IMF deal not imperative

June 11, 2009
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, ANKARA, June 11 – Turkey said Thursday it could do without a  fresh stand-by credit from the International Monetary Fund (IMF) and was strong enough to weather the global slowdown.

"We are not obliged to a deal. Will we die if we do not have the IMF? If need be, we can tell them that the deal is not going to happen. Turkey has that strength," Prime Minister Recep Tayyip Erdogan said in an interview with the NTV news channel.

Turkey has been negotiating with the IMF for a new three-year stand-by deal since a 10-billion-dollar (7.0-billion-euro) programme expired in May last year. But the two sides have yet to reach a conclusion.

Recent press reports have suggested there is no cabinet consensus on an IMF credit, which financial markets and business leaders say would boost investor confidence in the emerging market economy.

Erdogan reiterated that his government would not sign a deal that would be against the country\’s interests and criticized what he called political demands from the IMF.

"They want us to make the tax administration autonomous … We cannot accept that. We will not agree to political fiat," he added.

Ankara was hoping to conclude negotiations with the Fund by the end of the summer, Erdogan said.

"We do not want to protract this business. It will finish one way or another soon," the prime minister said.

The global economic crisis has taken a heavy toll on the Turkish economy, which contracted 6.2 percent in the last quarter of 2008 in its first decline in 27 quarters.

Deputy Prime Minister Ali Babacan said this week that the contraction this year could be worse than the government\’s estimate of 3.6 percent while the IMF has said that the Turkish economy will likely shrink 5.1 percent in 2009.

However, the global slowdown has also cut Turkey\’s imports, which in turn has reduced its current accounts deficit and eased its need for foreign financing.
 

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