Abstract:

2008 economic crisis would have several implications on developing countries since developing countries have several inadequacies in relation to institutional adjusments for regulation of their financial markets in european economies. These inadequacies cause important problems in their markets. Investments are the driving power of economies since they create new businesses which provide several benefits to economy such as employment and profit. However, increased debt levels of countries affect countries’ savings and their investments negatively. It also cause an environment of uncertainity for foreign direct investments and increase the level of capital outflow. Increased capital outflow worsens the problem since it results in economic fragility and a more unbalanced level of savings and investments. Turkey, as in the case of other developing countries, have frequenty applied the method of external debt. However, financial crisis in Europe that started brought together important questions on whether sustainibility of debts would be possible in the members of European Union. This study aims to discuss the possible implications of European debt crisis on developing countries in the case of Turkey.

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