Anadolu Agency: News in English, 01-06-01

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ANADOLU AGENCY

NEWS

01 JUNE 2001 Friday

CONTENTS

[01] TURKEY-PRESS SCAN

[02] MINOR QUAKE IN BALIKESIR

[03] IMF DELEGATION STARTS CONTACTS IN ANKARA

[04] SALE OF MANAVGAT WATER TO ISRAEL -TURKISH AND ISRAELI OFFICIALS DISCUSS FUTURE OF PROJECT AT A MEETING HELD IN JERUSALEM

[05] INTERNATIONAL SCIENCE COUNCIL TO CONVENE IN ANKARA

[06] STATE MINISTER DERVIS IN ITALY -STATE MINISTER DERVIS: ''ITALIAN BUSINESSMEN WANT TO INVEST IN TURKEY''

[07] PROCEDURE FOR TRANSFER OF EMLAKBANK'S BRANCH OFFICES SUSPENDED

[08] NATIONAL DEFENSE MINISTER CAKMAKOGLU CRICITICISES INEFFICIENT NEWS STORIES REGARDING CASA PLANES

[09] FOREIGN MINISTRY SPOKESMAN DIRIOZ: -''WE WISH THAT AN ARRANGEMENT WHICH WILL SATISFY THE SIDES, WILL BE FOUND ON THE ISSUE OF ESDP''

[10] LOSSES OF BANKS TRANSFERRED TO FUND REACH 5 BILLION U.S. DOLLARS AS OF END OF 2000

[11] CENTRAL BANK: ''AVERAGE NET DOMESTIC ASSETS BECAME 7.9 QUADRILLION TURKISH LIRAS''

[12] IMF'S TURKEY DESK CHIEF KAHKONEN IN ANKARA -''ECONOMIC PROGRAM IS A VERY POWERFUL PROGRAM AND THE GOVERNMENT STARTED IT IN A SUCCESSFUL WAY''

[13] DEPUTY PREMIER YILMAZ IN TRNC -''ALL OF THE EXERCISES WHICH HAVE BEEN CARRIED OUT REGARDING THE CYPRUS ISSUE AND INITIATIVES FOR SOLUTION SO FAR SHOULD HAVE PROVED THAT ANY SOLUTION WHICH IGNORES THE TRNC'S SOVEREIGNTY IS NOT POSSIBLE''

[01] TURKEY-PRESS SCAN

HURRIYET (LIBERAL)

Ece ran her candidacy from the Hackney and Stoke Newington in London where Turkish citizens are intensely populated. Ece is married with three children.

Ece will be the first Turkish parliamentarian if she is elected.

PUT AN END TO THE ACTION, I WILL GIVE YOU TWO TRILLION
Muhammet Emin Tokcan, the leader of the terrorists who raided Swisshotel, claimed that Albert Hoffman, the director of the hotel, offered them to give two million U.S. dollars (approximately 2.3 trillion lira), to Chechnya to put an end to the action.

Tokcan said they conveyed this offer of the director to Kazim Abanoz, the Istanbul Security Chief, noting that Abanoz told them that the Hoffman could send aid to Chechnya through Kafkas Foundation.

MILLIYET (LIBERAL)

IMF FINDS DERVIS IN ROME
State Minister Kemal Dervis, who learned the statements of State Minister Yuksel Yalova in Rome Airport, wanted to return immediately. At the moment, Stanley Fischer, the International Monetary Fund (IMF) First Deputy Managing Director, called him on the phone and asked what was going on.

State Minister Dervis was relieved following the statements of Prime Minister Bulent Ecevit. Dervis called the Treasury and told them to make a statement saying ''don't feel concern.''

Following the resignation of Yalova in the evening, Dervis said, ''we have turned our negative position to positive.''

SABAH (LIBERAL)

Yalova, who was elected as parliamentarian from Aydin, a tobacco producer province, said, ''I have told the IMF that I will not sign the Tobacco Law which does not suit to my conscience.''

This irresponsibility of Yalova, who forgot the serious difficulties of economy, brought benefit to those who made use of opportunities.

Ankara immediately intervened to put out the fire. Prime Minister Bulent Ecevit and Deputy Prime Minister Mesut Yilmaz made statements saying that the words of Yalova did not reflect the views of the government.

KOHLER LOBBIES FOR TURKEY
Horst Kohler, the Managing Director of the International Monetary Fund (IMF), called on the international private finance institutions and the banks to increase their credits to Turkey.

Kohler said Turkey, with the new program, promised to lift state intervention to economy.

Giving the examples of Turkey and Argentine, Kohler said both of those countries promised to respect the prosperity rights, noting that it was a great opportunity for investment.

CUMHURIYET (LEFT)

Pointing out that Turkey's demand to bring a geographical limitation, pertaining to ESDP, was important, Ecevit said, ''they don't act sincerely toward us. They want to benefit from NATO facilities, but at the same time they want to exclude us.''

When asked if the EU tells Turkey to be on the front but not on the table, Ecevit said, ''different interpretations can be made. I have talked to Foreign Minister Ismail Cem on the phone and got information. He mentioned some developments regarded with restriction of operation regions. Those may be positive developments, but not in the level we desired.''

DERVIS TO CONVEY THE SUCCESS OF KEMALISM
State Minister Kemal Dervis, responsible for economy, went to Italy for a two-day visit.

Dervis made a special meeting with Giulio Temonti, who is expected to be the economy minister in the new government that will be set up in Italy. Dervis said, ''I have told him the economic program. He told me the economic situation in Italy and the preparations of this country to pass to Euro in the year 2002.''

RADIKAL (LEFT)

According to the plan, Turkey passport will be given to TRNC citizens in six months. The TRNC citizens would not be obliged to pay 50,000 U.S. dollars to make business in Turkey.

WARNING FROM CHHIBBER
Ajay Chhibber, the World Bank Turkey Representative, said any delay in the economy program would cost high, noting that the interests would increase, and there would be devaluation.

TURKIYE (RIGHT)

TREASURY PROGRAMS TO RAISE NET 4.4 QUADRILLION TURKISH LIRAS THROUGH 4 BOND
AUCTIONS
Treasury Undersecretariat announced on Thursday its cash projections and borrowing program for June of 2001.

Releasing a statement, Treasury said that it programmed to make minimum 4.4 quadrillion Turkish liras (TL) of net borrowing through four bond auctions in June.

ZAMAN (CONSERVATIVE)

Heavy rain is expected in northern regions at the weekend.

DERVIS: THERE IS NO REASON FOR CONCERN
State Minister Kemal Dervis, currently in Italy, made a written statement following the statements of state minister Yuksel Yalova which targeted him and the intent letter given to the International Monetary Fund (IMF).

Dervis recalled that the policies, included in the economy program, were determined by the government, noting that leaders of the parties which form the coalition government expressed their determination to implement the program.

[02] MINOR QUAKE IN BALIKESIR

Officials in Istanbul-based Kandilli Observatory Seismology Institute said the quake was measuring 4.1 on the Richter scale.

Officials said the epicenter of the quake was Ayvalik township.

[03] IMF DELEGATION STARTS CONTACTS IN ANKARA

Some of the IMF experts in Turkey desk started contacts in Treasury today.

Juha Kahkonen, the Turkey Desk Chief, is expected to arrive in Ankara in the afternoon and attend the talks.

Another group from the IMF experts continue contacts with the concerned institutions apart from Treasury.

IMF delegation will hold contacts in the Treasury, State Planning Institute, Finance Ministry, Privatization Administration, and Banking Regulatory and Supervisory Board. State Minister Kemal Dervis is expected to participate in the works of the IMF delegation at the weekend.

Within the framework of 8th review, the IMF delegation is expected to stay in Turkey for nearly 10 days. In case the talks end in its normal process, the IMF delegation is expected to depart from Turkey next Friday after holding a news conference.

The delegation will observe whether or not performance criteria have been fulfilled, and it will propose IMF Board to approve the 1.5 billion U.S. dollars of second tranche of loan after June 25 if those criteria have been fulfilled.

Those are the conditions required to complete the eighth review:

''Lifting of the overnight obligations of banks which were transferred to the Savings Deposit and Insurance Fund (SDIF) and public banks, repo stocks of banks transferred to SDIF and public banks with Central Bank should not be above seven quadrillion lira, closure of Emlak Bankasi and transfer of its some commitments and assests to Ziraat Bankasi, foundation of a second transition bank for the four banks which did not receive any offers at the moment and transfer of those banks, appointment of a professional executive board and administration for Turk Telekom, passage of Tobacco Law from the Parliament, adoption of additional budget which is in line with the program expenditure figures, implementation of the tax arrangement regarded with spreading of usage of tax identity numbers.

Turkey is obliged to fulfil the above conditions till June 25 to get the 1.5 billion U.S. dollars of second tranche of loan.

[04] SALE OF MANAVGAT WATER TO ISRAEL -TURKISH AND ISRAELI OFFICIALS DISCUSS FUTURE OF PROJECT AT A MEETING HELD IN JERUSALEM

Turkish and Israeli officials and experts attended the symposium entitled, ''Turkish Water, Caspian Energy: A National Security Priority for Israel and the West,'' staged by a think tank organization ''Institute for Advanced Strategic and Political Studies'' (IASPS).

Avigdor Liberman, the Israeli Infrastructure Minister, pointed out that water purchase from Turkey was one of the most urgent solutions that may be found to the water problem of Israel. Liberman said the project would realize the transfer of 45 million cubic meters water per year, noting that with this project, that amount of water will be transferred for the first time in the world. Liberman said he believed that the water will be obtained for an appropriate price.

Israeli officials stressed the requirement that cost of the Manavgat water should not be more than the cost of the water that will be obtained from the sea water purification installations.

Prof. Ali Ihsan Bagis, the Chairman of Hacettepe University Hydra-policy and Strategical Research and Development Center, pointed out that Turkey reduced the price of the water as long as possible, yet noted that it was impossible to give it free of change.

Bagis said, ''Israel is not the only customer. Talks are underway with countries like Malta and Libya. We want the Israelis to be logical.''

Ahmet Uzumcu, Turkey's Ambassador in Tel Aviv, said Turkey did not think of making profit from the sale of Manavgat water, adding that money that will be provided is needed for the operation costs of the installation.

Uzumcu said Turkey thought of using water sources not as a means of pressure, but to preserve peace and stability in the region.

Paul Michael Wihbey, one of the IASPS experts, said a new period started in the region, adding that the Caucasus basin gradually gained importance. He mentioned the requirement of a new regional structure covering Georgia, Armenia, Azerbaijan and extending to Southern Mediterranean via Turkey against the ''neo-Soviet attitude,'' of Moscow.

Wihbey said in such a structuring which covers cooperation in water and oil as well as security dimension and extending from Southern Caucasia to Negev, sale of Lebanon's water to Palestine, and realization of ''peace water project of Ozal and Demirel,'' were possible.

Wihbey said Washington will start to discuss this structuring soon.

Turkish-Israeli talks pertaining to Manavgat water were suspended till the results of the bidding, which was opened for the transfer of the water are determined.

Price bargaining will continue after the determination of the cost of transfer. It was reported that 15 companies submitted bids so far.

[05] INTERNATIONAL SCIENCE COUNCIL TO CONVENE IN ANKARA

According to a statement made by Turkish Co-Operatives Institute, 12 members from the European countries and representatives from Turkish Agriculture Credit Co-Operatives Central Union, and Pankobirlik will take place in Ankara Stad Hotel.

A panel discussion titled ''Daily Problems of Co-Operatives in Turkey and in the World, and Ways of Solution,'' will be staged the same day.

[06] STATE MINISTER DERVIS IN ITALY -STATE MINISTER DERVIS: ''ITALIAN BUSINESSMEN WANT TO INVEST IN TURKEY''

Noting that also the next three-four months period would be very difficult in which Turkey would continue to make self-sacrifices, Dervis said that Turkey's economy would be recovered at the end summer, new business opportunities and fields would be created and foreign investment and capital flow would increase.

Dervis who continues his contacts in Italy met with officials at the Association of Italian Industrialists and Businessmen (Confindustria).

Following his meeting with an 18-member Confindustria delegation, Dervis told reporters, ''Italy is ranked third in Turkey's foreign trade. They have great interest in Turkey. They closely follow the markets and want to invest in Turkey.''

Noting that they had discussed the real economy and economic program of Turkey, Dervis said, ''Italians want to invest in many sectors, particularly in banking sector, transportation, small and medium scale enterprises and tourism.''

Stressing that they had contacts within the Mediterranean friendship, Dervis said that Italian investments would be very beneficial for Turkey's real growth and self-confidence in the future.

Responding to questions about resignation of State Minister Yuksel Yalova for Privatization, Dervis said, ''we should not allow eruption of new crises. All of us agree with this obligation. There can be differences of opinion in every democracy. We should consider them natural. As the government, we support and are determined in this new economic program. Yesterday's event is an indicator of this determination. The program can be revised when necessary but we expect everyone to make self-sacrifices.''

Stressing that domestic and foreign public opinion had similar expectations from Turkey, Dervis said that everybody wanted Turkey to put the ''program for transition into sound economy'' into practice rapidly and within solidarity and determination.

Meanwhile, Confindisturia Board Deputy Chairman Giancarla Cerutti said that they attributed great importance to especially banking sector in Turkey.

Noting that they expected Dervis to give place also to Italian banks in the programmed reforms in the banking sector, Cerutti said that as Confindustria, they supported Italians who wanted to invest in banking sector in Turkey.

Stressing that Turkey was a country which couldn't be excluded from the European Union (EU), Cerutti said, ''a new Europe can't be considered without Turkey. Italy will be a much more important partner of Turkey when Turkey enters the EU.''

[07] PROCEDURE FOR TRANSFER OF EMLAKBANK'S BRANCH OFFICES SUSPENDED

Sources said that the procedure for transfer of Emlakbank's branch offices had started in accordance with bank's board decision on May 4, 2001 but this procedure was suspended on Friday with a decision taken on Thursday.

Meanwhile, Emlakbank's personnel were asked to increase the banking services as on June 1, 2001 as there had been positive developments about the bank.

[08] NATIONAL DEFENSE MINISTER CAKMAKOGLU CRICITICISES INEFFICIENT NEWS STORIES REGARDING CASA PLANES

''Such news stories were not in favor of Turkey and the Turkish Aerospace Industries (TAI) while there is Pakistan's demand in question for purchase of 250 more planes from Turkey,'' he said.

Cakmakoglu responded to questions of journalists before his meeting with Antalya Governor Ertugrul Dokuzoglu.

When asked whether or not Pakistan had given up purchasing CASA planes from Turkey after those planes had crashed one after the other, Cakmakoglu said that latest news included positive developments about sale of planes to Pakistan by Turkey.

''When the General Staff's statement about the issue is taken into consideration, it is seen that TAI achieved a specific success in plane industry. Exaggeration of plane crashes by media in a period when the TAI is very successful in production of several helicopters, light cargo planes and their spare parts and in a period when there is Pakistan's demand in question for purchase of 250 more planes from Turkey, is not in favor of Turkey and the TAI. Pakistan knows TAI and its facilities very well, so Pakistan's giving up purchasing planes from Turkey is out of question,'' he said.

When asked whether or not sale of new cargo planes from the United States as a replacement of CASA planes would be brought onto the agenda during U.S. Secretary of Defense Donald Rumsfeld's visit to Ankara on June 4, Cakmakoglu said that such an issue would not be brought onto the agenda.

Stressing that Turkey's cargo plane requirement had been determined earlier and according to that determination, it was seen that Turkey had sufficient number of cargo planes, Cakmakoglu said, ''we will hold discussions within scope of the opinions that Rumsfeld will express. The United States is our ally with which we are experiencing the best friendship period. We have bilateral agreements. We have partnership at the NATO. We abide by principles like peace and stability in the world. We are closely interested in especially the European Union and the problems in our region. Aslo the United States is interested in these issues. I suppose that we will exchange opinions on these issues.''

[09] FOREIGN MINISTRY SPOKESMAN DIRIOZ: -''WE WISH THAT AN ARRANGEMENT WHICH WILL SATISFY THE SIDES, WILL BE FOUND ON THE ISSUE OF ESDP''

Speaking at a weekly press conference, Dirioz said that contacts and works were continuing on the issue of ESDP.

''It is not possible for us to give you detailed information about these works. As it was stressed at the NATO Council of Ministers' meeting, it is not correct to announce any element till the sides reach an agreement on the whole issue,'' he said.

Responding to a question about news stories claiming that the problem of Piri Reis vessel between Turkey and Greece was resolved upon a guarantee of Turkey, Dirioz said, ''such a guarantee is out of question in our contacts with Greece. News stories about backward and forward steps are baseless. Turkey's all actions conform to agreements and conventions.''

Responding to another question, Dirioz said, ''allied and friendly countries and other relevant countries have started a consultation process about the U.S.' missile defense program. Turkey has welcomed this process.''

''Within framework of the U.S.' contacts with its leading allies, a delegation headed by Marc Grossman, the U.S. Under Secretary of State for Political Affairs, explained missile defense system to Ankara on May 11. We have been monitoring the developments both on bilateral level and within structure of the Alliance. Other comments and assessments are nothing but speculations,'' he emphasized.

Recalling that U.S. Secretary of Defense Donald Rumsfeld would come to Turkey on June 4, Dirioz said that Rumsfeld would exchange view with Turkish officials on defense and security relations between the two countries and on the international issues.

[10] LOSSES OF BANKS TRANSFERRED TO FUND REACH 5 BILLION U.S. DOLLARS AS OF END OF 2000

These banks' profit-loss figures in 1999 and 2000 according to the Turkish Banks Union (TBB) statistics are as follows:

. (billion TL)

. 1999 Year 2000 Year

Name of Bank Profit Profit

------------------ ------------ -----------
Interbank -161,140 -782,951

Etibank 2,664 -511,554

Esbank -537,161 -448,206

Egebank -642,160 -360,431

Yasarbank -585,353 -295,139

Bank Kapital 1,295 -283,714

Yurtbank -364,559 -241,465

Sumerbank -225,042 -138,210

Demirbank 107,765 -115,909

Bank Ekspres - 32,289 - 78,939

Turkbank 916 - 53,409

------------------ ---------- ---------
TOTAL -2,435,064 -3,309,927

[11] CENTRAL BANK: ''AVERAGE NET DOMESTIC ASSETS BECAME 7.9 QUADRILLION TURKISH LIRAS''

Releasing a statement, Central Bank said that average net domestic assests was 7 quadrillion 942 trillion Turkish liras (TL), average money basis was 5 quadrillion 815 trillion TL and decrease in net international reserves became 837 million U.S. dollars as of May 31, 2001.

The letter of intent which was submitted to the International Monetary Fund on May 3, 2001 set the average net domestic assets and decrease in net international reserves as performance criteria and foresaw that average net domestic assets should be below 9 quadrillion 750 trillion TL in last five days of May and decrease in net international reserves should remain below 1.5 billion U.S. dollars between end of April and end of May.

[12] IMF'S TURKEY DESK CHIEF KAHKONEN IN ANKARA -''ECONOMIC PROGRAM IS A VERY POWERFUL PROGRAM AND THE GOVERNMENT STARTED IT IN A SUCCESSFUL WAY''

Kahkonen arrived in Ankara in the afternoon within framework of the eighth review visit.

Speaking to journalists at Ankara's Esenboga Airport, Kahkonen said that he would met with economy officials and some ministers within framework of the review visit.

When asked whether or not delay in implementation of the economic program would cause problem, Kahkonen said that he couldn't make an assessment about this issue.

Kahkonen added that he would hold a press conference after wrapping up his visit.

Meanwhile, Kahkonen would get information about the economy at the Treasury Undersecretariat the same day, sources said.

Other experts in the IMF delegation continue their works which they started at the Treasury and Central Bank early the same day.

Sources said that IMF experts got information about the monetary policy, general public finance balance and state economic enterprises.

[13] DEPUTY PREMIER YILMAZ IN TRNC -''ALL OF THE EXERCISES WHICH HAVE BEEN CARRIED OUT REGARDING THE CYPRUS ISSUE AND INITIATIVES FOR SOLUTION SO FAR SHOULD HAVE PROVED THAT ANY SOLUTION WHICH IGNORES THE TRNC'S SOVEREIGNTY IS NOT POSSIBLE''

Yilmaz and TRNC Prime Minister Dervis Eroglu held a joint press conference at Lefkosa's Ercan Airport.

Eroglu said that they had been expecting Yilmaz for a long time and they were pleased with Yilmaz's visit to the TRNC.

Noting that Yilmaz would pay a short visit to the TRNC, Eroglu said that they wanted to convey their problems to Yilmaz during this short visit.

Eroglu said that the TRNC's existing problems would be solved through cooperation of the Turkish and the TRNC governments and that the stable program which was followed also in foreign politics would continue.

Mesut Yilmaz said that he would convey Ankara's latest assessments and opinions about the latest point reached in the Cyprus issue during his contacts in the TRNC. ''Also the domestic developments in the TRNC are experiencing an intense period,'' he said.

Noting that he would get opinion also about those developments during his contacts, Yilmaz said, ''I will once again confirm the Turkish government's support to the TRNC government and to our Turkish Cypriot brothers and sisters.''

Recalling that the Partnership Council Agreement between Turkey and the TRNC had been signed in August of 1997 when he was the Prime Minister, Yilmaz said that the economic crisis had prevented implementation of this agreement at the desired level.

Noting that many bilateral agreements based on this frame agreement had been put into practice so far, Yilmaz said that they aimed to implement a broad encouragement system which also covered the TRNC and that all of the infrastructural and preliminary works on this system had been finalized.

When asked by a journalist, ''TRNC has also been experiencing economic difficulties. Will Turkey send a supplementary aid to the TRNC?'' Yilmaz said, ''first of all, I have to inform the government officials on the issue.''

Yilmaz said, ''we are aware of the fact that some supplementary aid was needed as a result of change in Turkish currency's external value and besides commitments within framework of the bilateral agreements. We will take all necessary measures soon.''

When asked, ''Prime Minister Bulent Ecevit proposed the model of Czechoslovakia and the system of presidency. Do you support these proposals?'' Yilmaz told reporters, ''Cyprus's preference about its domestic order depends on its own will. Some different opinions may be put forward. The TRNC has been living through developments of a democratic society since it was founded in 1983. I believe that the TRNC would put into practice the most appropriate model in the course of time.''

''All of the exercises which had been carried out regarding the Cyprus issue and initiatives for solution so far should have proved that any solution which ignored the sovereignty of the TRNC was not possible. We think that the most appropriate solution to Cyprus question is a confederation based on equal sovereignty of two communities on the island, '' he said.

Yilmaz added, ''unfortunately, our support is not adequate to solution. The same will should be put forward by our interlocutors. If initiatives to find a solution protecting joint benefits of the two communities fail, the current situation on the island, two separate independent states will inevitably emerge as a lasting solution. I suppose that the Prime Minister wanted to stress this

fact.''

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