Babacan urges EU countries to rein in fiscal policy

Deputy Prime Minister for the Economy Ali Babacan said Friday that European countries need a fiscal rule similar to the one scheduled to be established in Turkey in 2012. The European Union countries which are already interested in applying the fiscal rule should "put it into practice," Babacan said at a fast-breaking Ramadan dinner attended by the owners of small- and medium-sized enterprises (SMEs) in Istanbul. "In my recent meetings with the economy ministers of EU member countries, I observed that many are interested in applying a fiscal rule," he said, adding that the Union can't rely solely on monetary policies which aren't supported by fiscal policies. Babacan said that EU Commissioner for Economic and Monetary Affairs Olli Rehn told EU economy ministers that he would monitor good examples of fiscal policies, such as Turkey. According to Babacan, Rehn also underlined Turkey's performance, saying that it has the potential to stick with good fiscal policy despite next year's general elections. Talking to the SME owners, he said EU countries have growing budget deficits, adding, "No matter what preventive programs they use, these deficits will remain for many years." These deficits will be a serious burden to future generations, he said.