“BUDGETARY DISCIPLINE OF THE TURKISH REPUBLIC OF NORTHERN CYPRUS (TRNC) IN THE LIGHT OF EMU MAASTRICHT CRITERIA

Öz

As it is widely known, economic measures mainly, aim to achieve sustainability requiring macro-economic stability. Moreover, budgetary discipline should exist to have macro-stability. Eventually, it is acknowledged that budgetary discipline is an indispensable element of sustainability. In this regard, European Union (EU) requires countries to budgetary discipline as a prerequisite of functioning within Eurozone. Maastricht Criteria must be fulfilled in order to qualify for Eurozone membership consists of elements of budgetary discipline. These are; Budget Deficit: Budget Deficit must not exceed 3% of GDP; and National Debt: Government Debt must not exceed 60% of GDP. Turkish Cypriot authorities are currently implementing “Program for the Future Adoption of the Acquis” (PFAA) in order to fulfill the relevant economic and political criteria as the preconditions for EU accession. Despite the implementation of this Program, the potential of TRNC to fulfill the convergence criteria in order to qualify for Eurozone membership is yet not satisfactory. When the convergence criteria of fiscal discipline is considered, it is clear that the position of TRNC is worst than Greece. The ratio of Budget Deficit of TRNC to GDP is 16 % in 2009 while this ratio of Greece is 12.7 % for the same year. Turkey’s donors finance this deficit even though specified percentage is officially recorded as credit. Thus, there is no payment of debt stock declared by TC authorities and demanded by authorities of Turkey. This shows that TRNC has potential debt burden seriously jeopardizing budgetary discipline. In addition to absolute figures of TRNC budget, there are other crucial factors negatively influencing budgetary discipline. These are primarily tax, budget revenue and expenditures elasticities in addition to issues of public expenditure management system consisting of institutional framework, fiscal framework, budget preparation process, budget execution and monitoring, accounting and reporting, financial control, procurement systems, allocative efficiency, technical efficiency and transparency and accountability.

Anahtar Kelimeler

• Budgetary Discipline, TRNC, EMU, Maastricht criteria

Kaynakça

1. Allen, Richard and Daniel Tommasi (2001), Managing Public Expenditure a
2. Reference Book for Transition Countries, SIGMA, OECD. Batırel, Ö. F. And Ayşe Güner (1994), Lecture Notes on Public Finance,
3. Marmara Üniversitesi Nihad Sayâr Eğitim Vakfı Yayın No: 481/714, İstanbul. Debrun, Xavier and Johan Mathisen (2010), Europe Moving to Restore Growth and Sustainability, IMFSurvey Magazine: Countries & Regions, http://www.imf.org/external/pubs/ft/survey/so/2010/car051010a.htm, January 23,
4. DPT (2006), Kamu Harcama Ve Kontrol Sistemlerinin İyileştirilmesi,Kamu
5. İhaleleri, Devlet Planlama Teşkilatı (DPT) Özel İhtisas Komisyonu Raporu, ÖİK No:7, Ankara. Easterly, W., C.A. Rodrígez and K. Schmidt-Hebbel (1994), Public Sector
6. Deficits and Macroeconomics Performance, The World Bank, Washington Engin, E and Ebru Yeşiltepe (2009), “Global Ekonomik Krizin Gölgesinde
7. Turkiye’nin Maastricht Kriterlerine Uyumu”, Ekonomi Bilimleri Dergisi , 1(2). Europa Glossary (2011), Convergence criteria: The glossary is being updated given the recent signing of the Treaty of Lisbon, http://europa.eu/scadplus/glossary/convergence_criteria_en.htm, January 23,
8. Göktaş, Ö. (2008), “Türkiye Ekonomisinde Bütçe Açığının Sürdürülebilirliğin

9. Analizi”, Ekonometrik ve İstatistik, No 8: 45-64. Günay, A. (2007), Mali Disiplinin Sağlanmasında Anayasal Denk Bütçe
10. Yaklaşımı ve Türkiye’de Uygulanabilirliği, T.C. Maliye Bakanlığı Strateji Geliştirme Başkanlığı, Ankara. International Monetary Fund (IMF) and the World Bank (2006) Fiscal Policy for
11. Growth and Development: An Interim Report. Washington D.C. Indraratna, Yuthika (1991), The Measurement of Tax Elasticity in Sri Lanka : A
12. Time Series Approach, World Bank. Kocenda, Evzen, Ali Kutan and Taner M. Yiğit (2008), Fiscal convergence and discipline in monetary unions: Evidence from the European Union, IPC Working Paper Series No. 61.
13. Shah, Anwar and Jürgen Von Hagen (2007), Budgeting and Budgetary
14. Institutions, Herndon, VA, USA:World Bank. Sharma, S. (2009), Implementation of Fiscal Policy to Address the Current
15. Financial Crisis: Experiences from the Selected Asian Countries, United Nations Economic And Social Commission For Asia And The Pacific. Spilimbergo, Antonio, Steve Symansky, Olivier Blanchard, and Carlo Cottarelli (2008), Fiscal Policy for the Crisis, International Monetary Fund, IMF Staff
16. Position Note, Washington D.C. SPO (2010), Economic and Social Indicators, State Planning Organization,
17. Follow Up And Coordination Department, Nicosia, http://www.devplan.org/, January 24, 2011.
18. The World Bank (1998), Public Expenditure Management Handbook,
19. Washington, D.C., The International Bank for Reconstruction and Development/ The World Bank, p.17-52. Todorović, Jadranka Djurović and Marina Djordjević (2009), “The Importance of
20. Public Expenditure Management in Modern Budget Systems”, Economics and Organization, 6(3): 281 – 294.