Lira Surges As Trump Confirms Ceasefire Is Permanent, Will Lift Turkey Sanctions

Update (1145ET): President Trump has confirmed that the ceasefire will be permanent and that US will lift sanctions on Turkey.

Trump then confirmed: “now we’re getting out…let someone else fight over this long bloodstained sand.”

The Lira is spiking on the news…

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As we detailed earlier, EU governments have been fiercely divided over how to react to Turkey’s military incursion into northern Syria which commenced on Oct. 9 amid a US draw down from the region. One senior European diplomat described the situation to Reuters as “complete chaos”.

However, a draft resolution has been prepared this week, seen by Reuters, reportedly with the backing of all political groups in EU parliament, which urges “appropriate and targeted economic measures against Turkey” — and is expected to be adopted Thursday.

The targeted measures includes the following per Reuters:

• freezing of preferential treatment for Turkish agriculture exports to the EU.

• urges the suspension of the EU customs union with Ankara, a measure that would hit the 200-billion-euro ($222.3 billion) annual trade between the 28 EU nations and Turkey.

• and opens the possibility to reduce the nearly 250-million-euro yearly financing given to Ankara as part of its protracted process to become an EU member, an option backed by the center-right group.

One German center-right lawmaker Michael Gahler, who represents the largest political bloc in the EU assembly, said, “We demand that Turkey immediately withdraw from Syria.”

This latest push to slash economic preferential treatment for Turkey comes after a failed push led by Germany and France to impose an EU-wide arms embargo on Ankara, who were concerned Turkey would use European weaponry to conduct massacres and human rights violations against the Kurds. 

It also comes after President Erdogan has repeatedly threatened to flood European countries with millions of Syrian refugees if he couldn’t gain international backing for his ‘safe zone’ plan.

While the EU has called for a UN-administered zone in northern Syria, its parliament could additionally block any new EU funding for Turkey’s resettlement of refugees, estimated at 3 million people.