Will Germany provide emergency financial aid to Turkey?
The German government is considering providing emergency financial assistance to Turkey as concerns grow in Berlin that a full-blown economic crisis could destabilize the region, the Wall Street Journal writes.
According to German and European officials, while the talks are at an early stage and may not result in any aid, the possibilities being discussed range from a coordinated European bailout similar to the kind deployed during the eurozone debt crisis to project-specific loans by state-controlled development banks and bilateral aid.
"We would do a lot to try to stabilize Turkey. We don’t have much choice," the newspaper cited a senior German official as saying.
Germany fears a meltdown of the Turkish economy could spill over into Europe, cause further unrest in the Middle East and trigger a new wave of immigration toward the north.
The collapse of the lira - it has lost 40% of its value against the dollar this year - has pushed up inflation and put pressure on companies and individuals who have loans denominated in foreign currency. The threat of mass defaults, in turn, has been weighing on Turkish banks.