Identifier
Created
Classification
Origin
08ANKARA1228
2008-07-09 03:40:00
CONFIDENTIAL
Embassy Ankara
how-toVZCZCXYZ0001 PP RUEHWEB DE RUEHAK #1228 1910340 ZNY CCCCC ZZH P 090340Z JUL 08 FM AMEMBASSY ANKARA TO RUEHC/SECSTATE WASHDC PRIORITY 6783 INFO RUEAIIA/CIA WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RHEHAAA/NSC WASHDC PRIORITY
C O N F I D E N T I A L ANKARA 001228
SIPDIS
EEB FOR A/S SULLIVAN
EUR FOR DAS BRYZA
TREASURY FOR JROSE
E.O. 12958: DECL: 07/07/2013
TAGS: ECON EFIN TU
SUBJECT: WHO'S ON FIRST? TURKEY AND THE IMF
REF: A. ANKARA 1221
B. ANKARA 1026
C. ANKARA 1014
D. ANKARA 524
Classified By: Acting Econ Counselor Rebecca Neff for reasons 1.4 b and
d.
C O N F I D E N T I A L ANKARA 001228
SIPDIS
EEB FOR A/S SULLIVAN
EUR FOR DAS BRYZA
TREASURY FOR JROSE
E.O. 12958: DECL: 07/07/2013
TAGS: ECON EFIN TU
SUBJECT: WHO'S ON FIRST? TURKEY AND THE IMF
REF: A. ANKARA 1221
B. ANKARA 1026
C. ANKARA 1014
D. ANKARA 524
Classified By: Acting Econ Counselor Rebecca Neff for reasons 1.4 b and
d.
1. (C) Summary. On May 10, Turkey's stand-by arrangement
with the International Monetary Fund (IMF) ended. Reftels
detail the importance investors place on Turkey continuing to
have a strong relationship with the IMF, including the
ability to borrow if the economy goes south. In separate
meetings, high-level GOT and IMF officials told us
negotiations on a new precautionary stand-by arrangement may
begin soon. Concluding a deal would be an important step for
investor confidence and calming market uncertainty.
2. (C) The IMF and Turkey appear to be inching toward a new
deal despite bureaucratic formalities. The IMF told us they
are ready to negotiate a deal as soon as the GOT makes a
formal request; meanwhile, the GOT said they are ready to
make a deal when the IMF is ready. Ankara 524 details a
statement from Treasury Minister Mehmet Simsek that Turkey
did not need a new stand-by arrangement with the IMF. In the
five months since then, global conditions and market reaction
have called for a turnaround in that policy. Two weeks ago,
Simsek announced he was "willing to entertain" the idea of a
precautionary stand-by and would request negotiations with
the IMF. Ten days ago we met with IMF Resident
Representative Hossein Samiei, who said he was willing to
talk with the GOT about a precautionary stand-by as soon as a
request was made. One week ago, Treasury Director General of
Foreign Affairs Memduh Akcay told us the IMF was holding off
on talks and waiting to learn the outcome of the pending
Justice and Development Party (AKP) closure case. Three days
ago, the IMF confirmed that the GOT has still not made a
formal request for talks.
3. (C) Comment: While the debate continues over who asked
whom to dance (or not),the talks will likely begin soon and
the end result will most likely be a precautionary stand-by
arrangement. The GOT will continue to repay its $10 billion
obligation to the IMF as agreed and be in a position to
borrow more, if needed, in the future. All the investors and
rating agencies we talk to would like to see another deal
signed and sealed. Action on an agreement will help calm
uncertainty and rebuild some investor confidence in the GOT's
commitment to economic responsibility. End comment.
Visit Ankara's Classified Web Site at
http://www.intelink.sgov.gov/wiki/Portal:Turk ey
WILSON
SIPDIS
EEB FOR A/S SULLIVAN
EUR FOR DAS BRYZA
TREASURY FOR JROSE
E.O. 12958: DECL: 07/07/2013
TAGS: ECON EFIN TU
SUBJECT: WHO'S ON FIRST? TURKEY AND THE IMF
REF: A. ANKARA 1221
B. ANKARA 1026
C. ANKARA 1014
D. ANKARA 524
Classified By: Acting Econ Counselor Rebecca Neff for reasons 1.4 b and
d.
1. (C) Summary. On May 10, Turkey's stand-by arrangement
with the International Monetary Fund (IMF) ended. Reftels
detail the importance investors place on Turkey continuing to
have a strong relationship with the IMF, including the
ability to borrow if the economy goes south. In separate
meetings, high-level GOT and IMF officials told us
negotiations on a new precautionary stand-by arrangement may
begin soon. Concluding a deal would be an important step for
investor confidence and calming market uncertainty.
2. (C) The IMF and Turkey appear to be inching toward a new
deal despite bureaucratic formalities. The IMF told us they
are ready to negotiate a deal as soon as the GOT makes a
formal request; meanwhile, the GOT said they are ready to
make a deal when the IMF is ready. Ankara 524 details a
statement from Treasury Minister Mehmet Simsek that Turkey
did not need a new stand-by arrangement with the IMF. In the
five months since then, global conditions and market reaction
have called for a turnaround in that policy. Two weeks ago,
Simsek announced he was "willing to entertain" the idea of a
precautionary stand-by and would request negotiations with
the IMF. Ten days ago we met with IMF Resident
Representative Hossein Samiei, who said he was willing to
talk with the GOT about a precautionary stand-by as soon as a
request was made. One week ago, Treasury Director General of
Foreign Affairs Memduh Akcay told us the IMF was holding off
on talks and waiting to learn the outcome of the pending
Justice and Development Party (AKP) closure case. Three days
ago, the IMF confirmed that the GOT has still not made a
formal request for talks.
3. (C) Comment: While the debate continues over who asked
whom to dance (or not),the talks will likely begin soon and
the end result will most likely be a precautionary stand-by
arrangement. The GOT will continue to repay its $10 billion
obligation to the IMF as agreed and be in a position to
borrow more, if needed, in the future. All the investors and
rating agencies we talk to would like to see another deal
signed and sealed. Action on an agreement will help calm
uncertainty and rebuild some investor confidence in the GOT's
commitment to economic responsibility. End comment.
Visit Ankara's Classified Web Site at
http://www.intelink.sgov.gov/wiki/Portal:Turk ey
WILSON