TURKEY - The International Monetary Fund (IMF) is "confident" the structural reforms in the Turkish pension system, which it says are "absolutely important and necessary" for economic stability, "will go on".
 
Dominique Strauss-Kahn, managing director of the IMF, confirmed at a press briefing the IMF is "monitoring very closely what is happening in Turkey" as the country's existing IMF Stand-By Arrangement  - designed to help countries address short-term balance of payments problems - will expire in May 2008.

In relation to the current global economic turmoil, Strauss-Kahn said there is no reason why Turkey should be "immune" from the crisis, and admitted the IMF would take that into account when reviewing the stand-by arrangement.

However, he said: "What now concerns us with the Turkish situation is the way they complete some structural reforms, especially structural reforms in the pension system."

He also claimed "those reforms are absolutely important and necessary for the [economic] program to go on and for the target of the program to be achieved".

That said, Strauss-Kahn said he was "confident in the government and in Mr Simsek" - the Turkish minister of finance - "that they will go on and succeed in this", although he admitted it "has not been done totally already".

He said: "There have been some legal problems with the court, and the possibility to implement this new pension system - which is absolutely necessary for the soundness of the public finance - has been postponed. So that is now my main concern on what is going on in Turkey."

The existing three-year Stand-by Arrangement was approved in 2005, providing Turkey with access to around $10bn (€6.3bn) to support its economic and financial program.

Strauss-Kahn added: "The relations between the IMF and the government, as far as economic concerns go, are good. I hope that despite the financial turmoil, despite the unavoidable problem of implementing a program, all the targets of the program will be reached in the coming weeks."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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