Mary Stokes, one of my few loyal readers:), has left a comment on my post "Weekly Hurriyet Column: Happy Ramadan/Eid" about the fiscal rule, which is what tomorrow's column is about:
"Regarding a fiscal rule in Turkey, I think it's interesting to look at what is happening in Poland right now where legal safeguards kick in when public debt-to-GDP breaches a certain level.For me, Poland's example highlights that having a fiscal rule is not a panacea for solving the problem of fiscal deterioration. While there are many positives to the legal safeguards in Poland (eg increased investor confidence, less maneuver room for a spend-happy government), it appears to me that having the fiscal rule has also led to a number of smoke and mirrors tricks to get public finances into line.Plus, Poland will need to tighten fiscally at a time when unemployment is still rising.So I personally will reserve judgment on the fiscal rule until we learn more....the devil's in the details, as they say. I look forward to reading your coming article!"
I was going to wait until I got home to reply, but I liked what she was saying so much that I had to respond right away, on my Bberry- so apologies for the bad formatting.
Anyway, as you'll see tomorrow, I am more or less in line with Mary's line of thought. Other examples that could be relevant for Turkey are Hungary, Sweden, Chile (obviously, we do not have the equivalent of their copper, but theirs is a fine example of a fine-tailored rule for the specifics of a country rather than copycating) or the US, the latter for the CBO- I doubt the CBO would work in Turkey in copied in its entirety, but some parts of it are admirable.
Another point Mary raises is that we have to simply wait and see. I handed in my column an hour before she wrote, and now I think about it, I've been a bit too judgemental and unfair to the government. After all, this is something they are still working on, as Econ. Minister Babacan noted. We'll just have to wait for the devil:)
Anyway, thanks a lot Mary; great comments and highly-appreciated...
Sent by BlackBerry Internet Service from Turkcell
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