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ECONOMICS > Time to make tough decisions: Turkish deputy minister

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The states should benefit from calmer economic atmosphere by making necessary decisions instead of being misled, says Turkish Deputy PM Babacan

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Financial Affairs, Ali Babacan (L) speaks with British Chancellor of the Exchequer George Osborne (R) after G20 states finance ministers and central bank governors meeting where he has shared remarks on global economy. AFP photo

Financial Affairs, Ali Babacan (L) speaks with British Chancellor of the Exchequer George Osborne (R) after G20 states finance ministers and central bank governors meeting where he has shared remarks on global economy. AFP photo

The time has come for decision-makers to take advantage of the calmer economic atmosphere and make necessary but tough decisions, Turkish Deputy Prime Minister Ali Babacan said Feb. 16 in a G-20 meeting in Moscow.

Babacan said the U.S. Federal Reserve Bank and the European Central Bank had convinced markets that they would not permit their states to become bankrupt. “They tried to consolidate their banks, but they need to put the structural reforms into action,” said Babacan at a ministers’ meeting in the Russian capital, while warning countries not to be misled by the relatively calm atmosphere. 

“If basic problems do not get solved, the markets may begin having concerns, and this may happen very quickly,” he said, adding that the present tranquility was something to take advantage of in terms of acting immediately. 

“The medium-term policies that will be carried out by states will give more positive results than uncertainty,” he said, adding that most developed countries were experiencing political uncertainty that damaged confidence in the present. 

He also said consumers avoided making expenditures while companies avoided making investments when they had doubts about the future.

Solution is common stance

Babacan said states should focus on growth that is promoted by the private sector’s expenses and investments instead of public expenditures, adding that the a common stance on economy policies would engender an atmosphere of confidence. “Let us hold our debates behind closed doors but let us also display common stance when we announce which policies we’re going to implement.” 

While the G-20 finance ministers and central bank governors can promise not to directly devalue their currencies, there can be no guarantees while central banks are pumping money into economies to re-stimulate growth. Babacan said the eurozone, the current center of the economic crisis, had taken crucial steps to achieve a financial union and unity in the banking system thanks to the European Central Bank’s courageous decisions over monetary policies. 

However, he said the predictability about when the monetary policies would normalize was of paramount importance; noting that the solutions of central banks would otherwise be unsustainable, causing concern to overcome markets.

February/18/2013

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Hakan Salci

2/18/2013 10:29:32 PM

Another fact is that whilst Turkey's debt ratio is about 50-60% of GDP this is only achieved because of the lack of mortgage debt in the country, considering that in Europe mortgages make a substantial piece of the debt burden Turkey's current situation is nothing to boast about; it could be said that excluding mortgage debt it's on a par with current debt ratios of most EU countries. So much for the so-called economic success of the AKP; a hallucination which will soon make way for grim reality

Hakan Salci

2/18/2013 10:20:51 PM

@ Nixar, Hot Capital Inflow from abroad is the main reason for Turkey's current economic success along with structural reforms implemented in the banking sector back in 2000-2001 by the Bulent Ecevit government and NOT the AKP. If it were not for these two main factors the Turkish economy would suffer deeply and the illusion of great economic leadership by the AKP evaporate equally in the blink of an eye; the Economist has also stated these facts recently.

mara mcglothin

2/18/2013 5:02:47 PM

NIXAR Mr Dervis is the main architect of Turkish economy. Don't get it twisted. Babacan is just a more eloquent version of Mr Bagis. Both are dweebs. Mr Babacan isn't even well liked in his extended family. He knows a lot about nothing. VARGEN Don't get qualified mixed up with presentable, like many do with Mr Gul. They talked the talk, and walk the walk, but their mentality is the same as the PM'S only people get a false sense that they are of this century.

cezer "çapulcu" skonore

2/18/2013 4:13:27 PM

Nixar Osman: I am sorry for hurting your feelings, but aren't you exaggerating a bit? Why don't you go and ask ordinary people living in Turkey about the Turkey's economy?

Nixar Osman

2/18/2013 12:13:13 PM

Cezer Skononore... Babacan, for your information, is the main architect of today's Turkish economy. He knows a thing or two about the management of national economics. He can show evidence of his knowledge; he is not just talking for the sake of talking... Neither is he "...that annoying guy in a British pub..." He is a first class diplomat and statesmen. Your sarcastic comments are totally misplaced, I'm afraid.

Faruk Beisser

2/18/2013 9:32:14 AM

Another super expert from AKP! Wonderful, soooo many experts in the gov't, so smart, so all knowing!

Vargen Vargen

2/18/2013 8:07:49 AM

It would have been more interesting to hear his views on Turkey. I consider him being the most qualified polititian we have in Turkey.

cezer "çapulcu" skonore

2/18/2013 3:18:57 AM

Babacan is that annoying guy in a British pub telling you how to solve your problems. The worst of all, you drink beer, he drinks orange juice.
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