Babacan expresses cautious optimism for global recovery, calls for more anti-crisis measures

Speaking at a meeting of the European Association of Chambers of Commerce and Industry (EUROCHAMBERS) in Istanbul yesterday, Deputy Prime Minister for the Economy Ali Babacan expressed concern over the sustained recovery of the global economy, citing as reasons issues such as rising public debt and a reversal of stimulus plans. "In an environment where countries' public debts have grown to such high levels, it is worrying that developed countries haven't been able to take concrete steps to reduce their public debt stocks back to normal levels," he said. Stating that the world economy had started to show initial signs of recovery from the crisis thanks to extraordinary measures taken in the finance sector, he added, "It will take a while to reach normalization in the world banking sector. There are deep economic problems in Europe, and some countries should make tough decisions during this period." Extraordinary measures in the finance industry and public finance prevented the crisis from turning into a serious economic and financial collapse, said Babacan. "Measures taken in monetary policies and reduction in government budgets have also helped significantly. However, who can really tell what will happen once these measures are dropped," he said. Will the recovery continue on its path, he asked, adding that there are too many question marks surrounding the future. "We're talking about a recovery process that doesn't have its own dynamic," he said. "That's a significant problem. When we take a look at the general recovery of economies around the world, we don't see an equally distributed recovery. While Asia is recovering rapidly, the recovery in Europe and the US is quite slow." Babacan also stressed that Europe's aging demographics and shrinking workforce won't help its recovery. Also speaking at the event, Turkish Union of Chambers and Commodity Exchanges (TOBB) President and EUROCHAMBERS Deputy Chairman Rifat Hisarciklioglu criticized the customs union with the EU, stating that the visa and transportation barriers set up by the EU mean that trade is far from free. He stressed that the customs union calls for free trade between signatories but still maintains strict visa requirements for Turkish businesspeople seeking to export to Europe.