MercoPress. South Atlantic News Agency

Did you say Turkey?

In an ever increasingly inter twined financial world, particularly concerning emerging markets, the impact of the Turkish crisis that was forced to float its currency and receive support assurances from United States, reached Latinamerican markets, mainly Argentina.

The situations are not similar, but the ingredients and the distance led to the confusion. Turkey last December agreed to a package of structural reforms, including bringing down inflation, a balanced budget, privatization and upholding its currency; in exchange the International Monetary Fund, IMF, promised a 12 billion US dollars contingency credit.

However lack of political stability and an open squabble between the Turkish president and Prime Minister with an exchange of corruption concealment accusations, made the Turkish lira collapse almost 50%, billions of dollars fled the country, and the crisis only came under control after both political figures publicly "reconciled" and President Bush phoned Ankara to give its full support to the economic program.

Argentina also has an IMF sponsored program and a 40 billion "armored" contingency credit, agreed last December, plus a complicated political situation. But that is where coincidences end.

Argentina has had a stable currency and minimum inflation for almost a decade, it has privatized its main industries and is actually struggling to overcome a two years recession. The political scenario could hold surprises next October when the Congressional elections, but is spite of a slim majority the ruling coalition has managed to pass important bills including the budget and has a normal political working relation with the opposition. Besides no military sit in cabinet, and there are no ethnic, religious, social, neighboring conflicts comparable to those of Turkey.

Regarding corruption allegations, these are being aired not only in Argentina but also in the US Congress with the support of Argentine authorities. Anyhow like two/three years ago when foreign investors found a connection between Russia and Brazil, this time it was Turkey and Argentina.

The connection has had an impact on Argentine foreign bonds and the local stock exchange, but overall a quick reaction from the United States in support of the long standing cold war strategic Middle East ally calmed markets, although Turks from now on will have to live with a currency that lost 40% of its value against the US dollar. Investors, speculators, are relieved but in the world roulette of finan