Turkish officials on Monday, May 7, said two items of reform legislation promised to the IMF in return for some $10 billion in crisis aid could be delayed but vowed they would be passed soon.
The law to allow a sale of most of landline monopoly Turk Telekom and the banking reform law are both items in a range of reforms Turkey has pledged international lenders. Around half the reforms have so far become law but the two key items have lagged behind.
Economy Minister Kemal Dervis said drafting the Telekom law had run into "difficulties" but he was hopeful the bill would move on to parliament. "There is no legal problem with Telekom. I have never given up hope. There are a few difficulties, God willing it will be signed," Dervis told reporters as he went into a meeting with leaders of the coalition government. He did not elaborate.
The law allowing for a privatization of most of Telekom, most likely with a limit to foreign ownership and a golden share for the Turkish state, is a central pledge to the International Monetary Fund in return for some $10 billion in crisis loans.
But drafting the law has been slow, with reports of objections from both Turkey's influential generals on national security grounds and constitutional queries raised by nationalist Communications Minister Enis Oksuz.
Pledges to reform the ramshackle bank sector at the heart of Turkey's financial crises also appeared to hit a snag on Monday, when government spokesman Tunca Toskay said a bank reform bill had been held up in cabinet for last minute adjustments. "Because of developments and needs it was held up for a re-evaluation and change to some sections," he said.
"In relation to these changes our ministers clearly expressed to the cabinet the concerns of society. Particularly clearly expressed were the justified reactions against the owners of banks handed over to the fund and the continuing investigations and the importance of preparing a draft that gives a clear answer to them," Toskay said.
Criminal investigations into allegations that administrators at some of 13 banks in receivership misused funds crushed confidence in the sector in late November, necessitating some $7.5 billion in emergency loans from the Fund.
The banking law is keenly awaited by bankers and stock market investors and is expected to define a range of new standards for Turkey's overcrowded sector, including levels of capital requirements and reserves.
Toskay said the delay would not be long. "In all probability the draft will be sent to parliament today at 1700 (1400 GMT)," he said.
Specifying those banking standards is also expected to accelerate a process of consolidation in the sector, where 80-odd banks are struggling with thinner margins after crisis sent lending rates soaring and sparked a 40 percent fall in the value of the Turkish lira against the dollar.
The banking watchdog is offering the banks it administers for sale but few buyers have emerged. It announced on Monday that it had completed the merger of Ulusal Bank into Sumerbank, part of a merger process announced earlier for banks that attracted no bidders.
It had earlier decided to put Yasarbank, Bank Kapital, Yurtbank and Egebank together under Sumerbank. But Economy Minister Kemal Dervis's new financial program allows for a greater number of banks to be merged if the need arises. — (Reuters, Ankara)
By Hidir Goktas
© Reuters 2001
© 2001 Mena Report (www.menareport.com)