Subscribe for 17¢ / day

ISTANBUL, Turkey (AP) – Turkey bowed to pressure from the International Monetary Fund on Monday, agreeing to make changes to the board of state-owned Turk Telekom in return for the release of a $1.6 billion loan.

The IMF last week halted the loan, part of a $15.7 billion crisis recovery package, citing Turkey’s failure to appoint a board of directors with private sector experience to Turk Telekom, the telecommunications monopoly slated for privatization. The World Bank followed suit, postponing a $1.7 billion loan to Turkey.

In a statement Monday, Prime Minister Bulent Ecevit said the government would summon Telekom’s general assembly to “make the necessary changes” to the company’s board.

Ecevit also said the government would accelerate the sale of private sector banks taken into receivership, another IMF concern.

Of 13 private banks seized by the government in the last three years, just one has been sold back to the private sector. Others have been merged, and Turkey’s banking watchdog is seeking buyers.

The government won IMF backing for a recovery program in May, after a financial crisis in which the nation’s currency fell nearly 50 percent against the dollar and hundreds of thousands of people lost their jobs.

The standoff over Telekom dragged Turkish shares down some 10 percent last week, and sent Treasury bond interest rates soaring to around 99 percent – fueling fears that Turkey may struggle to repay its mounting debts.

The government had met all its commitments and “had difficulty understanding why this issue has been considered so important” by the IMF, Ecevit said in a written statement. He said they decided to summon the Telekom assembly “to avoid overshadowing our relations with an artificial problem.”

Deputy Prime Minister Mesut Yilmaz said changes to the Telekom board necessary to secure the IMF loan would be completed by Wednesday. Neither Ecevit nor Yilmaz specified which changes would be made.

Copyright © 2001, Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

0
0
0
0
0