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    Turkish PM says stand-by deal with IMF not necessary

    HotNewsTurkey Staff
    31.10.2008 - 12:53 | Son Güncelleme: 31.10.2008 - 17:11

    A new stand-by deal between Turkey and the International Monetary Fund (IMF) is not necessary and the government would not accept harsh agreement terms, Turkish PM reiterated on Friday. The opposition CHP slammed the PM over his remarks. (UPDATED)

    Turkey has been holding talks with the IMF for a potential precautionary stand-by loan to partly address market worries. However the government is extremely reluctant to sign a new deal and claims the economy is sound despite the global economic crisis.

     

    "If the IMF says ‘curb growth and stop investments’, then we can’t reach an agreement," Erdogan said.

     

    It was the second public opposition voiced this week. Erdogan had earlier said on Tuesday the government may not sign a new loan accord if the global lender exerted excessive constraints on budget spending, tax rates, economic growth and investments.

     

    However Erdogan said they would meet at a point if the IMF shows an attitude based on mutual interests. "We are not an administration that is against the IMF," he added.

     

    Business leaders have called on the government to secure another loan deal to help limit the fallout from the global financial crisis that has already forced Ukraine, Iceland and Hungary to seek IMF help.

     

    Turkey's previous $10 billion IMF stand-by deal -- which stipulated conditions related to loans -- expired in May.

     

    TALKS CONTINUE-ECONOMY MINISTER

    Turkey and the IMF disagree on spending policies under a possible pre-emptive stand-by deal, but talks continue in a "constructive" climate, Economy Minister Mehmet Simsek also said in an interview with NTV television.

     

    "If we are to agree on a program... it should ease the effect of the (global financial) crisis on Turkey," he said.

     

    The minister added that "certain flexibility is required" on the part of the IMF, he added.

     

    "There is no agreement yet but we continue to maintain a constructive attitude on the issue," he said.

     

    Simsek stressed that Turkey would not agree to a program that would "worsen the slowdown in growth... and create problems for the private sector".

     

    A precautionary stand-by program would allow Turkey access to IMF funds if needed.

     

    CHP SLAMS ERDOGAN

    Erdogan would have to make an agreement with the IMF whether he wants to or not, Republican People's Party (CHP) leader, Deniz Baykal, said on Friday.

     

    "It is understood that the prime minister is seeking a deal with the IMF, despite his all his showiness," he said.

     

    Baykal said an IMF deal was inevitable at this point, and added that Erdogan was late taking measures against the crisis.

     

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