President Joe Biden and Turkey's President Recep Tayyip Erdogan meet on the sidelines of the NATO summit in Vilnius, Lithuania, Tuesday, July 11, 2023. (AP)

US President Joe Biden needed to score a win ahead of NATO's summit earlier this week, said renowned journalist Seymour Hersh, explaining that this win was Turkey's change of heart regarding Sweden.

Hersh stresses that US Democrats have been facing deep-rooted anxiety. That being the case, Biden, ahead of the NATO summit, needed to somehow depict an image that he still had a significant influence on the global level.

The image required was that the US President convinced Turkish President Recep Tayyip Erdogan to "rebuff Vladimir Putin" bringing him closer to NATO, once again. Hersh wrote, to succeed, Biden wanted Erdogan to announce he would support Sweden's bid to the alliance. But at what cost?

Hersh said "the public story for Biden’s face-saving coup" was to spin the real story and rather limit the deal options to "talk about agreeing to sell American F-16 fighter bombers to Turkey."

However, Hersh says he had "been told a different, secret story about Erdogan's turnabout." The journalist revealed that Biden offered Erdogan what he needed, an "$11-13 billion line of credit" which allegedly "would be extended to Turkey by the International Monetary Fund."

Hersh cited his source saying, “Biden had to have a victory and Turkey is in acute financial stress." Turkey was facing the aftermath of a devastating earthquake that killed over 100,000 people and damaged infrastructure across an entire province. Hersh's source explained that the Biden administration thought that "What could be better than Erdogan” who, under Biden's tutelage, “finally having seen the light and realizing he is better off with NATO and Western Europe?”

In Hersh's piece, he clarified underscoring that multiple Western news outlets reported that Biden reached out to Erdogan on Sunday, while he traveled from the US to Europe to begin his tour and attend a number of multilateral and bilateral events including the NATO summit.

According to the Times, Biden’s coup, as Hersh called it, would enable him to announce, while omitting any talk of bribery, that Putin got “exactly what he did not want: an expanded, more direct NATO alliance.”

Turkish Minister Simsek criticizes lira savings scheme

It is worth noting that in a meeting with foreign investors on July 7, Turkey’s Treasury and Finance Minister Mehmet Simsek aired severe disapproval of the country's main lira savings mechanism.

According to Simsek, the program was a bad idea and resulted in many obstacles.

The Turkish KKM program, or “FX-protected lira deposit accounts,” was initially put forward to encourage people to save in Turkish liras rather than foreign currencies by ensuring returns on lira deposits that account for any potential exchange-rate losses.

Since its inception amid a currency crisis in 2021, the total amount of money in the main deposit program has surpassed $100 billion. Because of the program's scale, it has the potential to put pressure on the lira — and the central bank's reserves — if a substantial number of savers opt-out and convert to dollars.

That makes it critical to encourage people to stay in the program, according to Simsek, who questions whether the government now has the capacity to cancel it.

Earlier this week, Turkey's ruling party submitted legislation that shifts the program's expenses to the central bank, rather than the Treasury. Bloomberg reported on Monday that state banks sold $2.3 billion in marketable securities to assist fulfill the demand for dollars caused by aging KKM accounts.

The lira has lost 28% of its value this year, the most among the 31 major currencies monitored by Bloomberg, trailing only the Argentine peso.

According to the sources, Simsek also assured the investors that he had proposed two recognized experts for places on the central bank's monetary committee, although he explained that he was unsure whether his proposals would be accepted.