The World Bank board approved a $100 million technical assistance credit on 4 May for the privatisation programme. In a further boost to the programme, parliament voted at midnight on 5 May to give the government temporary powers to use decrees to accelerate privatisation during the next three months.
The World Bank loan is aimed at strengthening the ability of the treasury and the Public Participation Administration (KOI) to plan and implement denationalisation. It will also help the government create a safety net for affected state workers.
The World Bank funds are repayable over 17 years, with five years’ grace. The loan had been held back from submission to the board in late March because of concern about domestic financial turmoil and the absence of a stabilisation programme (MEED 8:4:94).
According to the new legislation, the government will be empowered to arrange unemployment pay for workers who lose their jobs because of privatisation. However, the number of job losses through privatisation and the amount of worker compensation have been a constant source of disagreement between Ciller and her True Path Party’s junior coalition partner, the Social Democratic Populist Party (DYP). Three opposition parties say they will seek to have this measure cancelled in the constitutional court, which has been used by the opposition to block similar measures in the past.