ISTANBUL (AFP) – Turkey and the International Monetary Fund (IMF) disagree on spending policies under a possible pre-emptive standby deal, but talks continue in a “constructive” climate, Economy Minister Mehmet Simsek said yesterday. “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 “a certain flexibility is required” on the part of the IMF, in an interview with NTV television. Simsek stressed that Turkey would not agree to a program that would “worsen the slowdown in growth... and create problems for the private sector.” Prime Minister Recep Tayyip Erdogan said a deal with the IMF could be reached only if “mutual interests” were satisfied. “If you are to tell us to stop investments and slow down growth... to cut down the budget... we cannot say ‘yes’ to such an agreement,” Erdogan told reporters in Ankara.

BRUSSELS (AP) – Croatia’s negotiations to join the European Union could be wrapped up next year, according to a draft EU report on the bloc’s expansion plans. The report, obtained yesterday by The Associated Press, is set to be adopted next week by the EU’s executive Commission. It says Zagreb has made “good overall progress” in three years of entry talks, and the European Commission “considers it possible to reach the final stage of the accession negotiations by the end of 2009.” It was the target date given to Croatia since it started membership talks in 2005.

SOFIA (AFP) – About 1,000 workers of Bulgaria’s biggest steelmill Kremikovtzi gathered for a third day yesterday to protest against the pending closure of the insolvent plant and to demand unpaid salaries. The steelworkers’ unions also said that Ukrainian businessman Rinat Ahmetov and his Smart Group were in talks to acquire the heavily indebted plant, the biggest steelmaker in the Balkans with a work force of more than 5,000. Kremikovtzi, which accounts for about 10 percent of Bulgaria’s total exports, is majority-owned by Indian company Global Steel Holding, which belongs to Pramod Mittal, the younger brother of ArcelorMittal’s steel tycoon Laksmi Mittal. Bulgaria’s government holds a 25 percent stake in the plant and is its largest creditor. (AFP)

The inflation rate was expected to rise to 11.1 percent at the end of 2008, the central bank governor said yesterday. It is an increase of 0.5 percent from the previous central bank estimate of 10.6 percent around mid-year. The slide of the Turkish lira against foreign currencies has increased pressure on inflation amid global economic turmoil, Central bank Governor Durmus Yilmaz said at a news conference. The lira was traded at 1.58 against the US dollar yesterday compared to last month’s 1.23. A weaker currency increases the price of imported goods and can contribute to inflation. Turkey had a target of a 4 percent inflation rate for 2008. (AP)

General Ratko Mladic and another war crimes fugitive are holding Serbia hostage by refusing to surrender to the UN tribunal, the country’s police chief said yesterday. Interior Minister Ivica Dacic said for the sake of the stability of the Balkan country, the wartime Bosnian Serb army commander, and Goran Hadzic, a wartime leader of rebel Croatian Serbs, should give themselves up. “They are holding the whole country hostage,” Dacic said, referring to the refusal by the European Union to allow Serbia pre-membership status before Mladic is arrested. Dacic said he does not know the whereabouts of the two, who are believed to be hiding in Serbia under the protection of supporters. Dacic said Serbia wants to avoid a repeat of the violent riots by nationalists that occurred when another top war crimes fugitive – former Bosnian Serb political leader Radovan Karadzic – was arrested and handed over to the Hague-based UN tribunal in July. “Voluntary surrender is the best way to finalize our cooperation with The Hague,” Dacic said. (AP)