Ibraham Canakci, who gave them an overview of structural
reforms under way in Turkey. These include major changes in
the social security system, labor regulations, and tax
policy. During both meetings, the delegation learned of the
delicate balancing act in Turkey to keep inflation pressure
low, while still encouraging growth and expanded employment.

MFA Stresses Importance of Strengthening Cooperation
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4. (C) On January 11, CODEL Davis attended a luncheon hosted
by MFA Deputy Under Secretary Unal Cevikoz that included
representatives from the MFA's EU, Middle East, Caucasion
Affairs and Americas Departments. They commented on the
effectiveness of the U.S. troop surge in Iraq and its success
in lowering daily attacks and casualties. They thanked the
CODEL for U.S. support, including information sharing, for
Turkey's cross-border operations into Northern Iraq to target
PKK cells. Deputy U/S Cevikoz discussed the distinction
between ethnic Kurds, who live peacefully within Turkey's
borders, and the separatist PKK terrorist organization.
Others stressed the importance to Turkey of a peaceful,
stable, and unified Iraq and urged the CODEL members to work
to find a political solution in Iraq by the end of 2008.


5. (C) On the issue of House Resolution 106 on Armenia, the
MFA officials explained their historic ties with the country
of Armenia. Turkey was the first to formally recognize the
independent country of Armenia. They cautioned that actions
by foreign governments on the Armenian question make it
difficult for the Turkish Government to improve bilateral
relations with Armenia. They cited PM Erdogan's call for a
Turkish-Armenian historic foundation to research the issue
and the Armenian Diaspora's lack of interest in such a

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process. They asserted that Armenian-Americans are causing
the country of Armenia to suffer by refusing to allow Turkey
and Armenia to handle the issue independently of the
Diaspora's influence.


6. (SBU) CODEL Davis members urged the MFA officials to use
Turkey's influence in the region to assist in not only
securing a stable Iraq but also ensuring that Iran does not
develop nuclear weapons capabilities. They recognized the
important role that Turkey has played in Israeli-Palestinian
relations and the role it can play in the deteriorating
situation in Lebanon. They reiterated Turkey's strategic
importance in NATO and in international politics and
committed to continued cooperation.


7. (U) CODEL Davis did not have an opportunity to clear this
cable.

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WILSON