ECONOMY

Turkish pension reform in April?

ANKARA (Reuters) – Turkey’s government hopes Parliament will approve in April key reforms to shake up its bloated social security system as part of pledges made to the International Monetary Fund, the country’s labor minister said. The reforms, which include raising the retirement age and overhauling pensions, are a condition of Turkey’s three-year, $10 billion loan package with the IMF. Initially set to be approved by February, they are seen as crucial to Turkey’s budgetary health. «It depends on Parliament’s agenda when these bills are discussed. But we believe that the two bills will probably pass the general assembly in April,» Labor Minister Murat Basesgioglu told reporters late on Wednesday. Basesgioglu was speaking after a parliamentary commission had finished debating a draft law on pensions and health, a necessary step before Parliament can take up the issue. The Commission postponed discussions on eight articles of the draft law, but Labor Ministry officials said those talks would resume yesterday. The IMF’s review of Turkey’s reforms is on hold until the government can show it has made significant progress on pushing them through Parliament. Delays caused by fierce political opposition have unnerved Turkish markets. Some investors were rattled by comments earlier on Wednesday from Finance Minister Kemal Unakitan that there was no need to rush into carrying out structural reforms such as social security. «There is no need to rush on this issue. These reforms will be done as long as the government believes (in their necessity),» he said. Delays are possible because of Parliament’s busy schedule, Unakitan said, but he added that the government would not abandon structural reforms because they were necessary for Turkey to catch up with more advanced economies. Turkish assets have fallen in recent days on continued uncertainty over the next central bank chairman, a US Federal Reserve interest rate hike and the government’s readiness to consider further tax cuts despite the IMF’s concern.