ECONOMY

Sezer stalls finance reform

ANKARA (Reuters) – Turkey’s government will bypass a presidential veto by presenting an IMF-linked public finance law to Parliament for it to pass before the end of this year, a government official told Reuters yesterday. President Ahmet Necdet Sezer, who earlier this year vetoed the law which overhauls the country’s budget system, does not have the right to reject it for a second time after the Parliament passes the law without changes. The veto of the public fiscal management law means that Turkey, which won EU accession talks status in October, will not be able to implement the budget for 2006-2008 and introduce a new system for taxation of financial investment tools as planned at the beginning of next year. «The government will not allow foreign investors or capital markets to be hurt by this (veto),» another senior government official told Reuters. Sezer, who regularly clashes with the government, objected to the changes in the recruitment processes for the financial officials on local municipalities, saying qualifications of new employees should be determined not by the law but by the Cabinet decrees. Under this reform, Turkey will overhaul its budget and start to implement budgets for three years rather than one year to align its fiscal standards to the EU norms. The budget reform marks another step for Turkey entrenching the financial stability which has brought chronic inflation down to single digits amid strong economic growth since a 2001 financial crisis – a recovery crowned by the start of EU entry talks on Oct. 3. Sezer, a staunch secularist, has repeatedly vetoed laws of the reform-minded government of Prime Minister Recep Tayyip Erdogan. Political analysts say he has used his veto right due to disagreements with the ruling Justice and Development Party, which has roots in political Islam.