BERLIN (Reuters) - Turkey did not seek economic aid from Germany during talks in Berlin on Friday and Turkish President Tayyip Erdogan will not ask for support when he meets Chancellor Angela Merkel next week either, German Finance Minister Olaf Scholz said.
“Turkey has not sought economic aid, neither during our talks today nor will it do so in the talks that the president and the chancellor will hold,” Scholz said after meeting Turkish Finance Minister Berat Albayrak, who is Erdogan’s son-in-law.
German Economy Minister Peter Altmaier noted that Turkey had enjoyed in strong growth rates in recent years, adding: “that makes us all optimistic that Turkey will be in a position to overcome the problems and challenges.”
Turkey sharply cut its growth forecasts for this year and next on Thursday, a reduction that failed to mollify investors who wanted a more sober assessment of the fragile economy and a sweeping plan to help banks.
The lira currency has plunged by 40 percent this year on concerns about Erdogan’s influence over monetary policy and a rift with the United States. The sell-off has shaken global markets and raised the prospect of a banking crisis at home.
Turkey’s banks face a potential deluge of bad debt as the lira sell-off has driven up the cost for companies to service their foreign currency loans. For years Turkish firms borrowed in dollars and euros, drawn by lower interest rates. JPMorgan estimates that the private sector has around $146 billion in external debt maturing in the year to July 2019.
Writing by Paul Carrel; Editing by Michelle Martin and Matthew Mpoke Bigg