Turkish law to curb borrowing

ISTANBUL (AP) – Turkey’s Parliament on Thursday passed a law that will curb public sector borrowing, meeting a key International Monetary Fund condition for the release of the next installment of a $16-billion loan package. The new law, which was passed late on Thursday after a two-day debate, will place caps on the amount that public-sector institutions can borrow, based on their share of the budget and their projected revenues. It is designed to help Turkey’s IMF-backed efforts to put its public finances in order, after last year’s economic crisis threatened Turkey’s ability to maintain repayments on its massive debts. The crisis, which has caused over a million job losses and a 50-percent currency devaluation, caused Turkey’s economy to contract 8.5 percent last year. The new law also gives the Treasury tighter control over loans taken out by other public-sector institutions. In the past decade, several state institutions – such as Turkey’s larger municipal authorities and the state-run energy companies – have borrowed heavily abroad and then been unable to meet the payments, leaving the Treasury to foot the bill. Yesterday’s raid was the closest Israeli forces have come to the Palestinian leader in 18 months of fighting, engaging in gunfights with his security forces, while shelling punched holes in his walled compound in the West Bank town of Ramallah. At least 13 of Arafat’s security guards were injured in the attack, while Israeli soldiers demanded over loudspeakers that all armed men in the compound surrender.

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