Claims against cash exchanging hands are now surfacing as the March elections in Turkey nears.
The claims are made against President Recep Tayyip Erdoğan, who is accused of loosening the purse strings. Mr Erdogan himself announced a series of relief package as he was speaking to his party members in the parliament on Tuesday.
He announced that credit card debtors will be allowed to use restructuring credits driven by the state-run bank, Ziraat Bank, and electric usage will be free of charge for social aid beneficiaries.
The governing ruling Justice and Development Party (AKP) is pushing the limit of the country’s budget as an election investment. Turkey is already facing economic hardships with municipal elections around the corner. The country’s citizenry struggles to even meet basic needs to daily survival.
According to the latest figures, around 2.5 million people have defaulted on their credit card debts to banks.
There are also ninety thousand houses at the European side of İstanbul that are in dire straits while they have to pay their electricity bill along with the people who can’t meet their basic necessities, critical Cumhuriyet daily reported.
Critics are saying the governing party has ignored the poor, but now that the elections are around the corner, and there is a sudden remembrance of the poor.
Election investment made by the President
In defiance of budget discipline, Erdoğan pushed back during his ruling AKP caucus. Though Erdoğan pointed out they will continue without making concessions from the budget discipline, austerity, constructional reforms, the uncertainty of the financial source for spending and subventions have a considerable amount of risks.
Election promises which were made public by Erdoğan are as follows;
- Up to 150 (kWh) electric consumer of those who get regular public aid to be paid (80 TL) by the government.
- This is as more than 2.5 million houses can’t afford to pay their electricity bill across the country. According to the Chamber of Engineers (EMO) minimum, electric consumption of a family of 4 is around 230 kWh amounting equal to 140 TL.
Meanwhile, those having difficulty to pay their credit card debts are asked to buy up with ‘Combining Personal Finance Credit’, to be granted by Ziraat Bank. This will be done by putting together all credit card debts that debtors should pay to all banks.
The monthly interest rate was to be 1.10 up to 24 months credit as the interest rate for the 60 months credit to be 1.20. As of 2018, 25.6 million Turkish individuals have a personal credit card.
Turks stuck in debt spiral
As in the past years, around 2, 485 000 and 148 individuals have already failed to pay their debts. As of December 31, debt related to personal credit cards rose to 102.4 billion TL ($19.1 billion). The debt is expected to continue rising unabated.
Around 22 billion TL was granted to artisans, having selling, collection and finance problems, over another state-run Halkbank. Around 350 thousand artisans are expected to take advantage of artisan credit.
Insurance premium rate, which stands at three points at the moment at a business employing 500 or more was to be raised to five points, while other business employing under 500 personal the premium rate to be at five, as has been the case.
Meanwhile, the redemption rate of farmers indebted to banks was extended to a year, with an interest rate of 11 percent the particular year. A total ‘deficiency payment’ for the agricultural products to be over 2 billion TL. (1$ equal 5,33TL)
Look at high taxes and reduce them
Touching on the payment arrangement of 150 (kWh) electricity consumed by those who get regular public aid, Electrical Engineers Chamber(EMO) İstanbul Office chairman Erol Celepsoy said the minimum electric consumption of a family of four is around 230 kWh, amounting equal to 140 TL. As much as government assistance is welcomed, most are pushing back that this should not be used as an election ploy.
Celepsoy also requested the lifting of Turkish national broadcaster (TRT) loan, energy fund and municipal loan in the electricity bill. He also suggested a reduced KDV rate (Valued Added Tax) from eighteen to eight.