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Babacan warns of economic fallout reform package is rejected in referendum

Babacan warns of economic fallout reform package is rejected in referendum

Reforms in the constitutional reform package set to face a referendum next Sunday will strengthen democracy by closing loopholes in Turkey's judicial system which allowed anti-democratic interventions, Deputy Prime Minister for the Economy Ali Babacan said over the weekend. Speaking in a televised interview, Babacan said that if approved, the package would make Turkey a country truly under the rule of law. It will also lay the groundwork for a major overhaul of the country's judicial system in line with the principles of democracy, he added, and make Turkey a more stable, predictable country. If the package is approved, "it will have a good impact on the country's economy in the mid-term," he predicted. But, he warned, "if the package fails to pass the referendum, Turkey will have lost an important opportunity. While Turkey is emerging as an island of stability and success amid the global economic downturn, rejection of the referendum would make Turkey seem like a country moving backwards, one distant from reform efforts. This would certainly have short-, mid-, and long-term effects on the economy as well. Turkey would pay a price for this." Asked about exchange rates, Babacan ruled out the government backtracking from the current free exchange rate system, saying they would determinedly maintain it. Warning that shifting to a fixed exchange rate system would drag Turkey into an economic disaster much like 2001, Babacan said, "The free exchange rate system functions as an important mechanism that protects Turkey from outside shocks by cushioning us like an airbag." The best thing thing for the rate system is to leave it to the free market, Babacan said. Stressing that the government prioritizes stability, not the rate system itself, Babacan added, "As Turkey grows stronger economically, it is inevitable that the Turkish currency becomes stronger." In related news, Prime Minister Recep Tayyip Erdogan has stated that most polls indicate the constitutional amendment package will pass in next week's referendum; however, he added that his Justice and Development Party (AK Party) would not treat the "yes" as a vote for the AK Party. Speaking to journalists onboard his private jet as he made his way back to Ankara from a campaign rally in Diyarbakir, Erdogan assured journalists that his party would not interpret support for the package as support for his party. He said, "You won't hear us saying we now have a vote of confidence."

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