Turkey passes crucial bank privatization law
The Turkish parliament passed Wednesday, November 15, a law to allow the privatization of three state banks, one of the conditions for the release of millions of dollars of international loans.
The approved bill stipulates the restructuring and sale of the three banks -- Ziraat, Emlak and Halk banks -- in the three years following its enforcement and gives the cabinet a one-off right to extend this period by one-and-a-half years.
The privatization of the three troubled banks was one of the pledges Turkey made to the International Monetary Fund (IMF), the World Bank and Japan in return for several billion dollars in loans to reform its ailing economy.
Total losses by the three institutions since the beginning of the year are estimated at $25 billion.
The World Bank had suspended in July the scheduled release of $750 million for banking sector reforms in Turkey after Ankara failed to meet a June 30 deadline for adopting the decree privatizing the three banks.
Tokyo has reportedly put on hold another loan of $750 million for the same purpose.
The World Bank has pledged credits totalling three billion dollars over three years to provide an additional boost to an ambitous Turkish program of economic reforms approved by the IMF in December in a three-year, $4 billion stand-by deal.
The adoption of the privatization bill comes after a dispute between Turkish President Ahmet Necdet Sezer and Turkish Prime Minister Bulent Ecevit when the former rejected a government decree to the same effect in September.
An angry Ecevit had accused the president at the time of hampering crucial government work and rejecting to hold dialogue with the government on vital issues.— (AFP)
© Agence France Presse 2000