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Officials say progress made in Turkey-IMF talks

Güncelleme Tarihi:

Officials say progress made in Turkey-IMF talks
Oluşturulma Tarihi: Şubat 17, 2009 10:17

Turkey and the IMF made important progress on the talks regarding a new deal, broadcaster CNNTurk reported on Tuesday citing officials close to the negotiations

Haberin Devamı

However progress in the talks is not enough to invite a delegation from the Fund to Ankara for further face-to-face negotiations, CNNTurk added.

The unsolved issues between the parties are stemming from three issues including determining the fiscal rule, constraining local government spending and improving the effectiveness and transparency of tax collection, the report said citing an official.

According to the report, the way in which the middle-term fiscal rule, seen as an anchor for Turkey’s economy, is determined is one of the main points of discussion with the Fund. Since the Fund expects some 1.5 percent contraction in the Turkish economy in 2009, it says the middle-term measures would be very important, CNNTurk said.

Haberin Devamı

The Turkish government's approach to the IMF’s demands for discipline on spending is not positive, the report also said.

The talks between the IMF and the Turkish government had been suspended in late January, when Turkish Prime Minister Tayyip Erdogan said the Fund made two unacceptable demands, the details of which he did not elaborate.

The IMF also argues that widening tax base is more effective in tax collection than increasing the rate, it said

Turkey's increasing debt and concerns regarding how to sustain these debts is another issue which determines the path of the talks, the report added.

The Turkish government has been criticized over its reluctance to seal an IMF deal, after the latest $10 billion accord expired in May, ahead of the upcoming local elections due to the spending curbs imposed by the Fund.

CNNTurk also said an agreement with the Fund could be reached before the local elections being held March 29.

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