Economy of Turkey and the European Union in Early 2000’s

Turkey-European Union (EU) relations have followed a rolling chart from 1959 until 1999. After the Helsinki summit in 1999, relations have become increasingly accelerated. The result of this summit was Turkey's recognition of candidacy status. This development has been important in terms of Turkey-EU relations. Despite the fact that Turkey's adventure with the European Union has been almost half-past recently, it is not a member yet, and the confusion of thoughts and feelings on the issue is still on the table.

Turkey is a country with economic ties with the European Union, because the European Union sees Turkey as a bridge to reach rich natural resources in the Caucasus and Central Asia, and the European Union does not want to exclude it because it wants to benefit from the cheap human potential in Turkey.

The EU is a regional integration project with economic and political objectives. It is possible to aggregate the forms of economic integration roughly into five categories: Free Trade Area (STA); Customs Union (GB); Common Market (OP); Monetary Union (PB); and Economic Union (EB).

The customs barriers in front of the movement of goods and services among member countries in the related STA have been abolished. In addition to the STA in GB, common customs tariffs are applied against third countries and the circulation of the workforce is liberalized in addition to goods and services in the OP. In PB, in addition to the OP, a common currency is used; in the last, all economic policies are shared. In this framework, the EU is a project that has gone beyond the first three stages, has made its fourth start and is moving towards becoming the most successful example of regional integration efforts in the world, adding political targets to economic targets that target the fifth stage in the future.

Turkey is a country that has close ties with the EU in economic terms. The EU Commission, the Progress Report of October 6, 2004, and the Copenhagen Summit of December 17, 2004, agreed that the negotiations should be launched on 5 October 2005. In the 6 October 2004 Progress Report on the recent positive and negative developments in the Turkish economy, it was emphasized that the Turkish economy recorded significant distances after the crisis experienced in 2001, and that Turkey was successful in achieving macroeconomic stability and foreseeability. Positive developments in the struggle with inflation and transparency in the public sector's financial management were emphasized.

Turkey Copenhagen Political Criteria and the negotiation date were given. In addition, the population of EU countries is gradually decreasing and aging. Turkey, on the other hand, has a young and dynamic population structure, with annual population growth of 1.5 percent. In terms of industrialization, Turkey has also developed a dynamic young entrepreneurial power, especially in the last 20 years. These numerical facts indicate the potential of Turkey in terms of its economy and in terms of similarity to the one of the EU countries.

The entry of Turkey into the Customs Union with the EU (GB) has irrevocably opened up international competition for domestic producers, thus contributing significantly to the reduction of the forces of incompetent and protective lobbies. As a result, companies that produced expensive goods with low efficiency have been forced to reorganize, produce quality and cheap goods, increase production and export. Turkish textile and apparel, automotive and electronics industries are the best examples of this.

Approximately 60 percent of the foreign trade of the EU countries is between them and the share of Turkey's imports in the EU is around 3 percent. So, from the point of view of foreign trade alone, the prominence of Turkey for the EU is the most important for us (Iran and Iraq) (in terms of foreign trade). Because, in our exports, the share of the above countries is 1, 2 and 3 percent respectively.

The situation of the Turkish economy is one of the main factors determining the EU-Turkey relations. The European Union will face serious problems in integration the Turkish economy because of the high inflation rates, per capita national income, unemployment rates, the fact that domestic and foreign debt indicators are far from EU standards, and that the Turkish Economy has the largest economy among candidate countries. However, the EU also has a role in these problems. Because the EU has not fulfilled its obligations arising from the Treaties in order to strengthen the Turkish economy. Financial assistance, which has been an important issue for many years in relation to EU-Turkey relations in relation to Greece, lost its former significance with the new regulations that the EU made in 2000.

Based on the economic criteria of the EU, the Member State has the capacity to resist market forces and competitive pressures within the Union as well as the existence of a functioning market economy. For an efficient market economy, the market forces of the supply-demand balance should be established with an independent interaction, prices should be liberal and stable, and the financial sector should be good. To ensure competitiveness within the EU, economic institutions that are able to make decisions in a predictable and stable environment should be in macroeconomic stability, sufficient physical and human capital including infrastructure, education, and research, and the capacity of firms to adapt to technology needs to be found.

Esin Gedikoğlu

 [artigo de opinião produzido no âmbito da unidade curricular “Economia Portuguesa e Europeia” do 3º ano do curso de Economia (1º ciclo) da EEG/UMinho]