Turkey nearer to IMF loan

Prime Minister Ecevit suggested the new Telekom board could improve relations with the IMF

By the BBC's Eurasia analyst, Adrian Foreman

Leaders of the coalition government in Turkey have agreed on further moves to try to unblock a $1.6bn emergency loan being withheld by the International Monetary Fund (IMF).

A meeting of the three coalition leaders agreed to consider changes to the management of the state telecommunications monopoly, Turk Telekom, for the second time in two months.

The IMF has insisted that more experienced executives should join the board in preparation for Turk Telekom to be privatised, before further loans are paid.

The IMF has taken a tough stand over Turkey

Some Turkish politicians have accused the IMF of interfering in the country's internal affairs.

In a statement after a meeting of the three coalition party leaders, the prime minister, Bulent Ecevit, said the recently appointed Telekom board, made up mostly of bureaucrats and political appointees, would be summoned to meet, to consider further membership changes.

Board games

A new board, said Mr Ecevit, would stop what he called an artificial problem overshadowing Turkey's relationship with the IMF.

There was no indication in the statement what changes might be made.

Instead, the statement insisted that IMF criteria had already been met, and it questioned why the issue was so important.

That sounds like code for accusing the IMF of heavy-handed interference.

But the government desperately needs the money to pull itself out of financial crisis, and the IMF can dictate terms.

The IMF delayed its agreed $1.6bn payment earlier this month, even though the Telekom board had just been reconstituted to try to meet IMF criteria.

The government thought it had an acceptable compromise, after Turkish nationalists expressed fears that such an important part of the state and security infrastructure might be rushed into private ownership.

The IMF's uncompromising stand comes at a difficult time for Mr Ecevit, who pushed through equally controversial privatisation legislation of the state tobacco monopoly, Tekel, just as the IMF wanted, only to have the move vetoed by President Ahmet Necdet Sezer.