Municipalities saw $1 bln budget surplus in 2010

Municipalities saw $1 bln budget surplus in 2010

Finance Minister Mehmet Şimşek

May 26, 2011, Thursday/ 17:39:00/ TODAY'S ZAMAN

Turkey’s local administrations, for which massive budget deficits were a fact of life for so long, managed to yield a combined budget surplus of TL 1.35 billion ($843 million) in 2010, the Anatolia news agency reported on Thursday.

According to information the agency obtained from the Ministry of Finance, last year’s budget surplus came after deficits of TL 5.75 billion and TL 7.1 billion in 2009 and 2008, respectively. As well being a burden on the central government’s budget, local administration budget deficits were also a cause of dispute between Turkey and the International Monetary Fund (IMF), as the two were negotiating a new stand-by deal in 2007. One of the reasons the deal was not signed was the austerity measures the IMF demanded from the government to cut back those deficits.

Time, however, has proven that although another deal was not signed with the fund, the fiscal discipline to which Turkey adheres has been successful in reducing the local budget deficits as well as the national one, Finance Minister Mehmet Şimşek told Anatolia. “When I became finance minister in 2009, I had an urgent meeting with nearly 2,000 mayors in Antalya. Everyone at that meeting expected me to say I was going to give them more money. On the contrary, I raised the deficit issue, telling them that this could not go on any longer and that they should get back on track. As a result, we shifted away from a deficit of some TL 7.1 billion in 2008 and achieved a surplus of over TL 1 billion last year, whereas even our own forecast was a deficit of some TL 2.2 billion. This happened thanks to Turkey’s own formulas,” Şimşek said, adding that this budget performance would be “a plus in the eyes of international investors and organizations.”

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