Exchange plummets following Turkey political turmoil
Turkish shares slumped by 11.54 percent on Monday, February 19, on fears of political instability after a crisis erupted between Turkish Prime Minister Bulent Ecevit and President Ahmet Necdet Sezer.
Turkish Prime Minister Bulent Ecevit walked out of a meeting Monday, February 19, angry at President Ahmet Necdet Sezer's criticism of his clampdown on corruption, in a clash that brought turmoil to Turkey's financial markets. Ecevit accused Sezer, a former head of the constitutional court, of making "grave accusations" against him at the monthly meeting of the National Security Council and declared that a "grave crisis" had erupted.
Sezer countered late Monday that the accusations were unjust and that a minister belonging to Ecevit's coalition government sparked the dispute. "Ecevit walked out of the meeting following inappropriate comments made by a minister, who failed to conform to the rules of politeness and respect," said a statement from the president's press office, which did not reveal the minister's name. "The accusations made against me (Sezer) are unjust," said the statement, adding that the president would continue to work towards a harmony between the various state institutions.
The prime minister had initially refused to disclose what was behind the dispute but later revealed that Sezer had expressed disapproval with his government's anti-corruption drive. "He was trying to give the impression that he did not think it was enough," Ecevit told reporters in Ankara, referring to the anti-corruption effort. "But he knows very well that the government has led a very intensive struggle against corruption since it came to power. That is why the president's allegations are unacceptable," he added.
Ecevit convened an emergency meeting of his cabinet over the outburst and his government demanded a public apology from Sezer for his show of "disrespect" to Ecevit. "What is expected from the president whose constitutional duty is to oversee the functioning of state bodies is to apologize in front of the public for this grave affair," the cabinet said in a written statement after the meeting.
Ecevit also chastised Sezer for sparking a crisis at a time when Turkey is trying to recover from the November 2000 cash crunch, which rocked financial markets and threatened to derail Ankara's stand-by deal with the International Monetary Fund.
"The fact that the president turned the National Security Council into an arena is an unprecedented example of irresponsibility. Despite this, we will do our utmost to prevent a new economic crisis," he said.
Within minutes of Ecevit's first uttering about the confrontation, the Istanbul stock market's national index plunged massively and closed at 8,683 points, after dropping 1,486 points or 14.6 percent. The index had closed at 10,709 on Friday.
Overnight interest rates soared to an average of 300 percent, reaching 760 percent in some transactions, while the central bank sold more than four billion dollars to banks. A foreign banker told AFP that the central bank had spent some $4.9 billion from its foreign currency reserves in three hours to prop up the Turkish lira.
In a bid to soothe the financial markets, Ecevit interrupted the emergency cabinet meeting to give assurances that the government would push ahead with an ambitious economic program. "The government is doing its job and will continue to implement the economic program and structural reforms with determination," the prime minister told reporters.
The IMF agreed in December to release about $10 billion in emergency aid to overcome the cash crunch, in return for which Turkey pledged to speed up privatization and reforms in its ailing banking sector.
Monday's dispute was the latest in a series of disagreements between Ecevit and Sezer who has often blocked government decrees on the grounds that they were against the constitution since being elected in May.
Since August, Sezer has rejected to sign government decrees aimed at purging public offices of employees with radical Islamic or separatist views, and the sell-off of three troubled state banks. Two weeks ago, Sezer also vetoed a government decree allowing the burial of a prominent Muslim leader in an ancient mosque built for 16th-century Ottoman ruler Suleyman the Magnificent. — (AFP, Ankara)
by Hande Culpan
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)