Babacan: Turkey's fiscal rule contitues an wxample for troubled Eurozone

The Turkish government’s successfully implemented fiscal rule for budgetary performance could serve as a model for the eurozone, Deputy Prime Minister for the Economy Ali Babacan said yesterday. The eurozone “is in need of a fiscal order similar to that of Turkey’s,” Babacan said. Speaking to reporters, Babacan said that during his talks with finance and economy ministers from European Union countries, he observed that they were also on a quest for fiscal order. “EU Economy Commissioner Olli Rehn told me in a recent meeting that the union would study Turkey’s experience in fiscal rule closely. The EU needs to implement a well-organized fiscal order that comprises the necessary measures and control mechanisms,” Babacan said. He noted that strong monetary unity was important for the union but said its monetary policies should definitely be supported by fiscal policy. Turkey differs from the EU economies in that it has managed to take its debt stock under control, Babacan said, while European countries have only recently begun to employ recovery strategies implemented by Turkey last September. Babacan also said the crisis in the EU’s economy would create new opportunities for Turkey. Due to the contraction in the European market, small and medium-sized enterprises (SMEs) in Europe will come to Turkey to invest due to the nation’s burgeoning economic growth and improvement in domestic market confidence, Babacan asserted. Mentioning numerous SMEs in Germany and Italy in particular, Babacan said Turkey presents an excellent investment environment for such enterprises, also noting that Turkey will continue its structural reform process with new-generation reforms it plans to implement in the coming period. Calling these reforms the “improvement of the business and investment environment, the Code of Obligations and the Commercial Law, refined reforms in the banking sector, the structuring of revenue administration, taxes and informality,” Babacan said he believed the most important structural reform Turkey must accomplish is the reform of its judiciary.