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Turkey and EU

Turkey and EU. Presentation for TASNO 19 August 2005 Dr. Uğur Aker. Outline. Short History Economic Effects Single market Institutional reform Expected Migration from Turkey to EU Cultural Factor. Short History.

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Turkey and EU

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  1. Turkey and EU Presentation for TASNO 19 August 2005 Dr. Uğur Aker

  2. Outline • Short History • Economic Effects • Single market • Institutional reform • Expected Migration from Turkey to EU • Cultural Factor

  3. Short History • European Coal and Steel Community (1951) - cooperation between six countries. • Treaty of Rome - EEC Treaty(1957) - formation of customs union. • Turkey applied for associate membership in 1959.

  4. Short History • Turkey signed an association agreement with EEC (first step to membership) in 1963. • Czech Republic signed an association agreement in 1993. • Turkey submitted a formal application for membership in 1987. • Poland and Hungary applied in 1994.

  5. Short History • EU granted financial assistance and preferential tariffs initially but during the 70s and early 80s gradual, mutual reductions in tariffs and non-tariff barriers were suspended.

  6. Short History • Customs Union started in 1996 and completed in 2001. • Industrial goods between Turkey and EU are free from tariffs and quantitative restrictions. • Turkey has aligned its trade policies with the EU.

  7. Short History • The agreement with Turkey goes beyond a normal Customs Union. It also covers the harmonization of technical legislation, the elimination of monopolies and the protection of intellectual property. • Negotiations continue on the mutual opening of public procurement markets, liberalization of trade in services, and the abolition of restrictions on the freedom of establishment.

  8. Short History • In Helsinki (1999) Turkey became the only candidate for membership without a timetable. • Cooperation for adopting the legal framework (acquis communautaire). • In Nice (2000) a revision of vote distribution excluded Turkey implying that EU-15 did not plan for Turkey to become a member in the foreseeable future.

  9. Short History • The Progress Report in 2002 stated that Turkey did not fulfill the Copenhagen (1993) criteria of political and human rights. • Political and human rights: “stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.”

  10. Copenhagen Criteria • Economic criteria declared to be fulfilled in 2003 Progress Report: harmonizing with EU in terms of electricity, financial services, agriculture and telecommunications. • Progress Report in October 2004 acknowledged fulfillment of the political and human rights criteria.

  11. Short History • “Major political developments in the country led to the decision to open accession negotiations at the December 2004 European Council summit.” ROMANO PRODI, THE PRESIDENT OF THE EUROPEAN COMMISSION, Ankara, 14 January 2004

  12. EU Objections • “Turkey is too big; it will be the most populous country in EU.” • “Turkey is too poor.” • “Turks will flood Europe.” • “Turks are a different culture.”

  13. Economic Effects • Budget burden • Becoming a single market • Institutional reforms • Migration

  14. EU Budget Burden • Current framework: 2000-2006 (EU-15) • 2007-2013 Framework (EU-25) • 2014-2020 Framework (EU-27/28) • The optimistic date for Turkey’s accession is 2015 under rules determined by EU-27/28. • Full budgetary support will not be implemented before 2020.

  15. EU Budget Burden • Daniel Gros, Director of Center for European Policy Studies, estimates that Structural Funds (for regions with a GDP per capita at PPP below 75% of the EU average) contribution to Turkey in 2015 would be about 0.16% of EU-28 GDP under the current rules, assuming that Turkish GDP reaches 4% of EU-28 by 2015.

  16. Agriculture • In 2001, agriculture comprised 14.2% of value added in the Turkish economy. This share was smaller than that for Bulgaria (28.2%) and Romania (19.3). It was much larger, however, than in the CEEC-10 (6.9%), and the EU-15 (2.5%). • 5% of GDP transferred to farmers. • guaranteed output prices, • import protection, • export subsidies, • subsidized services to farmers • Agricultural policy is being gradually reformed, eliminating market interventions in favor of direct payments.

  17. EU Budget Burden • Assuming that Turkish agriculture will comprise 10% of Turkish GDP in 2015 (it is 12% today), and the CAP support will still be 20% of agricultural income, the EU CAP burden will be (0.2*0.1*0.04) 0.08% of EU GDP. • But Turkey will be required to contribute 1.2% of its GDP to EU Budget.

  18. EU Budget Burden Maximum budgetary cost, full membership Turkey 2015 in an enlarged EU (in % of EU GDP) Structural Funds 0.16 CAP receipts 0.08 Total receipts 0.25 Contributions to EU budget 0.05 (Max) Net receipts for Turkey 0.20 According to Michaele Schreyer, Commissioner responsible for the Budget, the cost of CEEC-10 will be 0.08% of EU-15. (Brussels, 18 April 2002). Yet, the European Commission estimates that the long-run effect will be positive 0.4% of GDP for EU-15.

  19. Economic Effects • Trade liberalization of Turkey integrated her more to the rest of the world. • The sum of imports and exports as a share of GDP was only 18% in 1980; it increased to almost 50% in 1999, and 54% in 2004. • A relatively low degree of openness implies that a trade increase due to the single market has less effect on the total economy than for countries with a higher degree of openness.

  20. Membership Means More Customs Union has not catapulted Turkish standard of living as much as membership did for the other comparable countries.

  21. Economic Effects • Accession to the internal market may increase trade for at least three reasons. • Administrative barriers to trade will be eliminated or at least reduced to levels comparable to those between current EU members: less time delays, less formalities at the border. • Reduction in technical barriers to trade. Mutual recognition of different technical regulations, minimum requirements and harmonization of rules and regulations. • Risk and uncertainty will be mitigated. Especially political risks and macroeconomic instability may reduce substantially.

  22. Economic Effects • According to Lejour & De Mooij, aggregate trade with the EU can rise by 34% if Turkey were full member of the EU, as compared to the situation in 2001. • WorldScan simulations yield 20.3% increase (8.1% exports and 12.2% imports).

  23. Institutional Reform • Turkey has to conform to all EU legislation and enforcement by the European Court of Justice. • Turkey will regularly be assessed by the European Commission and other Member countries on its economic policies. • EU-membership can thus trigger institutional reform in Turkey and reduce corruption. • Internationally Turkey ranks low on the corruption index.

  24. Turkey’s rank in 2004 was 77th with a score of 3.2.

  25. Institutional Reform • If by improving institutions and obtaining more discipline within bureaucracies, the TI Corruption Perceptions Index of Turkey would rise from 3.2 to 6.3 (Portugal’s rank), aggregate trade of Turkey would rise by 57%.

  26. Migration • Most migration predictions use • Proximity • Income differences • Job opportunities • “Kinship” connections

  27. Productivity • These productivity comparisons show that the Turkish economy is not only on average ‘more developed’ than the economies of Romania and Bulgaria, but Turkish productivity outside agriculture is close to, or in some cases even higher than what we observe in the new member countries.

  28. EU-15 labor markets closed up to 7 years after accession. • Full mobility of Turkish workers in 18-25 years. EU labor markets in 2025 • ageing of the population (not only among the EU-15, but also the new members) • there might be labor shortages, instead of the widespread unemployment. • If Turkey grows according to its potential, it might no longer be so attractive for Turkish workers to emigrate. • The experiences of Greece, Portugal and Spain indicate that a successful accession period with high growth and effective implementation of the reforms reduces and gradually eliminates the migration pressures.

  29. Slower Growth More Migration Deutsche Bank suggests three possible scenarios for Turkey over the next 15 years. In the first, Turkey pursues the economic and political reforms needed to converge with the EU; in the second, it drifts back to the weak governments of the 1990s, but with less economic volatility; and in the third, it is destabilized by geopolitical uncertainty, kept at bay by the EU and polarized by tensions between secular and religious forces. The long-term annual growth rates associated with these scenarios are, respectively, 4.1%, 3.1% and 1.9%

  30. Migration • Keeping GDP per capita at 31% of EU-15 average but including demographic changes into their calculations, Lejour and De Mooij forecast migration from Turkey to the EU of 2.7 million people by 2025. This equals 4% of the current Turkish population, or another 0.7% of the current population in the EU-15.

  31. Why? • Economic calculations yield positive results for EU and for Turkey. • Turks overwhelmingly want to become a member country. • But why is there such a visceral objection to Turkey’s membership? • What is the “cultural” difference?

  32. Turkey Is Knocking, but EU Is Hesitating Since when do you toss a rotten apple into the barrel to improve the diversity of the pippins and macintoshes? Europe is planning its own cultural demise by aquiescing to the demands of Turkey to be admitted to the EU, which will allow the free flow of Turkish Muslims throughout Europe. Officials are aware of the dangers, but are willing to plunge ahead anyway, despite all the recent Muslim violence and the chasm of culture. In Turkey, the practice of "honor killing" continues, and dozens of girls and women are murdered annually for affronts to impossibly rigid gender behavior codes.     As is increasingly the case in modern "democracies," multiculturalism-brainwashed elites in government are ignoring the polls which show their citizens reject the scheme. Seventy percent of Germans believe that Islamic culture does not fit in the west, and 55 percent are against Turkey's EU entry, as are 67 percent of the French.     The BBC believes Turkey's EU inclusion will "disprove the theory of a clash of civilisations between Islam and the West" — as if a political union could end the tribal nature of human psychology or obliterate a thousand years of enmity. http://www.limitstogrowth.org/WEB-text/archive-dec04.html

  33. Thousands took to the streets in Milan Dec. 19 to protest Turkey's accession to the EU, calling it a "Muslim invasion." In a statement, leader of the Northern League Umberto Bossi said, "Without our history we are dead, our history is not up for sale." Organizers estimated that 50,000 took part in the demonstrations.     Justice Minister Roberto Castelli spoke to the crowd gathered around Milan's gothic cathedral and asked, "What will happen when 80 million Islamists with a high birth rate have the right to settle on our land?" http://www.limitstogrowth.org/WEB-text/archive-dec04.html

  34. ”It would be “the end” of the EU if Turkey were ever actually to get in. Turkey is by definition unacceptable as an EU member.” Valerie Giscard D’Estaing Another fear-mongering site: http://www.e- grammes.gr/ turkman.htm

  35. Voices of Reason • European Union is, above all, a community of shared values based on the principles of liberty, democracy, human rights, fundamental freedoms and the rule of law. All these values are enshrined in the Charter of Fundamental Rights of the European Union. SPEECH OF ROMANO PRODI, THE PRESIDENT OF THE EUROPEAN COMMISSION, AT THE TURKISH GRAND NATIONAL ASSEMBLY. Ankara, 14 January 2004

  36. Voices of Reason • The proposition that Europe can be defined by religion is a false one, not to say dangerous. In many ways, the European Union is a reaction against the idea that we can define ourselves by religion or ethnicity — and thus define others as beyond consideration. Chris Patten, EU Commissioner for External Affairs (From his May 2004 speech)

  37. Two Perceptions of Culture • Pre-political: ascriptive - identity and collective unity based on common descent, religion, race, ethnicity etc. • Political: centered on the civic aspect of one’s identity and collective unity based on citizenship. • In the construction of modern Europe, ascriptive culture has been the problem and civic culture the solution.

  38. Voices of Reason • What is common to the modern Europe of nation-states is precisely a civic culture embedded in a secular, democratic and constitutional concept of citizenship equipped with individual rights and responsibilities.  This is the achievement of the European nation-states against the background of a painful history of wars, massacres, and expulsions that were inflamed by differences of religion, sect, race and ethnicity.  Whereas ascriptive cultures divide Europe, it is the achievement of civic culture that unites them. Prof. Ilkay Sunar

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