ECONOMY

In Brief

National Bank relies on Turkey in crisis Greece’s biggest bank is relying on Turkey to pull it through an economic crisis at home. National Bank of Greece SA plans to open 75 branches from Ankara to Izmir this year to benefit from Turkish economic growth that is forecast to reach 5.2 percent. National Bank earned more last year at its Istanbul-based Finansbank AS unit than it did in Greece. The ascent of Turkey, a nation of 72 million straddling Europe and Asia, stands in counterpoint to the decline of Greece, its centuries-old adversary. The Turkish economy is forecast to expand faster this year than any in the European Union, the 27-nation bloc that has so far declined to admit Turkey, in part because of tensions with Greece over Cyprus and territorial rights in the Aegean Sea. «There is an ironic element to this, because Turkey used to be seen as a very problematic banking system,» said Ioannis N. Grigoriadis, assistant professor at Bilkent University’s Department of Political Science in Ankara. «With the benefit of hindsight, Finansbank has been a very successful investment. It appears it’s the most solid leg of National Bank right now.» National Bank has spent more than $5 billion since 2006 to acquire Finansbank. The Athens-based company earned 425 million euros ($540 million) in Turkey last year, more than the 398 million euros it made in Greece. The gap may widen as the Greek economy shrinks under austerity measures aimed at reducing the budget deficit, which reached 13.6 percent of gross domestic product in 2009. (Bloomberg) ECB wasn’t pressured into move, says Trichet European Central Bank President Jean-Claude Trichet said the bank wasn’t pressured by politicians into buying government bonds to counter a sovereign debt crisis in the euro region. «This decision is a decision of the Governing Council and not a result of any kind of pressure of any sort,» Trichet said at a press conference yesterday in Basel, Switzerland. «We are fiercely and totally independent.» The ECB announced overnight it will buy government and private bonds as part of an historic bid to rescue the euro after Greece’s fiscal crisis spread to other indebted nations in the currency bloc. Last week, Trichet resisted calls for bond purchases and put the onus on governments to consolidate budgets, while council member Axel Weber indicated buying assets would be a step too far. The ECB’s reluctance to act exacerbated a global market rout. Trichet confirmed the euro region’s national central banks started buying bonds yesterday. He declined to give any details on the scope of the program. (Bloomberg) Spanish cuts The Spanish Finance Ministry has agreed to make deeper spending cuts to reduce its large deficit and calm market worries that it could be next in line to suffer a debt crisis like Greece’s. A ministry official says Finance Minister Elena Salgado announced the cuts at Sunday’s emergency EU meeting. Spain’s budget deficit equaled 11.2 percent of gross domestic product last year, and the government months ago announced an austerity plan to reduce it to 3 percent in 2013. (AP) Romanian recession Romania’s economy may contract by as much as 0.5 percent this year and the government will have to cut spending «drastically» to keep the deficit down, the International Monetary Fund said yesterday. At the end of a mission to assess the country’s economic performance, the IMF mission chief to Romania cut the forecast for the country’s economic growth this year to between zero and minus 0.5 percent. The IMF had previously predicted the economy would grow by 0.8 percent, after last year’s decline of 7.1 percent. However, IMF mission chief Jeffrey Franks predicted that the economy would recover to grow by as much as 3.6 percent in 2011. (AP) EU powers The European Union’s internal market commissioner yesterday called on the eurozone to «learn the lessons» of the recent economic crisis and give Brussels more say over fiscal policy. Challenging one of the most closely guarded powers held by EU member states, Michel Barnier said greater harmony in budget policies would be needed after Greek malfeasance plunged the euro into crisis. (AFP)