Anadolu Agency: News in English, 01-02-22

Anadolu Agency: News in English Directory - Previous Article - Next Article

From: The Anadolu Agency Home Page at <http://www.anadoluajansi.com.tr/>

ANADOLU AGENCY

NEWS

22 FEBRUARY

2001 Thursday

CONTENTS

[01] TURKEY-PRESS SCAN

[02] MOODY'S REVISES TURKEY'S RATING OUTLOOK TO STABLE FROM POSITIVE

[03] JOINT STATEMENT FROM ONAL AND ERCEL: (2)

[01] TURKEY-PRESS SCAN

HURRIYET (LIBERAL)

TANER: ''CRISIS WILL END AFTER THE EID AL-ADHA''
Former State Minister Gunes Taner, who attended the emergency summit held at the Prime Ministry, said that the markets will recover by the Eid al- Adha (Feast of Sacrifice holiday) which will start at March 5. Taner noted that the floating exchange rate policy will strengthen the current economic program, adding, ''the devaluation expectations are left behind.''

RECORD DECREASE IN STOCK EXCHANGE
The stock exchange marked the biggest decrease in its history on Wednesday. The stock exchange decreased 1587.92 points to 7,180. The total decrease in the stock exchange in three days became 29.39 percent.

MILLIYET (LIBERAL)

ADDITIONAL 15 DAYS TO FP
The Virtue Party (FP) was given an additional 15 days to prepare its defense against the second indictment prepared by the Supreme Court of Appeals Chief Prosecutor's Office related with the closure case. The Constitutional Court decided to give additional 15 days. The FP will make its pre-defense on March 12.

SABAH (LIBERAL)

CRISIS IN TURKEY EFFECTS OTHER FOREIGN MARKETS
The crisis in Turkey effected the developing markets all around the world. The Brazilian currency lost in real value and the value of the bonds started to decrease in the country. The Argentine stock exchange was also affected by the crisis and the stock exchange started to decrease. Another stock exchange which lost in value was the Russian stock exchange. The Russian stock exchange decreased 7.9 percent.

CUMHURIYET (LEFT)

SABANCI SAYS NSC SHOULD CONVENE URGENTLY
Sakip Sabanci, the chairman of the executive board of Sabanci Holding, said the recent row between the prime minister and president not only surprised them, but also their foreign partners. Sabanci added the National Security Council (NSC) should convene urgently. Noting that the government should continue to implement the economic program, Sabanci said the only way to overcome the economic problems was to continue to implement the economic program.

RADIKAL (LEFT)

S&P PLACES TURKEY ON WATCH AND DOWNGRADES RATING OF ZIRAAT BANKASI

Standard and Poor's (S&P) placed Turkey's ratings on watch with negative implications. Releasing a statement, S&P said that it lowered its long and short term foreign currency ratings on T.C. Ziraat Bankasi A.S. (Ziraat) to single 'B' from single 'B-plus' and to single 'C' from single 'B' respectively. At the same time, S&P placed all its long and short term ratings on Ziraat, Export Credit Bank of Turkey, Turkiye Is Bankasi A.S., Dogus Holding A.S., Turkiye Garanti Bankasi A.AS., Osmanli Bankasi A.S., and Korfezbank A.S., on CreditWatch with negative implications.

TURKIYE (RIGHT)

MOODY'S DECREASES OUR RATING
Moody's, an international rating organization, revised its outlook from positive to stable for Turkey's B1/B2 country ceilings for foreign currency debt and bank deposits early on Thursday. Releasing a statement, the Moody's said that this week's renewed financial market turbulence, although sparked mainly by political developments, revealed that the credibility of the stabilization program had not been restored following the banking crisis in November.

ZAMAN (CONSERVATIVE)

GENERAL CELASIN IN ISRAEL
General Ergin Celasin, the Air Forces Commander, went to Israel within the framework of an official visit. Celasin will check the Turkish F-4 planes which are being modernized by Israel, get information from the Turkish officials about the efforts launched for the purchase of Popeye-2 missiles, and hold contacts related with the Arrow missile defense system during his three-day visit.

-GOVERNMENT DECIDES TO FLOAT LIRA DUE TO RECENT ECONOMIC CONDITIONS
ANKARA - The government decided early on Thursday to float the Turkish lira (TL) due to the recent economic conditions.

The economy summit which was held at the Prime Ministry and which lasted for 12 hours, ended.

A statement was released following the meeting to announce the decisions taken.

The statement said that the government is determined to continue to implement the economic program.

The statement said, ''the structural reforms will be implemented as they have been planned. Meanwhile, the necessary efforts for the privatization of Telekom and the Turkish Airlines (THY) will be rapidly exerted. The financial policy of the program will continue to be implemented as it has been done so far. The TL will be let to float due to the recent economic conditions. By this recent arrangement, we will gain more revenue from exportation and tourism. Our government will continue its efforts to prevent the people from suffering from inflation.''

Deputy Prime Ministers Devlet Bahceli, Mesut Yilmaz and Husamettin Ozkan and State Ministers Tunca Toskay and Recep Onal, and Finance Minister Sumer Oral attended the economy summit presided by Premier Bulent Ecevit.

On behalf of the bureaucrats, Treasury Undersecretary Selcuk Demiralp, Central Bank Governor Gazi Ercel, Banking Regulatory and Supervisory Board Chairman Zekeriya Temizel and general directors of the public banks attended the meeting.

[02] MOODY'S REVISES TURKEY'S RATING OUTLOOK TO STABLE FROM POSITIVE

Releasing a written statement, the Moody's said that this week's renewed financial market turbulence, although sparked mainly by political developments, revealed that the credibility of the stabilization program had not been restored following the banking crisis in November.

These events indicated once again that the economic program was highly vulnerable to political shocks, the statement added.

The statement said that the market's attention at present was focused on the sustainability of the exchange rate peg.

Drawing attention to the delay in the privatization projects, the Moody's said that the recent legislative delays have cast shadow over the program's considerable achievements last year in lowering inflation and shifting the primary fiscal balance into surplus.

Moody's added it believed that Turkey's capacity to service its growing external debt was sufficiently incorporated into the existing ratings structure.

-IMF SUPPORTS DECISION OF TURKISH AUTHORITIES TO FLOAT TL
WASHINGTON D.C. - Horst Kohler, the International Monetary Fund's (IMF) Managing Director, said early on Thursday that the IMF supports the decision of the Turkish government to float the Turkish lira (TL).

Following the meeting held to evaluate recent economic developments in Turkey, Kohler said, ''the IMF supports the decision of the Turkish authorities to float the lira. Looking forward, we welcome the Turkish government's goals of continuing to reduce inflation, and ensuring sustainable growth. Continued fiscal adjustment and a strict monetary policy should help stabilize the exchange rate and ensure-possibly after an initial increase-that the inflation rate continues to decline, and that the other substantial gains under the IMF-supported economic program are preserved.''

Kohler continued, ''although the goals of the Turkish government's economic program are unaltered, the change in the exchange rate regime requires a revision of the macroeconomic framework for the economic program supported by the IMF. The authorities have announced that the structural components of the program will be implemented as planned. We expect that discussions between IMF staff and the authorities of the necessary changes in the program will begin this week, with a view to allowing the next disbursement to Turkey under the current IMF agreement within the coming weeks. These discussions will explore the possibilities of making resources available under the program to cover some of the increased fiscal costs of bank restructuring.''

"The continued involvement of private creditors is critical to the success of Turkey's adjustment program. The Fund expects that commercial banks will continue to maintain their exposure to Turkish commercial banks, in line with the voluntary agreement reached in December 2000," Kohler added.

Meanwhile, the IMF officials said that Carlo Cottarelli, the IMF's Turkey Desk Chief, was returning to Turkey.

-CENTRAL BANK:
-''WE DECIDED TO IMPLEMENT FLOATING EXCHANGE RATE POLICY
TO STRENGTHEN AND CONTINUE TO IMPLEMENT THE STABILITY PROGRAM''
ANKARA - The Central Bank said on Thursday that they decided to implement the floating exchange rate policy to strengthen and continue to implement the stability program.

A statement of the Central Bank said that the firm monetary policy which targets at struggling against inflation will continue to be implemented with determination.

The statement emphasized that the Central Bank will play an active role to guarantee the new economic balances to be at sustainable levels.

-CENTRAL BANK (2):
-''FIRM MONETARY POLICY WHICH TARGETS AT STRUGGLING AGAINST
INFLATION WILL CONTINUE TO BE IMPLEMENTED WITH DETERMINATION''
ANKARA - The Central Bank said on Thursday that the firm monetary policy which targets at struggling against inflation will continue to be implemented with determination.

A statement of the Central Bank said that the floating exchange rate policy has started to be implemented but that the Central Bank will play an active role in this process.

The statement noted that a banking crisis occured last November and that the banking system and the foreign investors inclined to the foreing currency following this crisis.

A relative stability was provided by the measures taken by the government following the crisis and by the supplemental reserve facility provided by the International Monetary Fund (IMF) and the efforts of the Central Bank to take under control the net assets, the statement said.

The statement continued, ''but, despite all these measures, the confidence was not fully built and the expectations of a new crisis in the markets were on the agenda. The political tension which occured on February 19 in the end of this sensitive period when the markets expected new and positive developments, caused the investors to lose their confidence in the program and demand foreign currency from our bank by panicking. The same day, almost 7.6 billion U.S. dollars were sold by value date.''

The Central Bank implemented the control of the net assets with determination within the framework of the current monetary program on February 20, the statement said.

The statement noted that the same day, the Central Bank limited the TL liquidity possibilities and within this framework, and the 6.1 billion U.S. dollar portion of the sold 7.6 billion U.S. dollars returned.

But, as the limitation of TL liquidity, the short term interest rates climbed to high levels, the statement pointed out.

The statement said that despite the efforts to continue the monetary program on February 21, the confidence could not be re-built and to this need, the continuation of the balances set up in the TL and foreign currency markets is not possible.

To this end, the floating exchange rate policy was decided to be implemented to strengthen and continue the stability program, the statement noted.

The statement said that the loan provided to Turkey by the International Monetary Fund (IMF) will continue to be extended within the framework of the program as planned.

The statement noted that the increase in exchange rate will increase in parallel with the target inflation, adding that the draft law on the Central Bank will be submitted to the government to be legalized.

-COTTARELLI, IMF TURKEY DESK CHIEF, ARRIVES IN ANKARA AGAIN
ANKARA - Carlo Cottarelli, the International Monetary Fund (IMF) Turkey Desk Chief, arrived in Ankara again on Thursday.

Cottarelli, who had contacts in Ankara since February 12 for review works, returned to Ankara today to hold contacts regarding the decision taken in Economy Summit to implement the floating exchange rate policy.

-PRESIDENTIAL SPOKESMAN AND PRESS CHIEF ADVISER YALMAN:
''PRESIDENT SEZER IS SENSITIVE ON FULFILLING HIS DUTIES
AND AUTHORITIES STATED IN THE CONSTITUTION TAKING INTO
CONSIDERATION THAT STATE ORGANS WORK IN ORDER AND HARMONY''
ANKARA - Presidential Spokesman and Press Chief Adviser Metin Yalman said on Thursday that President Ahmet Necdet Sezer was sensitive in fulfilling his duties and authorities that were stated in the Constitution by taking into consideration that the state organs work in order and harmony.

Yalman said, ''the President does not believe in the benefit of making public the details of the things that were discussed in the National Security Council (NSC) meeting, and keeping it on the agenda.''

Yalman, who staged a news conference, recalled that journalists asked questions about the incidents that occurred following the NSC meeting.

Yalman said, ''the Presidency issued a statement on February 19, 2001 regarded with the news reports that appeared in media following the NSC meeting. There is nothing we will add to this statement at this stage.''

Yalman said, ''the president is sensitive on fulfilling his duties and authorities mentioned in the Constitution by providing the state organs to work in order and harmony. Continuation of Turkey on its path in a healthy way, and Turkish nations' reaching prosperity is the biggest wish of the President like everybody. President sincerely believes that everybody should exert efforts to reach this target. The president does not believe in the benefit of making public the details of the things that occurred at the NSC meeting.''

''President Sezer once again reiterates his belief that Turkish Republic is strong enough to overcome all the problems and difficulties with the joint efforts of all the constitutional institutions and the nation.''

-PRESIDENTIAL SPOKESMEAN AND PRESS CHIEF ADVISER YALMAN: (2)
-''THE PRESIDENT REMAINS AT THE HELM OF HIS DUTIES''
ANKARA - Presidential Spokesman and Press Chief Adviser Metin Yalman said on Thursday that President Ahmet Necdet Sezer remained at the helm of his duties.

Addressing a news conference in Cankaya Palace, Yalman made statements about the State Inspection Board (DDK) and responded to the questions of reporters.

Recalling that assignments and authorities of the State Inspection Board were mentioned in Article 108 of the Constitution, Yalman said broadening or limiting the assignments of the Board were impossible despite this constitutional provision.

Yalman said any extra increase to the salaries of the members of the State Inspection Board was regardless of question.

When a journalist said, ''it was discussed that the row between the president and the prime minister that occurred during the NSC meeting was effective in the economic crisis. Does the president accept such a responsibility, does he think of resigning?'' Yalman said, ''we had made a statement from the Cankaya Palace on Wednesday regarded with economy. I think this statement will reflect the views of the president about economy. It would not be appropriate to add any additional interpretation to this statement.''

When the journalist insisted, ''Does Mr. President think of resigning?'' Yalman said, ''Mr. President remains at the helm of his duties.''

Yalman refrained to answer another question asking if the president thinks of convening the Council of Ministers for an extraordinary meeting.

-CENTRAL BANK SECURITIES EXECUTIVE BOARD CHAIRMAN:
-''IT IS BENEFICIAL FOR TURKEY'S ECONOMY IN MIDDLE AND LONG TERM''
ANKARA - Yusuf Uzunyol, the Chairman of Central Bank Securities Executive Board, said on Thursday that the implementation of floating exchange rate policy is positive for Turkey's economy in the middle and long term.

Uzunyol told A.A correspondent that at least, this implementation decreased the financial crisis risk.

They announced the purchase of one U.S. dollar in return for 750 thousand Turkish liras (TL) and the sale of one U.S. dollar in return for 950 thousand TL, Uzunyol said.

But, the total transactions did not exceed 5 thousand U.S. dollars, Uzunyol noted.

Advising the citizens to wait, Uzunyol emphasized that it will be beneficial if those who want to purchase foreign currency for investment should wait two or three days.

Uzunyol said that they expect one U.S. dollar to be around 800-850 thousand TL, and went on saying, ''the statements that the Central Bank has made so far are not sufficient. We have to know what will be done. The interest side has not been set up yet. As of midday, only one transaction with 150 percent was made in the Central Bank TL market. These are not equal to yesterday's interests. The interest rates should fall a little bit. There are proposals for 200 percent for the purchase and 1500 percent for the sale, but there are still no transactions.''

''The proposals in the effective exchange market of the Central Bank are 980 thousand TL for the sale, 735 thousand TL for the purchase and 1 million 20 thousand TL for the sale. But, no transactions have been made so far. I hope this price will be settled around 800-850 thousand TL,'' Uzunyol said.

Emphasizing that the decision of implementing the floating exchange rate policy, Uzunyol said, ''it was not possible to continue with the controlled currency regime. Thus, the currency system which was foreseen to be implemented in 2003 in accordance with the program, was implemented before the earlier scheduled date. I do not think that anybody will buy foreign currency for speculative purposes from now on.''

Uzunyol said that due to the current policy, 30 percent of the exchange offices have been closed so far.

Meanwhile, the exchange offices in Sakarya Street of Ankara started to purchase one U.S. dollars in return for 700 thousand TL and sell it in return for 950 thousand TL while they started to purchase one German mark in return for 325 thousand TL and sell it in return for 450 thousand TL.

-IMF'S TURKEY DESK CHIEF COTTARELLI SAYS
THEY SUPPORT NEW CURRENCY REGIME
ANKARA - Carlo Cottarelli, the International Monetary Fund's (IMF) Turkey Desk Chief, said on Thursday that they support the new currency regime of Turkey.

Cottarelli, who came to Ankara on Thursday morning as the new currency regime was put into implementation, told reporters that this regime will not change the government's target and the disinflation strategy.

Responding to the questions of reporters on the effects of the new regime, Cottarelli said that they can have some demands related with the review meetings, especially the review of macro-economic frame.

Cottarelli said that the IMF delegation will come to Turkey again.

Responding to a question on the effects of the new currency regime on inflation, Cottarelli said that this decision may not affect the general strategy.

Cottarelli noted that to this end, they have to watch how the inflation will react to the decision in the short term.

It is too early to say this, Cottarelli said, but the general strategy will not change.

When asked a question saying, ''there are some people who are pessimist about this issue. Is everything that bad,'' Cottarelli said he should say that it was not that bad.

Cottarelli said that but, everything depends on how the transition period into the new currency regime is administered.

The government had said that it is still determined to keep its disinflation target, Cottarelli noted, adding that to this end, it will go well.

-INTERIOR MINISTER TANTAN IN BULGARIA
SOFIA - Interior Minister Saadettin Tantan, currently holding contacts in Bulgaria, called on required measures to be taken against the illegal activities of the terrorist PKK organization toward the Turkish businessmen in this country. The terrorist PKK organization, who threaten the businessmen, collect money illegally from the Turkish businessmen. Tantan said, ''Turkish businessmen will make more investments if this problem is overcome.''

Tantan, who met with Bulgarian Parliament Speaker Yordan Sokolov, pointed out that the difficulties which Bulgaria brought in front of the Turkish businessmen on visa, created difficulty, and called on the support of the officials in this respect.

Pointing out that Turkey and Bulgaria cooperated in struggle against organized crimes, Tantan said organized crimes and terrorism were interlinked.

Tantan mentioned the importance of confidence atmosphere for the development of countries, and noted that relations of Turkey and Bulgaria were perfect due to economic means.

Tantan said Turkish businessmen investing in Bulgaria were afraid of the organized crime groups, noting that terrorist PKK organization, which collected money illegally in Bulgaria and which threatened the businessmen, created uneasiness. Tantan said he would convey these problems to Bulgarian Interior Minister Emanuil Yordanov. ''If this problem is overcome with your support, Turkish businessmen will make more investments,'' Tantan said.

Pointing out that Turkey extended support to Bulgaria's entrance to NATO and the European Union (EU), Tantan said improvement of border security between the two countries would better the security of the region.

Recalling that efforts launched in the past to change the last names of the Turks living in Bulgaria caused very important problems, Tantan said, ''with a legal amendment that will be made on the issue, maintenance of the generations will be provided. This is very important.''

Tantan also said Turkey was ready to extend support to Bulgaria regarding the training of the personnel on many issues.

Bulgarian Parliament Speaker Sokolov said visit of Tantan would contribute to the improvement of relations, adding that they attributed great importance to relations with Turkey regarding the peace in the Balkans.

Sokolov said cooperation between the two countries in fight against organized crime was very important in establishment of peace and tranquility atmosphere, adding that joint efforts of Turkey and Bulgaria would be for the benefit of the two countries.

Sokolov also accepted the message of Parliament Speaker Omer Izgi inviting him to Turkey.

Recalling that elections would take place in Bulgaria soon, Sokolov said a legal amendment would be made pertaining to the changing of names of Turks. He said the problems would be solved.

Speaking about visa issue, Sokolov said the EU had very strict rules, noting that they did their best to prevent their relations to be negatively effected with Turkey.

Interior Minister Tantan also met with Bulgarian Parliament National Security Commission Yordan Bakalov.

Addressing the meeting, Bakalov said exchange of information between Turkey and Bulgaria should be increased to the maximum level.

Tantan in his part conveyed the issues he discussed with Sokolov, and called on the illegal activities of the terrorist PKK organization in Bulgaria to be prevented. He wanted the difficulties which appeared in visa implementation to Turkish citizens and businessmen to be overcome.

Tantan said, ''we want to continue the cooperation with you which we carry out against terrorist PKK organization. Because the members of the terrorist PKK organization threaten the Turkish businessmen who invest in here, and collect money from them illegally.''

Bakalov, speaking about the activities of terrorist PKK organization, pointed out that there was an association in Bulgaira acting under the name, ''Kurdish Intellectuals Association.''

Pointing out that a legal arrangement should be made to fight against the terrorist PKK organization, Bakalov said an opposition party extended support to Kurds. Bakalov said they were concerned and sorry in this respect, noting that they would prevent these illegal activities with a protocol which they would make with Turkey if there was not that support.

-EUROPEAN COMMISSION TO SUPPORT PROJECTS UNDER ''EUROPEAN
INITIATIVE FOR DEMOCRACY AND HUMAN RIGHTS''
ANKARA - The European Commission stated on Thursday that it launched a new call for proposals under the ''European Initiative for Democracy and Human Rights (EIDHR)''.

Releasing a statement, the European Commission's Representation in Turkey said the European Commission had allocated 38 million Euros from its budget for these projects.

The statement said, ''to ensure greater impact and the best use of resources, the European Commission has selected priority themes for different parts of the world. In the case of Turkey, EIDHR proposed activities should focus on the following priorities:

1. Support to education, training and awareness in the area of human rights (activities promoting rule of law, strengthening of decision making processes, and gender equality could also be included under this priority);

2. Support to measures to combat racism and xenophobia and to protect minorities and indigenous peoples;

3. Actions aimed at promoting and protecting freedom of opinion, expression and conscience, and the right to use one's own language (activities promoting pluralism could be included under this priority;

4. Initiatives aimed at the abolition of the death penalty.''

The statement noted, ''applicants must be non-governmental organizations (but local authorities and public sectors institutions such as universities and broadcasters could also be considered.) They are invited to apply for a minimum grant of 300 thousand Euros for projects. Grants may cover up to maximum 80 percent of project costs (for local organizations in the developing world up to 100 percent of project costs). The deadline for submitting applications is Monday March 19, 2001. Grants will finance projects with activities lasting up to 36 months.''

''Apart from the above-mentioned budget line, another call for proposals is made in support for rehabilitation centres for victims of torture. The deadline for reception of applications is monday April 2, 2001.''

For further details, the relevant websites are as follows:

http://europa.eu.int/comm/europeaid/tender/index_en.htm

www.deltur.cec.eu.int.

-BRIEFING AT CANKAYA PRESIDENTIAL PALACE
ANKARA - Presidential Cabinet Chief and Foreign Relations Adviser Tacan Ildem said on Thursday that President Ahmet Necdet Sezer and Prime Minister Bulent Ecevit did not have any other appointments except for next Monday's meeting of National Security Council (NSC).

Staging a weekly briefing at the Cankaya Presidential Palace, Ildem gave information to journalists about the third summit meeting of the Developing- 8 (D-8) Economic Cooperation Group to be held in Egyptian capital Cairo between February 24 and 25.

Ildem recalled that the D-8 was formed as a result of Turkey's initiatives at a conference on cooperation in developments in Istanbul in October of 1996 with the participation of Iran, Pakistan, Bangladesh, Malaysia, Indonesia, Egypt and Nigeria.

He said that the D-8 was formed officially with the first heads of state and government summit meeting in Istanbul on June 15, 1997.

Noting that the summit meetings were being held once in two years, Ildem said that the last summit meeting was held in Dakka in 1999.

He told reporters that Bangladesh would hand over the term presidency to Egypt at this year' summit meeting.

Pointing out that Foreign Minister Ismail Cem would accompany President Sezer during his visit to Egypt, Ildem said, ''prior to the heads of state and government summit meeting on Sunday, the Trade Experts Group held a meeting on Thursday. The Business Forum will convene later today, the D-8 Commission will hold a meeting on Friday, and the foreign ministers of D-8 countries will convene on Saturday.''

Responding to a question, Ildem said that Iran would attend the summit meeting on the level of foreign ministry.

He said that President Sezer was expected to hold bilateral contacts during the summit meeting.

Responding to another question, Ildem said that President Sezer and Prime Minister Ecevit did not have any other appointments except for next Monday's meeting of NSC.

-JOINT STATEMENT FROM STATE MINISTER ONAL AND CENTRAL
BANK GOVERNOR ERCEL (1)
ANKARA - State Minister Recep Onal and Central Bank Governor Gazi Ercel said on Thursday that a strict monetary regime would be implemented in the coming week in order to install confidence on currency again.

Onal and Ercel issued a joint written statement and said, ''the primary goal in the coming few days would be to prevent the markets to show extreme reaction and to prevent Turkish lira to lose value.''

The statement said, ''also, we reiterate that we fully back the guarantees that were given regarded with the commitments of the banking sector. The depositors and creditors in banking system are fully under guarantee, and would continue to be so.''

(to be continued)

-FOREIGN TRADE UNDERSECRETARY TUZMEN:
''WE WILL BE ABLE TO SEE THE POSITIVE INFLUENCE OF
FLOATING EXCHANGE RATE POLICY ON EXPORTATION
AFTER THE FIRST TWO MONTHS''
ANKARA - Foreign Trade Undersecretary Kursad Tuzmen said on Thursday that the positive influence of the floating exchange rate policy on exportation would start to be seen after the first two months.

Tuzmen responded to the questions of A.A correspondent about the effects of the floating exchange rate policy.

Tuzmen pointed out that the difficulty which Turkey had so far was experienced because of EURO-Dollar parity, noting that TL, which gained value, made exportation harder.

''Now, we will see a TL which loses value, instead of a TL which gains value,'' Tuzmen said, adding that, this clearly meant increase of the competition advantage of the exportation.

Tuzmen said in the direction of the decision that was taken, the export products would be more acceptable in foreign markets.

Pointing out that floating exchange rate policy meant that importation would be more expensive, noting that this situation would create pressure on importation.

''However,'' Tuzmen noted, ''we will be able to see the positive effects after the first two months.''

Underlining that positive reflection on the exportation would start in the first one month, Tuzmen said balancing of the markets should be waited.

Tuzmen said, ''I think, at the moment exchange rate will make an increase, and will be settled toward the feast of sacrifice. The exchange rate, which will be settled, will provide an important advantage for our exportation.''

Tuzmen said the issue should also be considered in importation basis, noting that the importation, which became expensive, will cause shrinkage in importation.

Tuzmen said when Turkey's importation composition is considered, it would be seen that it was a country growing with importation, noting that Turkey was a country producing 85 percent intermediate goods, and capital goods.

Tuzmen said it would be possible to prevent these negativities with the measures that would be taken, and through transferring source to production, adding that, an exportation, supported by production was healthy.

''We have goods to be sent to exportation markets. We have goods which were produced and under production. We have difficulty in production because of high finance costs. However, with the decrease of the finance cost, when the market balances are settled, the TL which will lose value, will create an advantage to the exporters. In short, it is a positive development for exportation. Thus, a solution would be brought to the difficulties which the exporters experience,'' Tuzmen said.

-PRIME MINISTER ECEVIT DUE TO MACEDONIA
ANKARA - Prime Minister Bulent Ecevit will leave for Macedonian capital Skopje at 08:00 p.m. on Thursday to attend the Southeast European Countries Cooperation Process Heads of State and Government Summit Meeting.

Releasing a statement, the Prime Ministry Office said that Prime Minister Ecevit would attend the first and second sessions of the summit meeting, and the signing ceremony of statement about approval of 'Agreement for Good Neighborly Relations, Stability, Security and Cooperation in Southeast Europe' on Friday.

Later, he will partake in a luncheon to be hosted by President Boris Trajkovski of Macedonia in honor of the participants.

Ecevit will also attend the approval of final statement the same day.

Prime Minister Bulent Ecevit is expected to stage a press conference.

He will leave Skopje for Turkey late on Friday after holding bilateral contacts.

-EUROPEAN COMISSION WELCOMES ADOPTION OF ELECTRICITY MARKET BILL
ANKARA - The European Commission welcomed the adoption of electricity market bill.

Releasing a written statement, the Representation of the European Commission to Turkey said on Thursday, ''the bill, which will constitute important progress towards liberalizing the energy sector in Turkey, will also mark a significant first step towards the European Union (EU) membership conditions with regard to the energy sector.''

''Energy liberalization should lead to fair competition, transparency, secure and stable supply and distribution and lower prices for both consumers and industry. It should help attract increased foreign direct investment that not only brings know-how and much needed foreign capital into Turkey, but also contributes significantly to reducing the burden on public finance. The adoption of the electricity bill is thus a step towards stronger economic growth and competitiveness,'' it said.

The statement noted, ''a liberalized energy sector also constitutes an essential component of EU energy policy and thus forms part of the Copenhagen criteria, the acquis which Turkey will need to comply with in any event before EU membership. Turkey's Accession Partnership includes among the short term priorities, to be fulfilled by Turkey by end 2000, several aspects of energy policy, notably compliance with the electricity and gas directives, creation of independent regulatory authorities for the electricity and gas sectors, progress on establishing an internal energy market as well as preparing the opening up of markets.''

''The electricity markets law is a framework law: important provisions of the EU's electricity directive on issues such as the construction of new generating capacity, unbundling of utilities, third party access to the network, seem to be left to secondary legislation. As part of the accession strategy, the Commission will be closely monitoring developments in the energy sector. It looks forward to continuing dialogue with the Turkish authorities in order to ensure that forthcoming secondary legislation will be fully EU compliant and to work on the setting up of an independent regulatory with full authority over tariff policy,'' it said.

The statement added, ''the European Commission has provided financial support for economic reforms in Turkey. A Structural Adjustment Facility, which was approved last year foresees 150 million euros in grant aid. The adoption of the electricity market law is one of the conditionalities for the release of this amount. The European Commission expects further progress in completion and enactment of legislation in full conformity with EU gas market liberalization directives and establishment of regulatory authorities for the release of the rest of 150 million euros.''

-PRIME MINISTER ECEVIT: (1)
''THE EXCHANGE RATE IS LET TO FLOATING''
ANKARA - Prime Minister Bulent Ecevit said on Thursday that he believed switching to floating exchange rate policy would enliven economy.

Addressing a news conference which he staged following his meetings with the leaders of the coalition partner parties, Ecevit briefed about the economy summit which started on Wednesday evening and ended on Thursday.

Pointing out that they made an 12-hour fruitful meeting with the Deputy Prime Ministers Devlet Bahceli and Mesut Yilmaz, Ecevit recalled that some ministers and concerned experts also attended the meeting.

Ecevit said they examined the economic problems in detail and took important decisions, adding that the exchange rate was switched to floating, and expressed belief that this would enliven economy. Ecevit said they also believed that this would provide important income increase in foreign sale and tourism sectors.

Ecevit said required care would be shown to prevent the working sector from suffering loss from the inflation, and noted that efforts will be intensified in fight against poverty.

Ecevit said they believed that artificial increase in exchange rates and interests would end soon, adding that, ''reaching healthiness in economy will be speeded up if our citizens share this belief.''

Pointing out that the economic program which the government implemented so far carefully would be carried out with determination, the prime minister said, ''the same determination will be shown in structural reforms, privatizations, and finance policies.''

Ecevit wished the new decisions to be beneficial to the public and economy life.

(to be continued)

[03] JOINT STATEMENT FROM ONAL AND ERCEL: (2)

Onal, the state minister responsible for economy, and Gazi Ercel, the Central Bank governor, issued a joint news conference and briefed about the policies that will be covered within the framework of the floating exchange rate policy.

The statement said the exchange rate regime, which has been put into implementation as of the end of December 1999, made the inflation to reduce to the lowest level since 1986, adding that, ''however, cost of the exchange rate policy, which is in question, increased very much. Thus, the government decided to liberalize Turkish lira.''

It said the statement targeted clarifying the basic goals of the government and its principles regarded with the new economic policies, adding that, ''mainly, the basic strategy continues to target struggle against inflation in parallel with growth.''

The statement said the primary goal in the coming few days would be to prevent the markets to show extreme reaction, and the Turkish lira to lose extreme value. It said a strict monetary policy would be put into practice in the coming weeks in order to re-install confidence in monetary unit.

The statement reiterated that the government fully backed the guarantee that were given regarded with the commitment of the banking sector, adding that the depositors and creditors in banking system were totally under guarantee.

The statement said:

''However, those steps that will be taken immediately, should be integrated with the re-structuring of our economic strategy in the coming months and years in general sense.''

Detailed methods in this respect will be compared and will be settled on the outlines of the following principles:

-Strugge against inflation: with the new Central Bank law, the Central Bank will be autonomous. The new law will oblige the Central Bank to realize the inflation targets that were determined.

-Determining the economy targets and conditions: cost of inflation, growth, and re-structuring of the banks would be realized within the framework of budget issues.

''We are waiting for an agreement to be reached on a new and realistic framework within the scope of re-forming the program that is jointly carried out with the IMF.''

-Providing the sustainibility of financial balances: the 2001 budget, which was adjusted considering the change in exchange rate, will be put into implementation with all the measures that accompany the betterment of the financial balances of the State Economic Enterprises.

-Making cooperation with the social sections to facilitate the decrease in inflation: We request the support of the social sections to keep the salaries and prices in reasonable levels in order to realize the target of the nation to decrease inflation, and we rely on the confidence that will be shown. The government will be careful in reaching a compromise in the direction of the targets to struggle against inflation.

-Strengthened strategy for the banking sector: we will be working on an approach to re-structure the public banks and to determine a more rapid approach for the solutionof the banks which were transferred to the Savings Deposits Insurance Fund.

-A renewed approach will be shown to re-structure and privatize the public enterprises like the THY and Turk Telekom.

-PRIME MINISTER ECEVIT (2)
-''LATEST FIGURES AND MOVEMENTS HAVE REVEALED THAT
THERE WAS ACTUALLY A PROBLEM IN ECONOMY''
ANKARA - Prime Minister Bulent Ecevit said on Thursday, ''the latest figures and movements have revealed that there was actually a problem in economy. This problem came out with the incident at Monday's meeting of National Security Council (NSC).''

Prime Minister Ecevit responded to questions of journalists following the joint press conference he staged together with State Minister and Deputy Prime Minister Devlet Bahceli, the leader of the Nationalist Movement Party (MHP); and State Minister and Deputy Prime Minister Mesut Yilmaz, the leader of the Motherland Party (ANAP).

When asked whether or not change in the Central Bank Law would be made before the religious holiday between March 5 and 8, Prime Minister Ecevit said, ''a few days are left. Therefore, we may not manage it before the religious holiday.''

Noting that they attributed great importance to the arrangement regarded with the Central Bank, Prime Minister Ecevit expressed his hope over approval of the arrangement by parliament without any delay.We will expend all necessary efforts to this end.''

Noting that they would continue to take structural requirements, Ecevit told reporters, ''at the same time, discussions on reformist laws have been accelerated at the parliament. Following the change in the parliamentary by- law, works at the parliament have accelerated. We will maintain this speed. So many draft laws of great importance will be approved by the parliament.''

When asked whether or not there was a change in inflation target foreseen for the year 2001, Ecevit said that they could not take up the details.

Responding to another question, Prime Minister Ecevit said, 'I do not suppose that yesterday's decisions would affect our inflation target negatively.''

When asked whether or not budget would be scrutinized under the light of yesterday's decisions, Prime Minister Ecevit said, ''I do not think that there would be a need to scrutinize the budget.''

''In fact, economy had to be reviewed. The outside observations showed that there was such a need. The problem has not come to an end yet. I would like to mention that: Policy and economy are immediately affected. There may always be actions, conflicts, and discussions in political life. Each of these are reflected in economy as if there will be an election soon, although such a thing is out of question. I wish our citizens would not be panicked on such economic issues. There may always be problems in politics. However, it would not be right to attribute importance to them due to economic means. There may be some discussions in political life regarded with economy. Reflection of discussions on economic figures cause negative developments in economy. I think it would be appropriate to act cautiously in this respect.''

When a journalist asked, ''economic crisis is brought to the agenda after you left the National Security Council (NSC) meeting. Would you leave the meeting under the same conditions when you consider today,'' Ecevit said, ''we should think of it separately if we try to find somebody responsible. Recent indications and actions show that there was in fact a problem in economy. This problem erupted. Otherwise, the economic indications don't show activity with such speed.''

When asked how struggle against poverty would be shown in an atmosphere when Turkish money lost 30 percent rate, Ecevit said they would find a way for it.

Ecevit said they were in an effort to implement a program which attribute importance to the economy as well as the social life, adding that, ''we attribute great importance to social justice and social problems.''

Pointing out that a source should be created for this, Ecevit said they were intensely trying to find a source on the issue.

Ecevit said, ''I hope we will obtain some positive results soon. We will be able to allocate more sources to the social problems as long as we overcome the deficiences on the issue. We act carefully in this respect.''

Responding to a question how he evaluated the proposal of the opposition parties for the establishment of a ''national reconciliation government,'' Ecevit said they were careful in working in harmony with the parliament.

Ecevit pointed out that they worked in harmony with the government in the parliament in the past legislation year, adding that works in the parliament began to be speeded up with the effect of the change in by-law.

Ecevit said, ''we are a government which attribute a great importance to the reconciliation. Positive outcomes of this are seen often. We will show the required care to reflect this characteristic in parliamentary works.''

Ecevit said required measures would be taken due to budget after the reflections of the decision, taken regarded with exchange rate policy, are revealed. Ecevit said, ''we have not taken such a decision at the moment. Also, the time that was required to discuss the issue has not ended. We could not find time to make works in detail.''

(End)

-JUSTICE MINISTRY CARRIES OUT PREPARATORY
WORKS FOR EXTRADITION OF KARAHASANOGLU
ANKARA - The Justice Ministry has been carrying out preparatory works for extradition of Sukru Karahasanoglu, the former Director general of Sumerbank who was captured in Italy.

Sources said on Thursday that asked Istanbul State Security Court (DGM) Chief Prosecutor's Office and chief prosecutor's offices in other provinces to prepare a dossier about ongoing investigations against Karahasanoglu.

Later, the Justice Ministry will send the dossier to the Italian Justice Ministry through the Foreign Ministry.

Officials at the Justice Ministry said that extradition of Karahasanoglu would be requested from Italy within scope of the European Convention on Extradition of Offenders.

They noted that there had not been any problem between Turkey and Italy in extradition of offenders except for extradition of Abdullah Ocalan, the head of terrorist organization PKK.

Istanbul DGM Chief Prosecutor's Office issued arrest warrants for 40 people within framework of the investigation into Sumerbank which was transferred to Savings Deposits Insurance Fund.

Karahasanoglu is one of these 40 people.

-U.S. AMBASSADOR TO TURKEY PEARSON VISITS INCIRLIK BASE
ADANA - U.S. Ambassador to Turkey W. Robert Pearson visited the Incirlik Air Base in Adana on Thursday.

Pearson also had a meeting with U.S. Consul General Greata Holtz at the U.S. Adana Consulate.

Pearson later returned to Ankara.

Anadolu Agency: News in English Directory - Previous Article - Next Article