Break-up ‘a disaster’ for eurozone

LONDON - Anatolia News Agency

Ali Babacan, DHA photo

The possibility of a break-up of the eurozone is extremely dangerous, Turkish Deputy Prime Minister Ali Babacan said yesterday.

Leaving the European monetary union would be a “disaster” for any departing country, Babacan said in his speech at the “High Growth Markets Summit” organized by the Economist in London.

Many countries need urgent reforms in their fiscal structure and there are several reasons to be concerned about Europe’s economic situation, he said, adding that the latest decisions taken by the European Central Bank should not be used an excuse for countries that still have to fulfill structural reforms.

“We strongly advise our European friends to demonstrate a stronger sense of solidarity,” he said, adding that one country breaking away from the eurozone could lead other countries to breaking way.

Touching on the developments that have taken place in Turkish economy in the past decade, Babacan said the Turkish economy had grown by 9.2 percent in 2010 and 8.5 percent in 2011, adding that a lower growth was expected this year.

The Turkish Central Bank had done a good job fighting inflation and ensuring financial stability, he said.

Asked whether Turkey was still eager to join the European Union, he said that what was important for Turkey was to be involved in the negotiation process.

It is also very important for the new federal government in the United States to put forward a credible medium term program, as the number one economy in the world does not have the luxury of being unpredictable, Babacan also said.