Erdogan hopeful about a new standby agreement with IMF

On the sidelines of the World Economic Forum in Davos, Prime Minister Recep Tayyip Erdogan met on Wednesday with the International Monetary Fund First Deputy Managing Director John Lipsky. Commenting on the meeting yesterday, Premier Erdogan said that Turkey's comprehensive talks with the Fund on a possible standby deal would continue. "I believe the meeting was quite fruitful. There was an approach towards a solution. I hope we will reach a positive conclusion soon," he said. Asked about the meeting, State Minister for the Economy Mehmet Simsek said, "We have recorded significant progress and talks with the Fund will continue." Also the IMF spokesman David Hawley characterized the meeting as fruitful. He said that an IMF delegation was expected to leave for Turkey next month to conclude talks on the agreement. Hawley added that medium-term financial reform would be high on agenda of talks of the delegation in Ankara. Analysts are claiming that Turkey is insisting on measures to reinvigorate the domestic economy, whereas the IMF wants a more strictly disciplined fiscal policy and more primary surplus. Turkey objects to these impositions on the grounds that the IMF demands will cause further contraction in the economy at a time when it needs a way out from an approaching recession. In related news, "Problems with the global economy should be revised and be supervised with a news global mechanism," Foreign Minister Ali Babacan told a TV interview in Davos yesterday. "It has to be understood here that a new global architecture has to be established to regulate and supervise global economic matters. No country, including the US, can be excluded from this regulation and supervision mechanism. Seeing that a serious problem in one country is affecting all the open economies of the world, then no country should say 'This is my own business and no one can interfere.' Since one fault in one country has affected everyone, then the whole world has the right to deal with this fault," he said.