Former central bank governor sees coalition government as source of stability

Vahap Munyar - ANKARA

DHA Photo

Economic stability can be maintained by through a coalition government amid many problems in the economy both from inside and outside, according to former Central Bank head and deputy from the Nationalist Movement Party (MHP), Durmuş Yılmaz. 

“Stability can be ensured through a coalition government in Turkey in the coming period. Although there is a common perception that coalitions bring about instability, but majority cabinets stability, the majority government in Turkey has now become a source of instability as it uses too much power,” he said in a business meeting organized by the Union of Chambers and Commodity Exchanges of Turkey (TOBB) in Ankara. 

Yılmaz also said the government gives no room to the opposition. 

“Therefore, a coalition government will be able to maintain stability in Turkey,” he added. 

The political parties composing a coalition cabinet need to remove any tax inspection fears on companies, according to him. They also need to announce they will obey rules and reestablish the rule of law. 

“These steps will open the road for stability,” Yılmaz said. 

He said savings are very limited in a low rate environment and investments are not increasing due to uncertainties. 

“Sudden tax inspection fears over companies are now added to this equation,” he said, adding that there have been uncertainties inside and outside the economy now. 

“Turkey’s private sector needs to pay around $225 billion in 2015. Their long-term debts stand at around $185 billion… Even a 20 kuruş rise in the U.S. dollar’s value against the Turkish Lira creates an additional 16-17 billion liras of financial burden on the 500 biggest industrial companies of the Istanbul Chamber of Industry in total,” he said. 

Yılmaz took steps in developing the country’s successful monetary policy between 2006 and 2011. Yılmaz was also chief economy adviser to the 11th president of Turkey, Abdullah Gül, until Gül’s presidency came to an end last year. 

Yılmaz was elected from the Aegean province of Uşak as an MP for the MHP in the last elections.