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TURKEY MAY PLAY BOND GAME AGAINST FRANCE
Hurriyet Daily News
Dec 27 2011
Turkey
The Turkish Central Bank could withdraw its nearly 23 billion euros
of reserves from France after the EU member's recent move to fine any
denial of an Armenian 'genocide' in 1915, economists tell the Daily
News. However, such a sharp move could risk Turkey's EU bid, they add.
Turkey's Central Bank might shift nearly 30 billion Turkish Liras of
investment in French bonds to other European powerhouses as part of
its recent row with the eurozone's second biggest economy, according
to several economists.
"The Central Bank could withdraw its reserves from France as part of
its economic sanctions in the future," Erol Katırcıoglu, professor of
the economics department of Istanbul Bilgi University, said yesterday.
"Looking at the steps taken by the Turkish government and the tone
of the political rhetoric, we can expect such a move," Katırcıoglu
told the Hurriyet Daily News in a phone interview yesterday. However,
such a move would strengthen opponents to Turkey's EU membership bid
and denounce Turkey as an "unreliable partner."
It is the right of Turkey to withdraw its reserves from France,
according to Kerem Alkin of Istanbul Commerce University. "This might
not hurt the French economy but will prove Turkey is serious about
sanctions," Alkin said.
Recent investment
Turkey's Central Bank has its second highest reserves in France with
28.8 billion liras, following the United States with 48.6 billion
liras.
In the midst of the eurozone crisis, Turkey invested around 17.7
billion liras in French government bonds last year, according to data
provided by the Central Bank.
By the end of last year, the bank's total investments in various banks
stood at 110.1 billion liras. The bank had 17.7 billion reserves in
Germany, 4.8 billion in Belgium, 4.5 billion in the Netherlands and
1.3 billion in the United Kingdom.
"The French economy might face serious difficulties if the Turkish
Central Bank withdraws reserves, as most of it is in French government
bonds," said Mehmet Usta, deputy chairman at Aktif Bank, who also
served as general manager at Banque de Bosphore in France between 1994
and 2007. "German bonds would be the primary choice of the Central
Bank instead of French bonds," he said.
Noting the rising need for liquidity in France due to the ongoing
European debt crisis, "Turkey's investment in the country would still
play an important role economically if France could not compensate
the amount from any other source immediately," he said.
Yet, responding to Daily News questions, Yucel Yazar, press counselor
of the Central Bank, declined to comment on the issue. "Our data is
open for everyone and clear enough, unfortunately we cannot comment
on this issue now," Yazar said.
Turkey might impose additional economic sanctions against France if
the country insists on accepting the bill punishing any denial of
Armenian "genocide" at the French Senate, said Ali Babacan, Turkey's
deputy prime minister, responding to Daily News questions Dec. 23. k
Hurriyet Daily News
Dec 27 2011
Turkey
The Turkish Central Bank could withdraw its nearly 23 billion euros
of reserves from France after the EU member's recent move to fine any
denial of an Armenian 'genocide' in 1915, economists tell the Daily
News. However, such a sharp move could risk Turkey's EU bid, they add.
Turkey's Central Bank might shift nearly 30 billion Turkish Liras of
investment in French bonds to other European powerhouses as part of
its recent row with the eurozone's second biggest economy, according
to several economists.
"The Central Bank could withdraw its reserves from France as part of
its economic sanctions in the future," Erol Katırcıoglu, professor of
the economics department of Istanbul Bilgi University, said yesterday.
"Looking at the steps taken by the Turkish government and the tone
of the political rhetoric, we can expect such a move," Katırcıoglu
told the Hurriyet Daily News in a phone interview yesterday. However,
such a move would strengthen opponents to Turkey's EU membership bid
and denounce Turkey as an "unreliable partner."
It is the right of Turkey to withdraw its reserves from France,
according to Kerem Alkin of Istanbul Commerce University. "This might
not hurt the French economy but will prove Turkey is serious about
sanctions," Alkin said.
Recent investment
Turkey's Central Bank has its second highest reserves in France with
28.8 billion liras, following the United States with 48.6 billion
liras.
In the midst of the eurozone crisis, Turkey invested around 17.7
billion liras in French government bonds last year, according to data
provided by the Central Bank.
By the end of last year, the bank's total investments in various banks
stood at 110.1 billion liras. The bank had 17.7 billion reserves in
Germany, 4.8 billion in Belgium, 4.5 billion in the Netherlands and
1.3 billion in the United Kingdom.
"The French economy might face serious difficulties if the Turkish
Central Bank withdraws reserves, as most of it is in French government
bonds," said Mehmet Usta, deputy chairman at Aktif Bank, who also
served as general manager at Banque de Bosphore in France between 1994
and 2007. "German bonds would be the primary choice of the Central
Bank instead of French bonds," he said.
Noting the rising need for liquidity in France due to the ongoing
European debt crisis, "Turkey's investment in the country would still
play an important role economically if France could not compensate
the amount from any other source immediately," he said.
Yet, responding to Daily News questions, Yucel Yazar, press counselor
of the Central Bank, declined to comment on the issue. "Our data is
open for everyone and clear enough, unfortunately we cannot comment
on this issue now," Yazar said.
Turkey might impose additional economic sanctions against France if
the country insists on accepting the bill punishing any denial of
Armenian "genocide" at the French Senate, said Ali Babacan, Turkey's
deputy prime minister, responding to Daily News questions Dec. 23. k