Mehmet Simsek startled by the budget disaster—Journalist

Mehmet Şimşek, who has served in senior positions such as the Minister of Finance and Deputy Prime Minister in AKP governments for many years, recently returned to the cabinet,  from which he was excluded in July 2018 for advocating interest rate hikes. After taking up the post a second time, at the ‘persistence’ of President Recep Tayyip Erdogan, with whom he had a discussion at that time. Credible veteran Ankara affairs correspondent Erdal Saglam  claims Simsek said that he was very surprised that no flexibility  existed at all in budget expenditures.

10News  news site columnist and Ankara reporter Erdal Saglam shared his backstage information in his article titled “High budget deficits became Simsek’s nightmare”.


Reminding that Hafize Gaye Erkan, who was appointed with Simsek’s suggestion to the Presidency of the Central Bank of the Republic of Turkey (CBRT), is almost certain to launch a high rate increase, Saglam said, “However, no matter how high the increase is, if Şimşek cannot sort out the budget deficits, it is also obvious that it will be difficult to ensure the flow of foreign funds, which are connected budget austerity”.

In his article, Saglam stated:



“Mehmet Şimşek told his acquaintances that he was looking at the budget savings possibilities and realized that he  could only work on 9 percent of the budget expenditures in order to save money. It is stated that Şimşek is very surprised that there is no flexibility in budget expenditures and the remaining expenditures have become frozen.

The budget has last seen such a dire state of “frozen expenditures” in 2000 which forced the then-premier Ecevit to call in the IMF.  Election spending  with the addition of factors such as earthquake recovery, early retirement and the interest cost of FX protected deposit scheme  will add  significantly to the recent increases in borrowing, adding more costs to be covered down the line.

Şimşek reportedly says they can only work on 9 percent of the budget expenditures to find savings, but it is unlikely that the savings to be made will exceed 2-3 percent of the total budget. While it was learned that this situation was discussed at the Economic Coordination Board held last week, it is stated that studies have started on what can be done within the scope of preparations for the medium-term program.

Source:  Mehmet Şimşek’in yakınlarına söyledikleri ortaya çıktı: ‘Yüksek Bütçe açıkları kâbusu oldu’


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.