US threatens more Turkey sanctions if pastor not freed

The United States would levy more sanctions on the troubled Turkish economy if Ankara does not soon release a jailed American pastor, Treasury Secretary Steve Mnuchin warned on Thursday.

Deepening a spat that has rattled financial markets and threatened to split a long-standing defence and political alliance, Mnuchin on Thursday suggested the next spiral of tit-for-tat sanctions was coming soon.

"We have put sanctions on several of their cabinet members," Mnuchin told President Donald Trump in a cabinet meeting attended by the press, including AFP. 

"We have more that we are planning to do if they don't release him quickly."

Trump prefaced Mnuchin's remarks by saying that Turkey had not been a very good friend to America.

Referring to imprisoned pastor Andrew Brunson, Trump said "they have a great Christian pastor there, he's a very innocent man."

The threat comes as Turkey sought to reassure investors rattled by the sanctions-fuelled crash of the Turkish lira, insisting the country would emerge stronger.

Finance Minister Berat Albayrak, the son-in-law of President Recep Tayyip Erdogan, addressed hundreds of foreign investors from the United States, Europe and Asia via a conference call in a bid to soothe the markets.

The lira has clawed back some ground over the last two days - after losing almost a quarter of its value on Friday and Monday - but economists are warning that Turkey must urgently address its economic imbalances to avoid more troubles ahead.

"Turkey will emerge stronger from these (currency) fluctuations," Albayrak was quoted by state-run TRT television as saying during the conference call. 

Albayrak rejected seeking a bailout from the IMF, an option never seen as likely given that Erdogan often boasts of paying off Turkey's past IMF debts in May 2013.

The lira, which earlier this week traded at well over seven to the dollar, held onto its gains during Albayrak's discussion, trading at 5.7 against the greenback.

"We will turn this crisis into an opportunity," said Erdogan's spokesman Ibrahim Kalin after a cabinet meeting chaired by the president, saying measures taken so far had helped bring about a "rapid improvement process" over the last two days.

New markets

The latest came after Qatar, backed by Erdogan during the Saudi-led embargoes on the emirate in 2017, on Wednesday pledged to channel $15 billion direct investment into Turkey, a sign of burgeoning ties between the two countries. 

Analysts say Turkey is also likely to seek a more dynamic economic relationship with China and Russia, with whom ties have warmed considerably in recent years.

Turkey has also in recent days shown an interest in repairing ties with Europe after a crisis sparked by Ankara's crackdown on alleged plotters of the 2016 failed coup. 

Erdogan and his French counterpart Emmanuel Macron agreed in a phone call on Thursday to foster trade ties, a Turkish presidential source said.

Albayrak spoke on Thursday with his German counterpart Olaf Scholz and they agreed to "take steps in order to reinforce economic cooperation," Albayrak's office said. 

Meanwhile, Turkish courts have moved to defuse other legal cases that have irritated relations with the EU.

An Istanbul court allowed the release of Amnesty International's Turkey chair Taner Kilic on Wednesday, who spent more than a year in jail over alleged links to the 2016 coup bid.

And the day earlier, two Greek soldiers held by Turkey since March for illegally crossing the border were also freed.

Follow us on Twitter: @The_NewArab

Agencies contributed to this report.