Prime Minister Recep Tayyip Erdoğan has rejected mounting Western criticism over a record number of imprisoned journalists in Turkey, while the top American diplomat in Turkey has confessed he was still unable to understand why journalists and intellectuals were put behind bars.

Erdoğan argued the outside world was not aware they were involved in subversive and violent activities.

"It's hard for Western countries to understand the problem because they do not have journalists who engage in coup attempts and who support and invite coups," Erdoğan said late Wednesday at a reception marking the 25th anniversary of the Zaman newspaper.

Without giving a name, he said the jailed journalists included a person who had killed a policeman, and mentioned news stories that were used as evidence in a failed judicial bid in 2008 to have his Justice and Development Party, or AKP, outlawed.

However, United States Ambassador to Turkey Francis Ricciardone said he could not "understand" the situation.

"I do have to confess, I do not understand how in a country whose democracy has come so far and is so cherished by the people -- I don't think Turks will ever let go their democracy, I don't think you'll ever accept dictatorship in this country -- so how can there be intellectuals and journalists behind bars in a country that so values freedom? I simply do not understand," he told a group of Ankara bureau chiefs Wednesday.

Ricciardone made a similar critical statement in early 2011, shortly after his arrival in Turkey, and has been severely criticized by Erdoğan, who described the envoy as a "rookie ambassador."

"At the risk of being misunderstood: I said last year, 'anlamadım, anlayamadım' ('I do not understand, I am unable to understand'). I have to say that again. I say it respectfully," he said, drawing attention to the dilemma of the improvements in the nature of Turkish democracy in the last decade, supported both by the government and the opposition, and the increasing number of jailed journalists and intellectuals.

When asked to further comment on this dilemma that he failed to understand, Ricciardone said he has seen the incredible accomplishments of Turkish democracy in the last decade and has seen how the country has advanced not only economically, but in terms of physical, social and human infrastructure.

"I understand that explanation but I have heard leaders of your government express their own dismay about detentions of people for extended periods of time, when at least detentions seem unnecessary to government, to leaders of your state," he said, adding that every country has to figure out a balance between hate speech and pure freedom of speech, the envoy said.

"People should be free to say things that are stupid or even wrong and test them in the marketplace of ideas. They should be free to criticize, even with passion, and to say things that annoy or antagonize the government."

Reporters Without Borders Urge Referral of 'Genocide' Bill to Constitutional Council

Reporters Without Borders in Paris urged parliamentarians to refer the bill adopted on Monday to make it a crime to deny Armenian allegations on the Ottoman era incidents of 1915 to the Constitutional Council.

A letter by Jean-Francois Julliard, secretary general of Reporters Without Borders, said that parliamentarians must demand the bill's referral to the Council, because it was against freedom of expression and the Constitution.

"There are four key aspects of the law that disturb us: a conflict with the principle of the right to free expression, a lack of proportionality between the offence and penalty, a violation of parliament's competence and a lack of clarity in the wording," the letter said.

Referring to the statement made by one of the Council's previous presidents, Robert Badinter, the letter quoted Badinter as saying: "The French Parliament has not been empowered by the Constitution to determine historical fact."

The bill penalizes denial of the Armenian allegations with a prison term of one year and a fine of 45,000 euros.

French President Nicolas Sarkozy is expected to approve the legislations within two weeks.

Clinton: We Will Never Go Down 'Path to Criminalize Speech'

United States Secretary of State Hillary Clinton said she hoped the French were never going to go down that path to criminalize speech, speaking regarding the bill adopted by the French Senate to make it a crime to deny Armenian allegations on the Ottoman era incidents of 1915.

Replying to a question on the United States' stance regarding the French bill criminalizing the denial of Armenian allegations, Clinton said: "First, one of our great strengths is we do not criminalize speech. People can say nearly anything they choose, and they do, in our country. And so other countries, including close friends and allies like France, have different standards, different histories, but we are, I hope, never going to go down that path to criminalize speech."

"I think it's fair to say that this has always been viewed, and I think properly so, as a matter of historical debate and conclusions rather than political. And I think that is the right posture for the United States government to be in, because whatever the terrible event might be, or the high emotions that it represents, to try to use government power to resolve historical issues, I think, opens a door that is a very dangerous one to go through," she said.

The bill penalizes denial of the Armenian allegations with a prison term of one year and a fine of 45,000 euros.

Foreigners Leave Turkey Amid New Residence Law

A new law that will make it more difficult for foreigners to continue living in Turkey without a residence permit has prompted an exodus of Georgians and Armenians who want to leave the country before new regulations go into effect Feb. 1.

"I am pleading to Turkish Prime Minister [Recep Tayyip] Erdoğan [to prevent] this law from going into effect. I am feeding and educating my kids with money that I earn here," said Sofiya, a 47-year-old Georgian citizen, as she was getting ready to travel back to Tbilisi.

"The Law of Foreigners' Residence and Travel in Turkey" has also put the Emniyet Bus Terminal in Istanbul's Aksaray district into a frenzy, as Georgians and Armenians who are mainly employed in house labor, babysitting and patient care are rushing to leave Turkey to avoid incurring any penalties.

"Bread has no country. Wherever there is bread, we, the economically vulnerable people, go there. We have to live and support our families. We have no other chance," Hayganuş, an Armenian citizen, said in reference to the tough rhetoric employed by Erdoğan in response to a draft bill on Armenian genocide allegations that came before the House of Representatives in the United States in 2010.

Until now, many foreigners have done "visa runs" to neighboring countries, exiting Turkey after their 90-day visa ends and then immediately re-entering with a new 90-day visa. However, the new law prepared by the Labor and Social Security Ministry will only allow foreign citizens entering the country with a tourist visa to stay in Turkey for three months, after which time they will be obliged to wait for another three months abroad before they can return.

Authorities have provided one convenience for foreign workers, however, in recognition of Armenian, Kyrgyz and Gagauz home laborers. Such house workers will pay the same premiums as a Turkish citizen and will be allowed to continue working even if a Turkish citizen demands the same job.

"Those employed in house labor will continue working by paying premiums like a Turkish citizen," Labor and Social Security Minister Faruk Çelik said.
As many Armenian, Kyrgyz and Gagauz residents in Turkey work in such services as home labor and patient care, they will also be able to take advantage of this provision.
Foreign citizens who arrive in Turkey by means of a tourist visa and later obtain a work permit will be allowed to extend their stay in the country for a year or more, Çelik added.

Foreign workers, however, will then be obliged to pay a hefty premium of 400 Turkish Liras as well, while they will also be barred from obtaining employment in a sector where Turkish citizens demand work.

Prime Minister Tayyip Eroğan last year expressed that some 170,000 Armenians live in Turkey. The Armenian Foreign Ministry, however, said only 15,000 Armenian citizens currently reside in Turkey.

U.S. Envoy to Turkey Says Country Must Face Ghosts of Past

Turkey must deal with the ghosts of its past if it wants to become one of the world's top 10 economies by 2023, Washington's envoy to Ankara said following controversy over a French bill to criminalize denials of Armenian genocide claims.

"Every great country has brilliant moments of which we are proud in our pasts and moments of pain," Francis Ricciardone, the United States ambassador to Turkey, told a group of Ankara bureau chiefs Wednesday. "We think that historians need to grapple with this in an open and honest way so that you can come to a full and frank acknowledgement of what happened. We believe that you are beginning to do that."

The ambassador's statement comes amid deep Turkish-French conflict over a law penalizing the denial of the 1915 events as genocide in France; similar attention over the claims have affected Turkish-U.S. ties almost every day before April 24, the day Armenians commemorate the events.

"We like to see our friends get along and we hope that you will overcome this dispute," Ricciardone said without commenting on the nature of the French legislation. Instead, he reiterated Washington's objective of launching a new dialogue process between Turks and Armenians.

"There needs to be a conversation. You need to get the historians together on both sides," he said. "I've been glad to see since I've come back to Turkey this past year that there is much more public conversation and debate. It's no longer a closed box.

"Turks have greater confidence now to look into the past and to a painful chapter and decide what it means. There is more contact between Turks and Armenians to wrestle with this terrible period of time. So we support that and we hope you will arrive at it," he said.

Journalists at the meeting also asked whether the U.S. had played a role in the Uludere tragedy, in which 34 people were killed in a botched air raid in southeast Anatolia after being mistaken for militants due to incorrect military intelligence. Opposition parties have blamed the U.S. for the killings, saying its Predators provide visual intelligence to the Turkish military.

"Regarding Uludere, I can say clearly and uncritically that the United States, both in general and in particular on the Uludere, does not get involved in Turkish targeting decisions. So we have nothing to do with the target selection in Uludere," he said. "A target selection is a question that's up to the Turkish side entirely. And certainly Turkey does have its own capabilities regarding targeting."

Touching on Iraq, the U.S. ambassador offered a different view from Turkey on the growing sectarian divide in the war-torn country in the wake of the U.S.' troop withdrawal.

"Their internal affairs are their internal affairs. We certainly respect them. We can't direct what they do. We never presume to do that. But we do support and encourage all sides to work together within the constitutional and democratic framework of the Iraqi state," he said, adding they were in close cooperation with Turkey.

"We want to see Iraq stay [united and] rise above sectarian differences and solve their problems in a political, peaceful and democratic framework established under their constitution," he said.

On Iran, Ricciardone said the only way to deal with Iran's controversial nuclear program was to push it to cooperate with the International Atomic Energy Agency through diplomatic tools, namely sanctions.

While noting that they understood that Turkey did not feel obliged to enforce unilateral sanctions by the U.S. or the European Union, Ricciardone said they were satisfied with Turkish banks and companies' response to those measures.

"We are satisfied that so far Turkey's banks … and companies are paying close attention to the EU and the U.S. diplomatic efforts to show Iran it has a positive choice or a negative choice. And we hope that Turkish companies will continue to pay close attention to those things. And I think Turkish government will do nothing to discourage them," he said.

On whether the U.S. would think about an intervention into Syria, the envoy said: "[The U.S.] is not at this time preparing any kind of intervention and that it would be better to first see how the Arab League and the United Nations will take the matter."

Deputy Prime Minister Rules Out Foreign Intel in Air Raid

Deputy Prime Minister Beşir Atalay has denied suggestions that intelligence supplied by unmanned United States aircraft led to the mistaken bombing of civilians on the Iraqi border last month.

"There was intelligence about activity at the border, but we know that no pinpoint intelligence was given that led to the operation in this incident. Claims about foreign intelligence are also inaccurate," Atalay told the TGRT television channel in reference to the Dec. 28, 2011, air raid near Uludere in which 34 civilians were killed.

Amid lingering questions over how the botched raid unfolded, main opposition leader Kemal Kılıçdaroğlu has suggested that the intelligence identifying the victims as Kurdish militants could have been supplied by a U.S. Predator aircraft or Israeli-made Heron drones on which the Turkish military relies in its fight against the outlawed Kurdistan Workers' Party, or PKK. Turkey's National Intelligence Organization, or MİT, has rejected responsibility for the blunder.

Atalay said Turkey's struggle against the PKK was making progress and coming closer to a definitive success.

"Turkey is nearing the end on the issue of terror. We must think in a broader, long-term framework, without looking at temporary … developments. We are considering just and lasting solutions [but] as long as there are people with guns, the security aspect will be always at the forefront," he said.

Atalay reported that more and more militants were turning themselves in and that the PKK was resorting to oppressive measures to prevent people from surrendering.

"The terrorist organization has created a punishment mechanism, a prison atmosphere, within itself," he said.

Atalay on Thursday chaired a meeting of the Anti-Terror Coordination Board to review the latest developments. Senior military officials, MİT chairman Hakan Fidan, national Police Chief Mehmet Kılıçlar, the Foreign Ministry and public order undersecretaries Feridun Sinirlioğlu and Murat Özçelik also took part in the meeting.

Turkey Would Not Have Let EU Come to Point of Crisis, Babacan Says

Turkish Deputy Prime Minister Ali Babacan said Thursday that had Turkey been a member of the European Union, they would not have permitted the EU to come to this point of crisis.

Speaking on a TV program in Davos, Switzerland on Thursday, Babacan said that the most important item on the agenda was the economic crisis in Europe.

"Things in Europe are getting tougher and problems are getting bigger. There is a need for urgent solutions of problems in Europe. This is an issue on top of our agenda in Davos," Babacan said. "Participants in the Davos meetings often mention Turkey and the rational steps being taken in our country. Such positive remarks on Turkey please us a lot."

Turkey, Iraq of High Potential for Trade

Turkish Customs and Trade Minister Hayati Yazici said there was a high potential in commercial and economic relations between Turkey and Iraq.

Trade volume between the two countries increased 18 percent in 2010, compared to 2009, Yazici, who attended a meeting with an Iraqi delegation in Istanbul on Thursday, said.

Import from Iraq to Turkey was $1.5 billion, and export to Iraq was $6 billion in 2010, Yazici said, adding that Turkey's export to Iraq in the first ten months of 2011 was $8.4 billion. Trade volume between the two countries exceeded $10 billion at the end of 2011.

Yazici said the sound basis, which Iraq would establish in economic and social areas, was important for the stability of the Middle East, adding that Turkey was ready to share its experiences with Iraq.

Turkey's Halkbank to Handle Legal Iran Payments

Turkish lender Halkbank will continue to handle customers' oil payments to Iran as long as they comply with international regulations, the bank's general manager said in the wake of fresh, unilateral United States and European Union sanctions.

Halkbank's dealings with Iran drew attention last year when Indian refiners disclosed they were channeling oil payments through the Turkish bank as their own central bank had shut its payment facility, fearing U.S. retribution.

The majority state-owned Halkbank is Turkey's sixth largest bank, based on unconsolidated assets, and has a representative office in Tehran.

It also processes payments to Iran by Tüpraş, Turkey's sole refiner and a unit of Koç Holding, the country's largest conglomerate, according to energy sector officials.

General Manager Süleyman Aslan denied there had been U.S. pressure to stop handling transactions, as the bank was not acting illegally. He said a decision to reject an application from another Indian refiner late last year was unrelated to its trade deals with Iran.

In an interview with Reuters, Aslan said "communication channels" with all sides, including the U.S., were open and that apart from India, the bank was not handling payments to Iran from any other third country.

He said decisions on whether to take business were based on banking rather than political criteria.

"We do not make any specific decision based on Iran or any other country. We have customers, and these customers approach us and we look at their transactions. This transaction may be in India, it may be in Iran it may be in another country," he said.

"If it is legitimate business, we will carry out the job within the framework of international regulations and international standard practice."

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