Deputy PM calls on firms to focus on alternatives to EU

Deputy PM calls on firms to focus on alternatives to EU

ISTANBUL - Hürriyet Daily News
Deputy PM calls on firms to focus on alternatives to EU

‘There might be various scenarios for Turkey, but we believe the country will grow by 4 percent this year, says Ali Babacan.

Risks were mounting particularly in Portugal, Italy and France, said Turkey’s Deputy Prime Minister Ali Babacan yesterday, saying economic growth could be around minus 0.3 percent in Europe in 2012, making Turkey’s search for alternative markets like Africa inevitable.

“There is no doubt 2012 will be a better year for Turkey,” Babacan said at the Turkish Industry & Business Association (TÜSİAD) general assembly in Istanbul. 

Babacan said the slower growth projections for Turkey still indicate the country could grow despite Europe’s ongoing economic crisis. However, he underlined the fact that recently in Portugal, Italy and France, risk perception has peaked, emphasizing that Turkish exporters have to concentrate on different markets to lessen their dependency on the debt-hit European economy.

“When the economic crisis first started between 2008 and 2009, it was enough for European countries to assure the markets with letters of guarantee from their governments,” said Babacan. “Even government guarantees were not enough to alleviate concerns.”

Babacan said the total bond debt of the five countries hit by the economic crisis – Greece, Ireland, Italy, Portugal and Spain – currently comprised 2.1 trillion euros. Nearly 40 percent of these countries’ debts are to banks in France and Germany, the largest economies in the eurozone. If these five countries face more problems, Germany and France’s banking sectors could be hit.

“I am not hopeful the technocrats will be able to save the economy since they were never elected by their people and the public might not support their initiatives,” Babacan said. “There might be various scenarios for Turkey, but we believe the country will grow by 4 percent this year.” He also said this projection might be subject to revision if the economic situation in Europe deteriorates in 2012. 

Turkey, EU, trade, business