Minister warns of ‘baseless speculations’ over Turkish economy

ANKARA

Businesses and investors should guard against “baseless speculations” about the Turkish economy, Economy Minister Nihat Zeybekci has said.

Zeybekci’s comments followed media reports saying Germany is actively working to cut funds to Turkey from the German-owned KfW bank, the European Investment Bank, and the European Bank for Reconstruction and Development (EBRD).

“Institutions such as the EBRD have announced that the report is completely unfounded and that no such decision has been taken,” Zeybekci said.

“Turkey paying the price for speculation is unacceptable,” he added.

The country currently has no problem in fulfilling its private and public sector short-term liabilities, and expects this to continue, Zeybekci added.

Answering state-run Anadolu Agency’s questions via email, the European Investment Bank (EIB) said that over the past 10 years it has provided over 2 billion euros (around $2.4 billion) per year in new loans for Turkish projects.

On the bank’s history in Turkey, EIB spokesman Marco Santarelli said it significantly increased its lending volume after 2005, when Turkey’s EU accession negotiations launched.

“Leading examples are construction of a rail tunnel under the Bosphorus, the high-speed train connection between Istanbul and Ankara, the TERRA program of rebuilding after the 1999 earthquake, and the improvement of earthquake protection,” Santarelli added.

He also said the EIB’s “three main pillars” of engagement in the country have been support for infrastructure projects, loans to banks for on-lending to small- and medium-sized enterprises (SMEs), and direct loans to businesses, especially in the fields of energy and research.

So far this year, the EIB has signed six finance contracts for projects in Turkey with a total value of 507 million euros ($597 million).

“It is at present not possible to make a forecast for the whole of 2017, but it can be expected that the financing volume will turn out to be markedly lower than in previous years,” Santarelli added.

Commenting on the reports, Deputy Prime Minister Mehmet Şimşek, who is responsible for the economy, tweeted that he recently met with the EBRD management.

“They noted that around 1.65 billion euros have been earmarked for their investments in Turkey in 2018,” Şimşek said.

Earlier, the EBRD said it remains committed to Turkey and continues to engage with the country.

“Turkey plays an extremely important role in the EBRD’s operations,” the bank told Anadolu Agency late on Oct. 25.

It also said Turkey is its largest country of operation by annual investment volume and portfolio size.

“To date we have invested over 9.5 billion euros [or $11.2 billion],” it said, adding that so far this year 30 projects worth almost 1 billion euros [$1.2 billion] have been signed.

“We expect to exceed 1.5 billion euros [$1.8 billion] in investment in 2017,” it said.

The EBRD is a leading investor in Turkey, which was the biggest recipient of EBRD funds last year and has offices in Istanbul, Ankara, and Gaziantep.

The bank has invested in 240 projects in Turkey, with 97 percent in the private sector, including projects for infrastructure, sustainable energy, agribusiness, industry, and finance, according to its website.