Internal debt of Northern Cyprus to exceed 10 billion Turkish lira: government under fire for financial discipline

The Central Bank plans to hold an auction on domestic government debt, as a result of which the total debt will exceed the critical threshold of 10 billion ₺.

According to the plans, the auction will take place on August 25. Through the Ministry of Finance, borrowing will be raised in the amount of 20 million USD, 25 million EUR and 20 million GBP. At the current exchange rate, the sum of these loans in Turkish lira will be approximately 3.126 billion ₺, which will increase the total volume of domestic government debt to about 10.35 billion ₺.

Finance Minister Özdemir Berova stressed that the increase in borrowing is mainly related to salary payments for public servants. When drafting the 2024 budget, a deficit of 18 billion ₺ was planned, and the Ministry aimed to limit the scale of borrowing and reduce the deficit. According to Berova, state finances remain stable, and claims of imminent economic collapse are unfounded.

However, Republican Turkish Party (CTP) MP Devrim Barçın criticized government measures. According to her, while 44 cooperative employees are being dismissed, 20 new employees are being recruited to the Deputy Prime Minister’s office. This paradox, she argues, shows that the statements about financial discipline do not match the government’s actual actions.

The anger of cooperative workers, who have been on an indefinite strike for nine days (since August 12), has intensified: they demand not only the payment of overdue salaries but also the reinstatement of the 44 dismissed employees. The government claims that the cause of the delays has been resolved and that salaries will be paid with inflation adjustments, but the union insists on reversing the dismissals.

Thus, despite statements that borrowing is solely related to salary payments, the facts of dismissals and simultaneous hiring of new employees in government bodies provoke criticism in society. The combination of growing debt, ongoing strikes, and controversial staffing priorities highlights the gap between declarations and the government’s real actions.