The February 28th coup, which aimed to redesign politics as well as society, brought on a heavy bill to the nation's economy.
The robbery of public finance, which began after 1997, increasing the interest rate into the triple figures due to the fear inflicted by the 'reactionaries are coming' lobby, and the inflammation of budget expenditures with high interest rates and the siphoning of public banks all worked together to drag the nation step by step into what would become the 2001 financial crisis. The five year stretch from February 28th, 1997 to February 21st, 2991 has gone down in Turkey's economic history as a complete economic and financial collapse. In other words, the price of the postmodern coup has cost this nation over 300 billion dollars.
A BLOW TO THE TREASURY
The first bill was paid by the treasury and interest rates reached the triple digits. In February, 1997, the Treasury went into debt at 106%, and eventually saw the 193 percentile level due to the debt incurred. The interest rate rarely saw double digits during the five year period. The interest load was reflected on the budget and the nation's citizens continued to become impoverished.
INTEREST BREAKS THE BUDGET
The high interest payments rocked the budget balance. While in 1999, the budget had to dish out 1.4 billion liras in interest, this figure surpassed 41 billion in 2001. While the rate of interest payments against the national income was at 7.7 percent in 1997, in 1998 it went up to 11.5 percent, in 1999 13,7 percent, in 2000 16.3 percent and in 2001 reached the 23.3 percentile level. While in 1997 the national income was at 194.1 billion dollars, by 2001 the figure had regressed to 180.3 billion dollars. Over a five-year period the budget deficit multiplied by 14. In 1997 the budget deficit was at 2.2 billion liras. In 1999 it surpassed nine billion. In 2000 it went up to 13.2 billion and by 2001 it had reached 29 billion liras. While in 1997, the budget deficit rate compared to the national revenue was at the 11.3 percentile, in 1999 it went up to 13 percent, in 2000 it dropped to 12.7 percent and in 2001 rose again to a whopping 17.4 percentile.
Inflation in the 70 percentile
Inflation remained in the double digits for an extended period of time. In 1997 the consumer price index raised to the 99.1 level and in 2001 it was at 68.5 percent. Inflation finally dropped to the single digits in 2003.
During the era following the coup, based on the directives of the government in place, the public banks safes were emptied out. When the treasury was unable to pay out due to irregular and popularist based distribution of funds, the figures multiplied with interest. Ziraat Bank's damage incurred at the time went from 1.1 billion liras to 12.1 billion. Halkbank's incurred damage rose to ten billion liras. Emlakbank completely went through its equity in 2000 and in the end had to close up shop.
The deficit in public finance increased both foreign and national debt. By 2001, the 84 billion dollar foreign debt in 1997 had increased to 113 billion dollars. Internal debt went from 6.2 billion liras to 122 billion liras. Short term debt also began to increase exponentially. In 1999, when a number of international establishments accepted the fact there was a crisis, the foreign debt rate compared to the national income rate surpassed the 50 percentile level. In 2001, due to the melting of national revenue, this figure rose to 94 percent.