- Jul 12, 2018
- 10,473
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OFFICE OF THE UNDER SECRETARY OF THE TREASURY FOR INTERNATIONAL AFFAIRS |
ENCRYPTED MESSAGE |
TO: Azmi Ekinci, Minister of Finance of The Republic of Türkiye ( Jay )
CC: Hafize Gate Erkan, Governor of The Central Bank of The Republic of Türkiye
FROM: Bob Pinkman, Under Secretary of The Treasury For International Affairs of the United States of America
Minister Ekinci,
Best regards,
Bob Pinkman
Under Secretary of The Treasury For International Affairs
Minister Ekinci,
The Treasury Secretary and Secretary of State are both aware that we are engaged in this communication.
In October of 2006, representatives from the United States, Poland, and Sweden met in New York City for a closed-door meeting - this meeting taking place was not, and still is not, public knowledge. In the meeting, the United States departments of State and the Treasury composed a presentation to Swedish and Polish representatives which outlined the concerning state of the Turkish economy. I was one of the two primary American representatives at the meeting.
In truth, your economic situation was dire. We were all deeply concerned that the Turkish state would be crippled beyond the point of recovery. However, through what I understand to be strict austerity measures, your government has managed to climb out from having over $100-billion in debt to $66.5-billion in debt. While Türkiye still has a very high debt to GDP ratio, I can tell you directly that this is shows Treasury and the Federal Reserve System that your government is willing to make tough decisions to turn things around. As I am sure you know, most countries in history have not been able to do what you are doing, which is remarkable. I can only imagine that one day someone is going to write a great book about those of you who have managed to turn the ship from hitting the iceberg.
With that being said, I understand that while the right course is being taken, this is still exceptionally straining on the Turkish people, economy, and government, and that continued pains can put a government back on an ill-fated trajectory. At the meeting in New York that I mentioned previously, a loan of $30-billion to Turkey was discussed. This would be a true loan split between the United States (likely via the Federal Reserve System), Poland, and Sweden, with each contributing $10-billion. The United States is still committed to going through with this and I believe that Poland and Sweden will as well, but I know that they need certain assurances.
First, we will need to know how much can be paid back to each country per (tax period). Is there a solid number which you can give to me that I can present to them?
Secondly, the Polish and Swedish representatives mentioned the possibility of collateral in the event that Turkey fails to make good on payments. Is there any kind of significant collateral that your government can offer?
I know that the White House, Treasury, and the Federal Reserve have had many meetings about how this would exactly work from our side. I am confident that we will be able to pull this off. If Poland and Sweden are willing to move forward with a $10-billion commitment, there is a possibility that the United States may be able to increase its loan offer. However, I cannot make any guarantees on that at the moment.
If your government and central bank want to move forward with this option, I ask that you get back to me at your earliest convenience. In the meantime, Treasury will begin drafting a binding financial agreement for the four of us.
In October of 2006, representatives from the United States, Poland, and Sweden met in New York City for a closed-door meeting - this meeting taking place was not, and still is not, public knowledge. In the meeting, the United States departments of State and the Treasury composed a presentation to Swedish and Polish representatives which outlined the concerning state of the Turkish economy. I was one of the two primary American representatives at the meeting.
In truth, your economic situation was dire. We were all deeply concerned that the Turkish state would be crippled beyond the point of recovery. However, through what I understand to be strict austerity measures, your government has managed to climb out from having over $100-billion in debt to $66.5-billion in debt. While Türkiye still has a very high debt to GDP ratio, I can tell you directly that this is shows Treasury and the Federal Reserve System that your government is willing to make tough decisions to turn things around. As I am sure you know, most countries in history have not been able to do what you are doing, which is remarkable. I can only imagine that one day someone is going to write a great book about those of you who have managed to turn the ship from hitting the iceberg.
With that being said, I understand that while the right course is being taken, this is still exceptionally straining on the Turkish people, economy, and government, and that continued pains can put a government back on an ill-fated trajectory. At the meeting in New York that I mentioned previously, a loan of $30-billion to Turkey was discussed. This would be a true loan split between the United States (likely via the Federal Reserve System), Poland, and Sweden, with each contributing $10-billion. The United States is still committed to going through with this and I believe that Poland and Sweden will as well, but I know that they need certain assurances.
First, we will need to know how much can be paid back to each country per (tax period). Is there a solid number which you can give to me that I can present to them?
Secondly, the Polish and Swedish representatives mentioned the possibility of collateral in the event that Turkey fails to make good on payments. Is there any kind of significant collateral that your government can offer?
I know that the White House, Treasury, and the Federal Reserve have had many meetings about how this would exactly work from our side. I am confident that we will be able to pull this off. If Poland and Sweden are willing to move forward with a $10-billion commitment, there is a possibility that the United States may be able to increase its loan offer. However, I cannot make any guarantees on that at the moment.
If your government and central bank want to move forward with this option, I ask that you get back to me at your earliest convenience. In the meantime, Treasury will begin drafting a binding financial agreement for the four of us.
Best regards,
Bob Pinkman
Under Secretary of The Treasury For International Affairs
