Simsek Sees Turkish ‘Window of Opportunity’ After Referendum

  • Referendum may be ‘catalyst’ to put economic reforms on track
  • Turkey is aware that Dutch suffered under Nazis, Simsek says

Turkey may have a “window of opportunity” to put the country on stronger economic footing following an April referendum in which the president is seeking to expand his powers, according to Deputy Prime Minister Mehmet Simsek.

Turkey, which reported some of its worst budget and unemployment data since 2009, has failed to deliver on policy steps that were part of its road map for structural reforms because “many domestic and external shocks got in the way,” Simsek told Bloomberg Television at a meeting of Group of 20 finance chiefs in the German spa town of Baden-Baden.

“I do hope and I think that the outcome of the referendum in mid-April could serve as a catalyst,” Simsek said. “That gives us a real window of opportunity to push through these outstanding structural reforms. Turkey needs a closure to put behind this difficult episode.”

Ahead of an April 16 referendum on constitutional changes that would transfer sweeping powers to President Recep Tayyip Erdogan, the government is increasing spending and rolling out tax breaks and other incentives to spur growth in an economy that’s struggling to recover from last year’s failed coup, which led to a contraction in the third quarter.

Jobless Rate

Turkey ran a budget deficit of 6.8 billion liras ($1.9 billion) in February, the biggest shortfall for the month in eight years, while youth joblessness surged to 24 percent in December, the highest level since April 2009. Credit rating firm Moody’s Investors Service lowered the country’s outlook on Friday, citing persistent political uncertainty.

Simsek confirmed that he previously held talks with German Finance Minister Wolfgang Schaeuble to “deepen and broaden” the partnership between the two countries “that would include, of course, economic cooperation.” After Schaeuble said that the talks were put on hold following the arrest of a journalist whom Erdogan has accused of supporting terrorism, Simsek said he’s “sure we’ll go forward.”

To read about the confrontation between Turkey, Netherlands, click here.

“Turkey and Germany have very strong ties and I think they are likely to be sustained, regardless of the occasional mishaps or occasional issues,” Simsek said, without providing details. Deniz Yucel, a German-Turkish dual national, was placed under arrest on Feb. 27.

Erdogan has clashed with European leaders this month as he seeks to build support among Turkish expatriate voters for an executive presidency ahead of the referendum. When two German municipalities cited safety concerns for blocking a rally, Erdogan responded that the rulings were “not different from Nazi practices.”

Denied Entry

In the Netherlands, Turkish Family Affairs Minister Fatma Kaya was denied entry into her consulate and escorted to the border with Germany, prompting similar accusations. Turkey said they wouldn’t allow a Dutch ambassador back into the country and canceled flight permissions for diplomats from the Netherlands.

“I think the president was referring more to the behavior rather than the actual historic context,” Simsek said, adding that words were expressed in anger and frustration. “We know of course that the Dutch suffered from the Nazis, no question about it.”

Even so, Dutch behavior “certainly doesn’t comply with European standards, code of conducts,” Simsek said, citing European values including the freedom of speech and the freedom of gathering. “It was a very unfortunate incident.”