TURKEY AND ITS COVID-19 ECONOMIC RECOVERY PACKAGES

European countries have implemented different spending strategies to deal with the consequences of the pandemic.

A study carried out by EuCham - European Chamber, together with the help and contribution of the governments of different European countries, including Turkey, shows a general comparison of the financial expenditure executed by each of the governments in search of the longed-for economic recovery during the COVID-19 crisis.

The differences in spending between 46 countries in the same continent, give a glimpse of the big disparities in the responses given. The significant variability shown by these figures raises questions. Given that a large part of these figures correspond to borrowed money that countries will have to repay, have the governments that have spent the most done the right thing?

In order to have a fair comparison between the different economies, the absolute amounts have also been recalculated in relation to their respective 2019 GDP (Gross Domestic Product).

Financial spending and government efforts differ heavily between countries, and this will be one of the factors influencing recovery and how the well-being of their economies will look in the future.

Lanxin Sun, a researcher for this comparative analysis, states: “The government of Turkey has made the highest relative expenditure in the region for the economic recovery. However, its expenditure is in the middle range when compared with other countries in Europe.”

Michele Orzan, the president of the European Chamber, points out that the Turkish government took the decision to make a feasible spending plan, on the basis of its economy: “Borrowing excessive money may lead countries to face a tougher situation than the one they are trying to address, due to the additional debt that they will have to cope with in the future”.

Orzan continues: “Turkey, in the context of the coronavirus outbreak, chose a balanced and rational approach to support its economy, without wasting precious financial resources”. Orzan suggests to always keep an eye on sustainability and concludes with the following reflection: “It is not who spends the most, but who spends the smartest". According to the president's statements, Ms Sun adds: “To ensure a faster economic recovery in the long-term, the government should work with sustainable supportive policies, with measures to preserve jobs especially in the areas more affected by the crisis, and with policies that support productivity and ameliorate business environment”.

Patrik Kovács, the EuCham board member who is the president of the SME & Entrepreneurship Committee of Business at OECD, acknowledges: “Undoubtedly, domestic macroeconomic volatility and evolving global uncertainties would obstacle the economic recovery to some extent, but effective policies supporting companies and the entire economy are the best response in post-covid."

In order to understand these numbers better, the amounts can also be compared from different angles, such as per capita expenditure. The governments of the countries will have to demonstrate the reasons for these large differences between one country and another, especially when the money spent brings, or does not bring, the desired benefit.

Full study of 46 European countries on eucham.info/recovery-packages