Turkey's Deputy PM reveals reason on IMF disagreement

Turkish Deputy Prime Minister Ali Babacan revealed Wednesday why Turkey and IMF failed to reach an agreement on a loan stand-by deal, saying one of the details of disagreement was projections over distributions of extra income in case Turkey grows more than 3.5 percent in 2010.

Babacan said that Washington-based lender offered the government to restructure Turkey's revenue administration and reorganize municipal revenues. Babacan said Turkey accepted IMF's proposal about municipal revenues but turned down the offer on revenue administration.

Following long-time talks between Turkey and IMF, Turkish Prime Minister Recep Tayyip Erdogan announced last week that Turkey would not sign a loan stand-by deal with the Fund as it did not need emergency funds.

Babacan also said that a possible deal with the IMF would not have a significant effect on Turkey's credibility any longer.

He said there was nothing left, as of December 31, 2009, that could bring a result in negotiations with the Fund.

IMF had long been willing to sign a stand-by arrangement with Turkey, Babacan said. However, he added that conditions have changed in time as recovery started after the global economic downturn.

Babacan said a possible deal would not aim at helping Turkey rebound from crisis, but it would be a deal supportive of growth.

"Turkey will continue to implement its own program within the framework of Medium Term Program," Babacan said.


/World Bulletin/