Predictability a major problem, says Babacan

ISTANBUL- Hürriyet Daily News

Participants in the forum listen to Deputy PM Babacan as he delivers his speech. DAILY NEWS photo

Many countries today are experiencing an unpredictability problem, as the amount of the money printed by central banks has reached a high level, not seen in recent history, according to Turkish Deputy Prime Minister Ali Babacan.

“Problems in growth and development are seen in many countries,” Babacan said, speaking at TOBB’s Istanbul Business Forum.

Neighboring Europe is facing great confusion, he said. “Europe is suffering from a serious gap of leadership. There is not only a budget gap, a public gap, but also a political leadership gap in the European Union. The EU is trying to secure its 10-year monetary union, but is just realizing that this is not sustainable without a fiscal union, a banking union,” he said.

The crisis has directed some governments toward populist policies, he said. “Populism is not limited to overspending. Protectionist policies are also counted as populism,” he said, criticizing the approach of raising trade walls. Turkey brought about important reforms between 2002 and 2008, Babacan said, saying that these were very crucial steps before the global crisis hit the world. “We took important steps toward a democracy that works better. We took steps to make Turkey a state of law. We took steps on basic rights and freedoms,” he said. Turkey changed its healthcare and banking systems between 2002 and 2007, which saved the country’s economy the crisis, he added.