Monetary Policy to change according to Sweden's NATO membership decision

"In the age when wearing a crown used to bring discipline, we find ourselves questioning the accuracy of this saying, perhaps even a thousand years old. Countless examples of individuals assuming authority and responsibility without showing any discipline can be observed everywhere – in states, institutions, political parties, and across the spectrum. The world is experiencing a profound leadership crisis.

In the path leading to the disorder of the new world, there is a sense that even democracy will be questioned. Capitalism is in crisis, reaching the stage where capitalists exploit other capitalists. The world is on the verge of fragmenting into strategic autonomies. In such circumstances, it is essential to highlight Türkiye's exceptional position in this entire picture.

Just saying this much is enough: considering the defense investments and technological capabilities that Türkiye lacks, the terrorist project cooked up in its region would have already come to life. Under these conditions, Türkiye needs to establish a strategy; neither a friend-nor-foe strategy.

Just like the one established with Russia, a friend-nor-foe strategy should be pursued with the U.S. and NATO. This is likely to be the main strategy that Türkiye aims to implement in its relations with the U.S. and NATO, but if so, more fine-tuning is needed. Because it doesn't work the same way as with the Russians. The Russians are not demanding, but these ones are.

If Trump wins in the U.S. elections in November, it will be easier to strike a balance. We know from his previous term. It seems likely. Still, it will be multidimensional.

Of course, one end of the equation will depend on Sweden's NATO membership.

These two developments need to be superimposed. Parliament should not make a decision on Sweden before the U.S. elections, I maintain my opinion.

In this context, I will open a parenthesis; if remembered, Moody's had changed Türkiye's outlook from stable to positive. Last week, it changed the outlook for banks in the same direction. The credit rating and outlook for banks in liberal economies are not the same as for other companies. As a credit rating expert, I can say that this development regarding banks is not even newsworthy. I won't delve deeper into the connection in this article. I had addressed it before. The gray list is still there, and the real upgrade has yet to come...

I will evaluate the course of monetary policy based on the possibilities with Sweden.

First, it must be understood; if Parliament rejects Sweden's NATO membership, the first part of the strategy, neither a friend-nor-foe, will be completed, but the second part, nor foe, will be challenging. If Parliament accepts Sweden, then the second part, nor foe, will be complete, but holding back from the first part, nor friend, will be very challenging.

The change in monetary policy will depend on Parliament's decision on Sweden. It must change.

The change in monetary policy seems to be moving in the direction of relaxation if Parliament accepts Sweden's NATO membership. I'm not talking about rapid relaxation. This is already a base scenario. The current trajectory has been set in this direction. I want to make some warnings about the enthusiasm that will emerge.

If Parliament makes a decision in line with the expectations of the economic administration, there will be a fervent desire for a joyful rapprochement of capital flows. It is useful not to release this enthusiasm too much. A balanced approach will be beneficial. Because a plan is needed to counter the intense foreign competition that the real sector will face in the domestic market due to the exchange rate, and time needs to be gained for this.

Moreover, capital, after entering, may bring up new demands that will be uncomfortable after entry. A balanced attitude will prevent these demands.

If Parliament does not accept Sweden's membership, a more comprehensive plan will be needed in monetary policy. Because the prepared capital flow will not happen in this case. The real change will be seen in this possibility.

Know this; in such a possibility, the economic administration in Türkiye will not find another option but to be either ultra-orthodox or truly heterodox. The current monetary policy leans on a strategy that is half from us and half from the conjuncture. Both domestically and abroad, this strategy has been extraordinarily accepted.

Even the most orthodox, who would normally find this strategy irrational, supported it. But if the Sweden decision does not turn out as they hope, it will be seen how they all fully crossed over. (It is understood which motives they supported or will oppose.) Since half of the parameters have been adjusted in this two-way strategy, half of it will be missing, and they will camouflage it.

NATO is good, bad, has no harm, has little benefit, or has no benefit, has a lot of harm; I'm not saying any of these. It is wrong for economic actors to determine their approach to their country's economic policy preferences with a NATO-centric perspective when the atmosphere is heated, and I know that.

Orthodoxy is already Western, naturally NATO-centric. Accepting policies from the West is expected to bring capital flows from the West. The flow of capital from the East or elsewhere is independent of monetary policy.

This is why a friend-nor-foe strategy is needed. To balance both the West and the East... For both halves of the half to come from the West and half from the East...

By the way, a friend-nor-foe strategy, after the return of the first Turkish astronaut Alper Gezeravcı riding a dragon and his space companion, the Swede Marcus Wandt, can be more easily implemented.

Although space seems apolitical, it is not. Astronauts visit each other's homes, are hosted together in the Swedish presidential office and Beştepe, offer delight in delight, and take friendship photos together simultaneously. If Sweden takes a more sympathetic political stance, the equation will change. Türkiye can reduce the NATO membership of Sweden from a NATO issue to a bilateral relations level. This will make it easier to balance with NATO."