G-7 finance ministers back Turkish recovery plan

Published March 20th, 2001 - 02:00 GMT

Finance ministers and central bank governors from the Group of Seven nations on Monday, March 19, issued a joint statement welcoming Turkey's recently announced economic reform package and stressed that compliance was "absolutely critical." 


The statement, released here by the US Treasury Department, said the program would "rightly focus on achieving low inflation and sustainable public finances through sound fiscal and monetary policies." 


Faced with an acute cash crunch, and in an atmosphere of political crisis, the government on February 22 abandoned a pegged exchange rate and floated the lira, the national currency. The move breached a three-year anti-inflation plan backed by the International Monetary Fund that had been in place since December 1999. 


Under new measures adopted last week, the government is to restructure and privatize the country's three public banks, which have lost about $20 billion, and is to remedy structural weaknesses in private banks. It will also accelerate privatization to increase revenues for the cash-strapped state and impose strict limitations on spending. 


"Long-term political commitment by the Turkish authorities to rigorous implementation of their program remains absolutely critical to its success," the G7 statement said. “A return of market confidence and the continuous engagement of the private sector are also critical for the Turkish economic recovery." 


The G7 groups Britain, Canada, France, Germany, Italy, Japan and the United States. 


Turkish Economy Minister Kemal Dervis earlier Monday announced agreement with the IMF on a revised economic program, marking another step toward restoring foreign confidence. 


He said Turkey would outline details of the new arrangement with the IMF and would submit a letter of intent to the Fund in mid-April. The IMF executive board plans to review the program in late April. — (AFP, Washington) 


© Agence France Presse 2001

© 2001 Mena Report (www.menareport.com)

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