Speaking at a meeting at the Istanbul Chamber of Industry, or ISO, Minister of Industry and Trade Zafer Çağlayan said the banking sector does not have the right “to sit on deposits that they collected from the market.”

There are two main factors that are deepening troubles in the market, said Çağlayan. “First of all, clinging to old habits, the banking sector lowered the amount of loans that it provides for the private sector. It also increased interest rates and recalled some loans,” he said. “As the private sector tries to secure itself, a contraction is triggered. But the banking sector cannot brood on the money that it collects.”

The government is working hard on the issue, said Çağlayan. “We provide credit to the private sector via the Small and Medium Industry Development Organization, or KOSGEB,” said Çağlayan. “The amount of credits that KOSGEB provided has reached YTL 1.6 billion in 2008.”

Dynamism, young population
“We are at the very beginning of the crisis,” said Çağlayan. “But Turkey could be the fastest country in overcoming the crisis due to its dynamism and young population.”

Commenting on criticisms on the absence of a “rescue package,” Çağlayan said the government has taken “many measures” so far.

“We established a pro-active approach. There are still lots of things to do and we will do what it takes to protect the country form the crisis, without forfeiting budget discipline,” he said.

Speaking at the same meeting, State Minister Nazım Ekren said the government has the economic tools to “intervene instantly” when there is a problem in the private sector.

“Seeing the crisis as an opportunity, we may launch a new generation reform process,” said Ekren.