Turkey's parliament passed Wednesday, April 11, a law aimed at covering huge losses made by three public banks and a dozen private banks under state control, a reform listed among priority measures to overhaul the crisis-hit economy, Anatolia news agency reported.
The bill, which amends the budget law, allows the treasury to issue special bonds to generate sources for banking reforms. It effectively includes the debts of the public banks, estimated at about $20 billion, in the budget.
The legislation also introduces a series of other technical measures to rehabilitate the institutions before putting them up for sale. Economy Minister Kemal Dervis has listed several other legal amendments to reform the ailing banking sector and speed up privatization, which are yet to be submitted to parliament by the government.
The reforms are of significant importance for the government as it seeks to repair its credibility amid efforts to win a foreign aid of some $12 billion. But international creditors have made it clear that they could extend help only after Turkey comes up with a credible economic program, which the government is expected to announce within several days.
A financial shake-up, sparked by fears of political instability, forced Ankara on February 22 to float the Turkish lira, effectively disrupting an IMF-backed disinflation program in place since December 1999.
The currency has so far lost more than 40 percent of its value against the dollar, pushing inflation up and triggering violent street protests against the government, which has so far rejected angry calls to resign. — (AFP, Ankara)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)