A history of political dysfunctionality, corruption, military coups, military conflict with a neighboring country, large current deficits and weak fiscal management.
Greece fits that description perfectly well, but so does Turkey. So why don’t we have a major crisis in Turkey and why is Turkey not on the brink of default when neighboring Greece is?
The answer is simple – It’s the exchange rate exchange rate regime stupid!
In 2001 Turkey was forced by a major crisis to abandon it’s managed/crawling peg regime and instead introduced a floating exchange rate regime and the Turkish central bank introduced an inflation targeting regime.
14 years later Turkey is still in many ways politically dysfunctional – in fact it has gotten worse in recent years – there has been rumours of plans of military coups, there has been major corruption scandals even involving the Prime Minister (now president Erdogan) and the governing AKParty…
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Utopia, you are standing in it! 
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