Notes

Unlike Greece, which adopted the single currency and handed away its monetary power, Turkey still has its currency and monetary sovereignty. Even though depreciating its currency might not be ideal, the option still exists and might be an effective solution in solving problems like current account deficits.

Another important fact is that while the Turkish private sector is highly indebted the same does not hold true for the Turkish public sector. The table above presents the government debt of selected countries and the percentage of the GDP that it corresponds to. As the table shows, Turkey’s government debt only stands at 28.50 percent of the GDP. This means that the Turkish public sector can still borrow money from international markets to fix its economic problems and stimulate its private sector. In terms of government debt, the Turkish situation is much better than that of Greece, Italy, or the U.S., which have debt levels amounting to 181.9 percent, 131.5 percent, and 82.3 percent of their GDPs respectively.