• Good day to you all, and a warm welcome to our foreign guests.
• I am honoured to be chairing this meeting, which will enable us to look in detail at the economic conditions of Turkey with regard to its gradual entrance into the European Union.
• From an economic standpoint, two serious financial crises in three months -- between November and February -- have had an effect similar to the earthquake which struck the country in 1999.
• A leading figure behind the Turkish government's economic plan for 2001/2002, of which the agreement with the International Monetary Fund is a part, is here with us today: Turkey's Minister for the Economy, Kemal Dervis. As a result of this agreement, the International Monetary Fund is already working with the country to resolve the problems arising from a devaluation of more than 30%, prompted by the brave but inevitable and necessary abandonment of a fixed exchange rate policy.
• An injection of liquidity by the Central Bank has pegged rising interest rates and given breathing room to commercial banks. In addition, the new economic plan sets the following short-term goals: disinflation, strengthening of fiscal policy and structural reforms to enable the country to implement economic recovery and move towards the goal of joining the EU. But above all, it requires the certainty of a definitive legal and regulatory framework.
• Renewed confidence in the Turkish market by foreign investors and companies, Italians in particular, appears to be just around the corner.
• Last year Italian firms did a lot of business on the Turkish market, taking advantage of the highly favourable world economic situation. Booming Italian exports were driven by GDP growth (+6%) and increased demand for consumer and investment products. In the first ten months of the year, that is, before the November crisis struck, the sale of Italian goods was up 67% on the same period in 1999.
• As you will be aware, Italy is Turkey's number two trading partner, just behind Germany.
• Despite the difficult economic situation, no Italian companies have decided to pull out of the country. This is a sign of great confidence in the institutions, and an acknowledgement of the attractive growth prospects in a number of sectors of the economy. Telecommunications is one of these sectors.
• The government in Ankara recently (13 May) made a signal to its partners in the West when it confirmed its desire to sell off up to 100% of Turk Telecom, whilst retaining a golden share.

Note: The privatization law in question, the result of a political compromise between privatization supporters and detractors, seems to include a provision whereby foreign companies may not hold more than 45% of Turk Telecom share capital, nor hold a majority of voting rights. It also appears that the privatization law contains a measure whereby if the government privatizes more than 50% of company capital, this voids the exclusive licence guarantee until 31 December 2003. Theoretically, the full share capital could be sold off, with the exception of a "special share" which, for security reasons, would remain in the hands of the Turkish Treasury Ministry. This golden share would entitle the Turkish ministry to a place on the Board of Directors of Turk Telecom. Five per cent of shares are set to be sold to small investors and employees of Turk Telecom and the Post Office.

• These, however, are not the ideal grounds for becoming part of Europe. This form of privatization would simply create a new monopoly, to all effects run by the government.

The requisites for joining the European Union include guaranteeing free market competition within member states. It is my belief that on this issue Turkey ought to review the guiding principles behind this privatization.

• Naturally, reassuring signals for further development of relations with Western investors must, within a reasonably short space of time, be backed up by an overall legislative and regulatory framework that is both definitive and certain.
• Here, the Turkish government has expressed its commitment to bring its legislation regarding interconnection licences and universal service into line with Europe. This move comes as part of the government's previously announced intention to bolster the role of the Telecommunications Regulatory Authority.
• These are pledges that immediately bring Turkey into line with the principal European countries.
• As you know, TIM has been operating in Turkey since 21 March, when, in partnership with IS-Bankasi, it launched Aria, Turkey's third mobile telephony company: a brand new company offering new value added services, new price plans and a brand new customer focus.
• In just over two months Aria has acquired more than 113,000 customers.
• TIM must be in a position to compete on equal terms with the other two Turkish carriers, which means the opportunity to obtain national roaming on their networks.
• Law no. 4502 of 27 Jan. 2000 requires mobile telephone companies to accede to 'reasonable, economically suitable and technically feasible' roaming requests. But as things stand, no agreement has been reached, nor has the Regulatory Authority issued any detailed rulings regarding national roaming.
• Facilitating this practice would be proof of the country's real commitment to free competition in the telecommunications market.
• TIM is a strong believer in Turkey's potential and in its ability to modernize. This conviction extends to the telecommunications industry.
• Indeed, despite its current economic woes, the financial community continues to keep an interested eye on your country's huge potential, and on its plans for modernization and development.
• At the present time, Turkey as a nation knows that it has what it takes to become a full member of the European Union.
• The very fact that I am here today shows how confident TIM is about Turkey. As you know, the TIM Group currently enjoys undisputed leadership in mobile telephony technology and in the mobile telephony market, with more than 48 million customers worldwide. The Group already offers these customers highly innovative services that draw upon leading-edge technologies such as WAP and GPRS in the run-up to launch of UMTS (three licences: Italy, Spain and Austria).
• The TIM Group has a dedicated organizational structure and specific strategy for its international operations: following rationalization of wireline operations, which are now managed by parent company Telecom Italia, Group mobile operations are handled by TIM. Where we are present we are building strong, streamlined structures staffed by human resources capable of rising to the challenge.
• Our goal is a selective presence in the areas we have identified as strategic to development of our business -- Latin America, Europe and the nations surrounding the Mediterranean Basin: growing markets where we are consolidating our position.
• To conclude, I believe that though keeping a close eye on the current financial crisis, Italian businesses perceive Turkey as a major market, a bridge between Europe, the Middle East and the Asian Republics of the former Soviet Union, with which Istanbul has a special relationship. Turkey occupies a decidedly strategic geographical location. At the present time, it is still too early to say which of the two sides of the country's spirit will prevail: whether it will be the faction that is in favour of high inflation, of making money from the profitable treasury bonds market and preventing any change to the status quo, or else the young, entrepreneurial, pro-European part of the country which favours rigour and transparency.