PM Yıldırım announces large scale debt restructuring and reform package

Turkey will roll out a debt restructuring and social reforms package costing nearly $6 billion, Prime Minister Binali Yıldırım announced on Wednesday, mere weeks before snap elections slated for June 24.

Yıldırım, in an unusual speech after a cabinet meeting, said the measures would cost the government between 22-24 billion Turkish liras ($5.4-$5.9 billion). He said the measures being taken in the package would earn the government more than it spends.

He said the package would provide citizens with new opportunities to pay debts, fines and social security premiums to public institutions. Accordingly, 90 percent of the interest owed due to debt will be written off in single payments.

With the package, the 3-year income tax exemption for entrepreneurs between 18 to 29 years of age was also extended with the state taking over social security payments for a year.

An amnesty has been introduced for former university students who have been expelled or have discontinued their education so they can re-register and study, Yıldırım said, adding that some 500,000 youngsters could benefit from the amnesty, which does not cover students who were discharged due to terror charges.

A bonus payment of TL 1,000 for 12 million retirees will also be given on each Qurban Bayram (Feast of Sacrifice, also known as Eid al-Adha) and Ramadan Bayram (Eid al-Fitr), Yıldırım said.

He said that the monthly old-age pension given to persons 65 or older has been increased from TL 266 to TL 500, and some 600,000 currently benefit from these payments.

Yıldırım also announced a zoning reform that would affect some 13 million unregistered buildings throughout Turkey.

The per-kilogram price of tea, an important crop in northeastern Turkey, has been set at TL 2.45, Yıldırım added.

Earlier this month, President Erdoğan called for snap parliamentary and presidential elections for June 24. The elections will herald the launch of Turkey's new executive presidency, which was approved in a referendum last year.

On April 16, 2017, Turkey held a referendum on a constitutional reform in which the majority of voters pronounced themselves in favor of an 18-article bill switching a parliamentary system into a presidential one.

Under the constitutional reform, the number of lawmakers in the parliament will rise to 600 from 550, the presidential and the parliamentary elections will be held after every five years and the elected president will not be bound to cut ties with his or her party.