Transcript turkey - Dokuz Eylül Üniversitesi

The European Union–Turkey:
Economic Relationships
Utku UTKULU, Prof.
Dokuz Eylül University
FEAS, Department of Economics
Utku Utkulu&Aydın Arı
Plan
Turkey in the Integration Process
Institutions of the EU
Customs Union
Economic and Monetary Union (EMU)
The enlarging EU
The EU-Turkey: A Brief History
The EU-Turkey: Glossary
The EU-Turkey: Present Day
Utku Utkulu&Aydın Arı
Turkey in the Integration Process
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International Economic
Integration
Liberalisation of the World Trade
Customs Union
European Union
Utku Utkulu&Aydın Arı
International Economic Integration
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Integration is a process in which it has to be
taken some measures against discrimination
between economic agents of the NationStates volunteer to integrate.
The main goal is the liberalisation of trade in
that area by putting away discrimination.
Integration differs from cooperation:
 Cooperation aims at diminishing
discrimination,
 Integration aims at removing
discrimination.
Utku Utkulu&Aydın Arı
Measures for removal of discrimination
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Removing of
Tariffs and,
Non-tariff barriers;
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Accommodation of
Taxes and,
Monetary and fiscal policies;
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Construction of
joint policy and decision mechanism.
Utku Utkulu&Aydın Arı
The main feature of Integration
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Is the liberalisation of trade.
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Another is the free movement of the production factors.
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Further on geographical distance and transportation
costs, the more important requirement is the removal of
discrimination made by States over goods and services
and, production factors movements.
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Integration differs from
- the liberalisation of the world trade,
- the globalisation.
Utku Utkulu&Aydın Arı
Types (or Stages) of Integration
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Preferential Trade Agreement
Free Trade Area
Customs Union
Common Market
Economic and Monetary Union
Economic Integration
Political Integration
Utku Utkulu&Aydın Arı
Liberalisation of the World Trade:
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Is the main purpose of the New Economic
Order after World War II.
Is based upon the General Agreement on
Tariffs and Trade (GATT) which entered into
force in 1948 and terminated on 1995.
The number of the State signed GATT after
Uruguay Round (1986-1994) is 125;
one of them is Turkey.
A Brief Description Of International Trade
Agreements
Utku Utkulu&Aydın Arı
GATT
GATT set up a series of negotiating rounds intended
to reduce and gradually eliminate quotas, duties,
and tariffs.
Important articles are:
 Article I General Most-Favoured-Nation Treatment;
 Article III National Treatment on Internal Taxation
and Regulation;
 Article XI General Elimination of Quantitative
Restrictions;
 Article XIII Non-discriminatory Administration of
Quantitative Restrictions;
 Article XVI Subsidies;
 Article XX General Exceptions;
Utku Utkulu&Aydın Arı
GATT mainly aimed at
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No discrimination on trade,
Tariffs only for protection of National
Economies against international competition
Equivalent concession
Mediation when commercial disagreement
occurs
Measures against unfair competition
World Trade Organization (WTO) substituted for
GATT after 1995.
www
Utku Utkulu&Aydın Arı
Institutions of the EU
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European Union
European Parliament
Council of the European Union
European Commission
Court of Justice
Court of Auditors
European Investment Bank
Economic and Social Committee
Committee of the Regions
European Ombudsman
Agencies of the European Union
Utku Utkulu&Aydın Arı
Customs Union
The Customs Union between Turkey and the EU has been in
force since the beginning of 1996. It has completed its six
years of implementation.
It is more than a typical Customs Union, which foresees
arrangements on areas including competition, state aids,
technical legislation and intellectual property rights.
Although it can be said that the Customs Union has been
functioning well in general, there are also certain problems
regarding trade. Most of the problems faced by exporters
and importers both of Turkish and the EU origin concern
technical regulation and testing requirements.
Utku Utkulu&Aydın Arı
www
Economic Effects of Customs Union
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Static Effects
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Trade creation
Trade diversion
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Utku Utkulu&Aydın Arı
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Dynamic Effects
Economies of scales
externalities
Increasing
competition
Technological
progress
Increasing investment
Decreasing risk and
uncertainty
Increasing exchange
reserves
industrialisation
PX
SA
PC(1+t)
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H
E
L
PB
J
F
PA
K
0
Q3
G
Q1
DA
Q2
Q4
QX
Long run average
costs
UOM1
C
M4
M3
M2
UOM2
M1
D
B
0
Q1
Q2
Q3
Q
Effects of the Customs Union
(EU-Turkey) on
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Balance of Payments
Export industry
SMEs
State aids (investment, export)
Agricultural sector
Fiscal balance
Productivity
On Competition
Utku Utkulu&Aydın Arı
The consequences of CU
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Turkey's share in EU's total exports was 2.3% in
1995 and 2.7% in 1999.
The same figure for imports was 1.7% in 1995
and 1.9% in 1999.
As one can see, Turkey's share both in term of
import and exports in EU's trade developed
positively and in equal manners.
As of 1999, Turkey is the EU's 7th biggest
export destination (up from 9 in 1990) and 13th
biggest exporter to the EU (up from 17 in
1990). This shows that both sides profited from
the Customs union agreement.
Utku Utkulu&Aydın Arı
The consequences of CU
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For consumers the CU has brought better quality,
cheaper products and more variety, because of
increased competition in the Turkish market.
Consumer protection will be increased as
European technical norms are used.
Producers and industry also benefit from cheaper
and higher quality inputs, as well as access to a
stable and large export market. The existence of
a large and stable export market proved its
importance during the economic crisis of 1998,
when Turkey's exports to major destinations other
than the EU declined whereas the EU continued to
be the principal export market for Turkey and
offset some of the negative effects of the crisis:
Utku Utkulu&Aydın Arı
The consequences of CU
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EU share of Turkish exports up from
46,6% in 1997 to 50% in 1998 and
53,9% in 1999 whereas EU imports
stayed stable at 51-52% over the same
period.
Exports to non-OECD countries in the
same period declined from 40,7% in
1997 to 37,1 in 1998 and 29,2% in
1999).
Utku Utkulu&Aydın Arı
The consequences of CU
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Almost half of Turkey's total trade is with the EU
in general and this profile has not changed since
the Customs Union has been in force.
The EU share in Turkey's exports was 51.2% in
1995 (a year before the entry into force of the
CU) and this figure was 52.5% in 2000.
EU imports in Turkey's total imports were 47.2%
in 1995 and 48.9% in 2000.
As one can see, the EU share has been stable
and fluctuations are mainly due to the instability
of the Turkish currency and the Turkish
economy.
Utku Utkulu&Aydın Arı
The consequences of CU
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Before the Customs Union, in 1993, 1994 and
1995, the EU's share in Turkey's trade deficit
stood at 44,56%, 44,15% and 41,09 %,
respectively.
In 2000, this figure is at 45,15%. This shows
that the Customs Union has not widened the
trade deficit in relative terms.
Of course the total absolute trade deficit volume
has increased, but this is due to the increase in
overall trade and currency fluctuations.
Utku Utkulu&Aydın Arı
The consequences of CU
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Turkish exports to the EU in textiles and
clothing reached in 2000 Euro 7,5 bn; this
represents an increase of almost 1 bn over
1999 and of 72% over 1995 (4,3 bn Euro); this
compares with an increase of total EU imports
in the sector of only 54%.
The Turkish surplus in textiles and clothing
reached euro 5,8 bn in 2000 - this is an
increase of 65% over their surplus in 1995. The
Turkish share of EU imports in this sector also
increased, from 9,5% in 1995 to 10,8% in
2000.
Utku Utkulu&Aydın Arı
1999
Trade with
2000
2001
Exp
İmp.
Exp/
Imp
Exp
(%)
Imp
(%)
Exp
İmp.
Exp/
Imp
Exp
(%)
Imp
(%)
Exp
Germany
5.475
5.880
93,1
38,2
27,5
5.150
7.150
72,0
35,5
26,9
5.362
5.334
100,5
33,3
29,5
Italy
1.683
3.192
52,7
11,7
14,9
1.748
4.305
40,6
12,0
16,2
2.333
3.480
67,0
14,5
19,3
UK
1.829
2.190
83,5
12,7
10,2
2.020
2.699
74,8
13,9
10,1
2.173
1.800
120,7
13,5
10,0
France,
1.570
3.127
50,2
10,9
14,6
1.643
3.511
46,8
11,3
13,2
1.893
2.284
82,9
11,8
12,6
Netherlands
932
1.315
70,9
6,5
6,1
869
1.561
55,7
6,0
5,9
890
1042
85,4
5,5
5,8
Belgium/Lux
624
1.133
55,1
4,3
5,3
639
1.646
38,8
4,4
6,2
681
890
76,5
4,2
4,9
Spain
763
1.262
60,5
5,3
5,9
683
1.665
41,0
4,7
6,3
945
1062
89,0
5,9
5,9
Austria
312
508
61,4
2,2
2,4
292
514
56,8
2,0
1,9
341
415
82,2
2,1
2,3
Greece
407
303
134,3
2,8
1,4
432
416
103,8
3,0
1,6
473
266
177,8
2,9
1,5
Denmark
199
206
96,6
1,4
1,0
217
196
110,7
1,5
0,7
271
196
138,3
1,7
1,1
Sweden
183
1.444
12,7
1,3
6,7
199
1.437
13,8
1,4
5,4
213
544
39,2
1,3
3,0
Other (*)
371
856
43,3
2,6
4,0
618
1.510
40,9
4,3
5,7
503
748
67,2
3,1
4,1
14.348
21.416
67,0
100,0
100,0
14.510
26.610
54,5
100,0
100,0
16.078
18.059
89,0
100,0
100,0
EU MEMBER
AB Toplamı
İmp.
Exp/
Imp
Exp
(%)
Imp
(%)
Economic and Monetary Union
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An aspect of the European Union designed to
integrate economic and monetary policies and
establish a single currency (the euro). The EMU was
created by the 1992 Maastricht Treaty and officially
came into existence in 1999. The European Central
Bank has control over monetary policy and the
money supply for the EMU.
EMU not only mean free movement of citizens,
goods and services, and capital but also fixed
exchange rates of national currencies and a unique
money (the Euro).
In order to reach those goals, joint monetary
policy, accommodation of economic policy, specially
for fiscal policies, are needed.
www
Utku Utkulu&Aydın Arı
Euro:
a single currency for Europe
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The euro is the name of the single European
currency that was put into circulation on 1
January 2002. The symbol of the euro is €.
The euro has replaced the old national
currencies in 12 European Union countries:
Austria, Belgium, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal and Spain.
Having a single currency makes it easier to
travel and to compare prices, and it provides a
stable environment for European business,
stimulating growth and competitiveness.
Utku Utkulu&Aydın Arı
Obligations for EMU
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Free movements of goods and services, capital
and labour,
Joint tariffs,
Fixed exchange rate between national
currencies,
Accommodation of economic and monetary
policies,
Approached fiscal policies, as possible as,
Joint monetary policies against third countries,
One central bank: ECB.
Utku Utkulu&Aydın Arı
For accession to EMU
Exact convertibility of all currencies
of joining countries,
 Complete liberalization of capital
flows and, financial market
integration,
 Removal of margin to float of
national currencies and irreversibly
fixed exchange rates.
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Utku Utkulu&Aydın Arı
Customs Union & the EMU
 In case of a CU,
participants remove
tariffs to each other
but apply joint tariffs
to third trading
partners.
 CU is a partial
agreement which is a
stage of the EMU.
 In the EMU, two features are
very important: free movements
of production factors and
accommodation of economic and
fiscal policies.
 The EMU discipline economic and
fiscal policies of participant
countries because it aimed at
stability of those policies.
 In the EMU, one important aim
is the fairly redistribution of
income, so it is most favourable
for low income countries.
 The EMU is a required stage for
accession to EU.
Utku Utkulu&Aydın Arı
Effects of joining the EMU
Positive effects
microeconomic
 Diminishing transaction costs
 Removal of exchange rate
uncertainty
macroeconomic
 Progress in inflation and interest
rate
 Changing Union’s reserve policy
 Developing capital markets
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Utku Utkulu&Aydın Arı
Negative effects
Adjustment problems of member
countries in face of demand
shocks.
Alternative choice of inflationunemployment trade-off for
separate country can cause
inequality among policy results.
Nominal wage increases
depending upon labour markets’
centralisation degrees
Wealth loss for faster growing
economies.
Wealth loss due to the financing
method of budgetary deficits.
Probable Effects of the EMU on
Turkish Economy
Why Turkey is going to be
affected directly:
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Turkey’s exports to the euro area 39%;
imports from 43%
Tourists, foreign investment and workers’
devises are mainly from the euro area
There is a valid Customs Union
Agreement with the EU. A great part of
the accommodation is already
maintained.
Utku Utkulu&Aydın Arı
Probable Effects of the EMU on
Turkish Economy
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Direct effects
Euro shall bring Turkey some
obligations, such as monetary
and exchange rate policies.
Euro’s share in Turkey’s
reserves has been increased.
Transactions with euro in
external trade have been
increased.
Macroeconomic stability
should be maintained as well
as price stability.
Costs of borrowing in terms of
euro diminishes.
Firms should take care of real
competitive policies.
Utku Utkulu&Aydın Arı
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Indirect effects
Those arising from
intensive economic and
trade relationship.
Those positively affecting
expectations in Turkey,
such as falling interest
rates, rising investment
and faster growth rate in
the euro area.
The Enlarging EU
Member States
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Germany
Austria
Belgium
France
Spain
United Kingdom
Ireland
Italy
The Netherlands
Denmark
Sweden
Luxembourg
Finland
Portugal
Greece
New Member States
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Cyprus,
Malta,
Hungary,
Poland,
the Slovak Republic,
Lithuania,
Latvia,
Estonia,
the Czech Republic
Slovenia
Applicant Country
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Romania
Bulgaria
TURKEY
Utku Utkulu&Aydın Arı
Enlargement:
Looking back on history
The Treaties of
 Paris (1951), establishing the European Coal and Steel
Community (ECSC),
 Rome (1957), establishing the European Economic
Community (EEC),
 EURATOM, were signed by six founding members:
Belgium, France, Germany, Italy, Luxembourg and the
Netherlands.
The EU then underwent four successive enlargements:
 1973 - Denmark, Ireland and the United Kingdom
 1981 – Greece
 1986 - Portugal and Spain
 1995 - Austria, Finland and Sweden
Utku Utkulu&Aydın Arı
Copenhagen, 1993
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In June 1993, the Copenhagen European
Council opened up the perspective of
enlargement to include the countries of
Central and Eastern Europe.
The Council laid down the foundations of the
current enlargement process by declaring
that "the associated countries in Central and
Eastern Europe that so desire shall become
members of the European Union” and by
defining the membership conditions, the socalled Copenhagen criteria.
Utku Utkulu&Aydın Arı
Under the Copenhagen criteria,
membership requires that
the candidate country ensures :
"stability of institutions
guaranteeing democracy, the rule
of law, human rights and the
respect for and protection of
minorities”:
the political criteria.
Utku Utkulu&Aydın Arı
Since the entry into force of the Treaty of
Amsterdam in May 1999, these requirements
have been enshrined as constitutional
principles in the Treaty on European Union,
and have been emphasised in the Charter of
Fundamental Rights of the European Union,
that was proclaimed at the Nice European
Council in December 2000.
Utku Utkulu&Aydın Arı
“the existence of a functioning market economy
as well as the capacity to cope with
competitive pressure and market forces within
the Union” :
the economic criteria.
These criteria are consistent with the principles
for economic policies as enshrined in the EC
Treaty by the Maastricht Treaty that entered
into force on 1 November 1993.
Utku Utkulu&Aydın Arı
“ability to take on the obligations of membership,
including adherence to the aims of political,
economic and monetary union".
This criterion refers to the implementation of the
Union’s legislation, known as the acquis
communautaire. For that reason, it is referred to
thereafter as the acquis criterion. Subsequent
European Councils, in particular the Madrid
European Council in 1995, have highlighted the
importance, not only of incorporating the acquis
into national legislation, but also of ensuring its
effective application through appropriate
administrative and judicial structures.
Utku Utkulu&Aydın Arı
www
Economic Analyses of
enlargement
Numerous economic analyses have concluded
that the benefits of enlargement outweigh the
costs. Although the benefits are relatively
larger for the acceding countries, because they
start from a lower economic base (their
economies represent only about 6% of the
GDP of EU-15), there are gains for both sides.
Moreover, the future members, already
exposed to the challenge of globalisation, will
help the Union to surmount it.
Utku Utkulu&Aydın Arı
Enlargement is a
‘positive-sum’ game
A key academic study ("The Costs and Benefits of
Eastern Enlargement", R. Baldwin, J.F. François and R.
Portes, Economic Policy 24, 1997) by the Centre for
Economic Policy Research estimated that accession of
countries of Central and Eastern Europe would –even
in a conservative scenario– bring an economic gain
for the EU-15 of € 10 billion, and for the new
members of € 23 billion.
The latest analysis of business circles argues that there
are ‘potentially huge economic and business benefits
of taking applicant countries into the EU as soon as
possible’. ("Opening up the Business Opportunities of
EU Enlargement", European Round Table of
Industrialists, May 2001. See also "Profiting from EU
Enlargement", H. Grabbe, Centre for European
Reform, June 2001.)
Utku Utkulu&Aydın Arı
A recent study of the Commission estimates that
enlargement could increase the growth of GDP of the
acceding countries by between 1.3 and 2.1 percentage
points annually, and for the existing members it could
increase the level of GDP by 0.7 percentage point on a
cumulative basis. ("The Economic Impact of
Enlargement", a study by the Directorate General for
Economic and Financial Affairs, May 2001)
Utku Utkulu&Aydın Arı
Concerning the budgetary consequences of
enlargement, the framework has already been
decided by the European Council in Berlin, and
includes a modest amount (less than 10%) for
transfers to the Central and East European
countries for the period up to 2006. In the
longer term, after 2006, expenditure will
depend on a series of decisions to be taken in
the fields of cohesion policy, agricultural policy,
etc. The increase in the budget resulting from
enlargement will be a political rather than an
economic issue.
Utku Utkulu&Aydın Arı
There have been several analyses of the impact
of enlargement on the labour market and
migratory flows. One of them suggested that
only about 335,000 people would move to the
EU-15 countries from Central and Eastern
Europe even if there were free movement of
workers immediately on accession. In fact, the
Union has now agreed on a flexible transition
period of up to seven years for limiting the
inflow of workers from new member states.
Utku Utkulu&Aydın Arı
Costs of non-enlargement
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Non-enlargement, or a delay in enlargement, would have
costs both for the Union and for the applicant countries:
Delay in enlarging the single market, and lower economic
growth in the applicant countries, would deprive member
states of economic benefits.
For the applicant countries failure to join the Union would
weaken the incentive for economic reform, discourage
foreign investment and reduce economic growth.
It could thus create political instability in Europe, and
even undermine the process of democratisation, with
potential repercussions for the Union.
Without enlargement, the Union would be less able to
combat the problems of organised crime, illegal
immigration and terrorism.
Utku Utkulu&Aydın Arı
The EU-Turkey: A Brief History
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31 July 1959 application for membership of the
Community
12 September 1963 Ankara Agreement, which
came into force on 1 December 1964. The
cornerstone of this agreement is the
establishment of a customs union in three
stages. A Financial Protocol accompanied this
agreement.
A second and third Financial Protocol were
signed in 1970 and 1977 respectively. The
Ankara Agreement also set up an Association
Council that meets regularly and discusses the
work of the association.
Utku Utkulu&Aydın Arı
www
The EU-Turkey: A Brief History
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On 14 April 1987 Turkey presented its application
for membership of the Community. The
Commission adopted its opinion on the application
on 18 December 1989.
On 6 March 1995 the EC-Turkey Association
Council decided to move onto the final stage of
the customs union and resume financial
cooperation.
On 13 December 1995 Parliament gave its assent
to the customs union.
The Decision on the final phase of customs union
came into force on 31 December 1995; on the
institutional front, it set up a consultation body,
the Customs Union Joint Committee.
Utku Utkulu&Aydın Arı
Developments in the enlargement process
The Luxembourg European Council of December
1997 confirmed "Turkey's eligibility for accession to
the European Union".As requested by the
Luxembourg European Council, the Commission
adopted on 4 March 1998 the initial operational
proposals of the "European Strategy for Turkey“.
The European Council in Helsinki (December 1999)
welcomed "recent positive developments in Turkey, as
well as its intention to continue its reform towards
complying with the Copenhagen criteria. Turkey is a
candidate State on the basis of the same criteria as
applied to the other candidate States.“
Utku Utkulu&Aydın Arı
Developments in the enlargement process
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The Accession Partnership was formally adopted
by the EU Council on 8 March 2001, is a roadmap
of the priorities for Turkey in making progress
towards meeting all the criteria for accession to
the EU.
On the basis of this Accession Partnership Turkish
Government has adopted on 19 March 2001 its
National Programme for the Adoption of the
Acquis. (NPAA) The programme provides a wideranging agenda of political and economic reform.
Utku Utkulu&Aydın Arı
The Gothenburg European Council
June 2001
regarded the National Programme as a "welcome
development" and "urged Turkey” at the same time to
take concrete measures to implement the priorities of the
Accession Partnership, which is the cornerstone of the
pre-accession strategy. The decisions in Helsinki have
brought Turkey closer to the EU and opened up new
prospects for her European aspirations. However, "in a
number of areas such as human rights, further progress
is needed.” “The Council is invited to adopt the single
financial framework for pre-accession assistance to
Turkey by the end of the year at the latest. The economic
programme agreed with the IMF must be vigorously
implemented to create the conditions for economic
recovery.”
Utku Utkulu&Aydın Arı
The Laeken Council
December 2001
adopted a regulation on pre-accession financial
assistance to Turkey. This new regulatory framework
ensures an accession driven approach of EC's
financial co-operation with Turkey.
Turkey has made progress towards complying with the
political criteria established for accession, in
particular through the recent amendment of its
constitution. This has brought forward the prospect
of the opening of accession negotiations with Turkey.
Turkey is encouraged to continue its progress
towards complying with both economic and political
criteria, notably with regard to human rights. The
pre-accession strategy for Turkey should mark a new
stage in analysing its preparedness for alignment on
the acquis.
Utku Utkulu&Aydın Arı
The Seville European Council
June 2002
The European Council welcomes the reforms recently
adopted in Turkey. It encourages and fully supports
the efforts made by Turkey to fulfil the priorities
defined in its Accession Partnership. The
implementation of the required political and economic
reforms will bring forward Turkey’s prospects of
accession in accordance with the same principles and
criteria as are applied to the other candidate
countries. New decisions could be taken in
Copenhagen on the next stage of Turkey’s candidature
in the light of developments in the situation between
the Seville and Copenhagen European Councils, on
the basis of the regular report to be submitted by the
Commission in October 2002 and in accordance with
the Helsinki and Laeken conclusions.
Utku Utkulu&Aydın Arı
The Copenhagen Council
December 2002


The Union declared
welcome
10 States as
members from
1 May 2004:








Utku Utkulu&Aydın Arı
Cyprus,
the Czech Republic,
Estonia,
Hungary,
Latvia,
Lithuania,
Malta,
Poland,
the Slovak Republic
Slovenia.
The Copenhagen Council on Turkey:



recalls its decision in 1999 in Helsinki that Turkey is a
candidate state destined to join the Union on the basis of
the same criteria as applied to the other candidate
states.
strongly welcomes the important steps taken by Turkey
towards meeting the Copenhagen criteria, in particular
through the recent legislative packages and the
subsequent implementation measures which cover a
large number of key priorities specified in the Accession
Partnership.
acknowledges the determination of the new Turkish
government to take further steps on the path of reform
and urges in particular the government to address swiftly
all remaining shortcomings in the field of the political
criteria, not only with regard to legislation but also in
particular with regard to implementation.
Utku Utkulu&Aydın Arı
The Copenhagen Council on Turkey:



recalls that, according to the Copenhagen political criteria,
membership requires that a candidate country has achieved
stability of institutions guaranteeing democracy, the rule of law,
human rights and respect for and protection of minorities.
encourages Turkey to pursue energetically its reform process. If
the European Council in December 2004, on the basis of a
report and a recommendation from the Commission, decides
that Turkey fulfils the Copenhagen political criteria, the
European Union will open accession negotiations with Turkey
without delay.
In order to assist Turkey towards EU membership, the
accession strategy for Turkey shall be strengthened. The
Commission is invited to submit a proposal for a revised
Accession Partnership and to intensify the process of legislative
scrutiny. In parallel, the EC-Turkey Customs Union should be
extended and deepened. The Union will significantly increase its
pre-accession financial assistance for Turkey. This assistance
will from 2004 be financed under the budget heading "preaccession expenditure".
Utku Utkulu&Aydın Arı
THESSALONIKI COUNCIL
JUNE 2003




welcomes the commitment of the Turkish government to carry
forward the reform process, in particular the remaining
legislative work by the end of 2003,
supports its on-going efforts made in order to fulfil the
Copenhagen political criteria for opening accession negotiations
with the Union.
adopted recently a revised Accession Partnership, which sets out
the priorities that Turkey should pursue, supported by
substantially increased pre-accession financial assistance. In
accordance with the Helsinki conclusions, fulfilment of these
priorities will assist Turkey towards EU membership.
The Accession Partnership constitutes the cornerstone of EUTurkey relations, in particular in view of the decision to be taken
by the European Council in December 2004.
Utku Utkulu&Aydın Arı
EU - Turkey: Glossary

Pre-accession strategy: a framework of activity
which usually combines priority setting, technical
and financial assistance, and preparation of the
negotiations through 'screening'. It helps the
candidate countries to prepare for their future
membership by aligning with the Union's acquis
before accession. It centres on the Accession
Partnerships, the Europe Agreements (in the
case of applicants with such agreements) and
participation in Community programmes and
agencies. To date the strategy followed with
Turkey has been a specific one, reflecting the
particular situation of that country.
Utku Utkulu&Aydın Arı
EU - Turkey: Glossary

Accession Partnership (AP): a text drawn up by
the EU in consultation with the candidate
country, which sets out the key short and
medium term priorities to be met in order to
prepare for membership. It indicates the
financial assistance available from the EU in
support of these priorities. (A conditionality
clause, not as yet invoked, refers to the
implications for financial assistance in case of
insufficient progress towards meeting the
Copenhagen criteria or failure to meet Europe
Agreement obligations).
Utku Utkulu&Aydın Arı
EU - Turkey: Glossary

National programme for the adoption of the
acquis (NPAA) is an comprehensive multiannual operational plan, drawn up by the
candidate country, (often with technical
assistance from the EU) which indicates the
timetable foreseen for the implementation of
the 'acquis' and other accession priorities, the
institutional implications regarding enforcement
of the 'acquis' and the financial implications.
(An assessment of each programme is included
in the corresponding regular report.)
Utku Utkulu&Aydın Arı
EU - Turkey: Glossary

Europe Agreements, concluded with the ten
East European candidates, set out legal
obligations, notably on trade, competition,
public procurement etc and provide for
institutional dialogue and monitoring. They are
a key element of the pre-accession strategy. A
new structure of sub-committees focused on
accession priorities was agreed with the
candidate countries, in order to facilitate closer
monitoring. A similar role in the case of Turkey
is played by the Customs Union Agreement.
Utku Utkulu&Aydın Arı
EU-Turkey: Present Day
The decision on the candidate status of Turkey in
Helsinki in 1999 has encouraged Turkey to
introduce a series of fundamental reforms.
In order to reach membership to the EU, Turkey
has to fulfil some obligations as cited in her
National Programme.
Utku Utkulu&Aydın Arı
Maastricht Convergence criteria:
The EU members and Turkey
Enflasyon oranı
1998
Almanya
0,6
Fransa
0,7
İtalya
2
İspanya
1,8
Hollanda
1,8
Belçika
0,9
Avusturya
0,8
Lüksemburg
1
Finlandiya
1,4
Portekiz
2,2
İrlanda
2,1
EURO Alanı
1,2
Danimarka
1,3
İngiltere
1,5
İsveç
1
Yunanistan
4,5
AB 15
1,3
Türkiye
69,7
En iyi üç
0,7
Referans
2,2
1999
0,6
0,6
1,7
2,2
2
1,1
0,5
1
1,3
2,2
2,5
1,1
2,1
1,3
0,6
2,3
1,2
64,9
0,6
2,4
Bütçe Açığı/GSYİH
2000
1998
1999
1,2
-2,1
-1,6
1,1
-2,9
-2,1
1,8
-2,7
-2,2
2,2
-1,8
-1,4
2,2
-0,9
-1,3
1,2
-1,3
-1
1,1
-2,1
-2,2
1,2
2,1
2,2
1,9
1,4
3,5
2,5
-1,5
-1,3
2,5
2,3
2,9
1,5
-2
-1,6
2,2
0,9
3
1,5
0,2
-0,6
1,5
2,3
1,9
1,9
-2,4
-1,9
1,5
-1,5
-1
39
-7,2
-10,6
1,1
2,6
-3
-3
Devlet Borçları/GSYİH
2000
1998
1999
-1,2
61,1
61,8
-1,7
58,8
59,4
-1,7
118,7
117,5
-0,8
65,1
64
-1
67,5
65,2
-0,7
118,2
116,3
-2,6
63
63,2
2,1
6,9
7,1
4,1
49,7
43,2
-1,2
57,8
56,1
3,1
49,5
47
-1,2
73,5
73,1
2,6
58
54,8
-1,2
48,7
46,1
2,2
74,2
69,5
-1,6
106,3
104,5
-0,6
69,6
68,6
-11,5
43
75
-3
60
60
Uzun dönem faiz
2000
1998
1999
61,3
4,6
5
59
4,7
5,1
114,7
4,9
5,2
62
4,8
5,2
61,6
4,7
5,1
112,9
4,8
5,2
63,2
4,3
5,3
7,2
38,3
4,8
5,2
54,6
4,9
5,4
39,3
4,8
5,3
71,5
4,6
5
51,2
4,9
5,4
42,1
5,5
5,2
61,7
5
5,6
103
8
6,5
66,3
5
5,3
80
115,5
109,5
60
2000
6
6,1
6,2
6,2
6,1
6,2
6,1
6,2
6,3
6,2
6,1
6,2
6,4
6,3
6,4
6,2
39,3
Utku Utkulu&Aydın Arı
TÜRKİYE
birim
1996
1997
1998
1999
2000
%
7,0
7,5
3,1
-4,7
7,2
-6,1
Yıllık ortalama
%
80,4
85,7
84,6
64,9
54,6
54.4
Aralık ayı1
%
79,8
99,1
69,7
68,8
39,0
68,5
%
6,7
6,5
6,8
7,6
6,6
6,9
Haziran
Bütçe dengesi
GSYİH oranı
-8,4
-13,4
-11,9
-21,8
-11,0
-29,7
oc-eylül
Cari işlemler dengesi
GSYİH oranı
-1,4
-1,4
1,0
-0,7
-4,9
0,8
Oc-hz
Cari işlemler dengesi
Milyon euro
-1945
-2333
1766
-1276
-10574
288
Oc-kası
%
171,2
155,9
156,1
199,6
210,2
Milyon euro
52797
64308
67583
80196
108865
135935
Oc-eylü
GSYİH oranı
0,4
0,4
0,5
0,4
0,5
2,6
Oc-hz
m.euro
576
712
837
735
1063
1874
Oc-hz
Reel GSYİH büyümesi
2001 en son veri
Oc-eylül
Enflasyon Oranı (TÜFE)
Yıl sonu işsizlik oranı (ILO tanımı)
Dış borç
borç/ihracat oranı
brüt dış borç
Doğrudan yabancı yatırımlar
ödemeler dengesi
Utku Utkulu&Aydın Arı
Macroeconomic Developments
in 2002







GDP and GNP increased by 7.8 %.
The unemployment rate increased from 8.4 % in 2001
to 10.3 % in 2002.
CPI increased by 30.8 % and the WPI increased by 29.7
%. In respect of 2001, CPI and WPI declined by 57.8 %
and 38.8 %, respectively.
Imports (CIF) are 50.8 billion US Dollars. Exports (FOB),
reached 35.1 billion US Dollars. Accordingly, the foreign
trade deficit reached 8.6 billion US Dollars.
The share of EU countries in total exports maintained
the same level – 51.5 % - as in the previous year and
the amount of exports to EU countries reached 18.1
billion US Dollars.
The share of EU countries in total imports increased to
45.5 % (23.1 billion US Dollars).
The current account deficit is 1.8 billion US Dollars.
Macroeconomic Developments
in 2002






Total foreign debt reached 131.6 billion US Dollars.
The ratio of the total foreign debt to GDP reached
71.7 %.
The ratio of consolidated budget deficit to GDP
reached 14.5 %.
The ratio of PSBR to GDP decreased by 3.9 points
with respect to the previous year and reach 12.4 %.
The ratio of domestic debt stock to GDP declined
from 68.5 % in 2001 to 54.3 % in 2002.
Although the average tender and public offer interest
rate in cash borrowings was 99% on a compound
basis in 2001, it decreased to 57.2 % in 2002.
In addition, the average maturity period for
borrowings was extended from 4.8 months to 9
months in 2002.
National Programme for the
Adoption of the Acquis


Turkey adopted the National Programme for
the Adoption of the European Union
Acquis in March 24, 2001.
The revised version of the "National
Programme for the Adoption of the Acquis" and
the "Decision on the Implementation and
Coordination and Monitoring of the NPAA" is
published in the Official Gazette dated 24 July
2003, No. 25178bis.
www
Utku Utkulu&Aydın Arı
Political Criteria
1- Freedom of Thought and Expression
2- Freedom of Association, Right to Peaceful
Assembly, and Civil Society
3- Prevention of Torture and Maltreatment
4- Human Rights Training of Public Officials
5- Functioning and Efficiency of the Judiciary
6- Prison, Detention and Custody Standards
7- Full Enjoyment of All Fundamental Rights and
Freedoms by All Individuals without
Discrimination
8- Functioning of the Executive
9- Agreements
Utku Utkulu&Aydın Arı
Economic criteria



Fulfilment of the Copenhagen criteria and
convergence with the Maastricht criteria are the
main perspectives of economic policy during the
accession period.
Strengthening the market economy and improving
the competitiveness of the economy are priority
targets.
Within this framework, special emphasis will be
given to reducing the role of the public sector
through privatisation, transferring the regulatory role
of state to independent regulatory bodies,
strengthening the private enterprise system, and
removing the legislative obstacles and economic
uncertainties which adversely affect the operation of
the free market economy.
Economic criteria



Therefore, measures for improvement of the
investment environment both in the legislative
and economic sense, full liberalisation of the
free movement of capital, and promotion of
foreign investments will be maintained.
Moreover, financial sector reform, the efforts to
increase the competitiveness of the sectors
under state monopoly and implementation of
the privatisation programme will also continue.
Another essential objective of economic policy
is the reduction of disparities between Turkey
and the EU.
Some important web sites
European Union official web sites:
http://europa.eu.int/index_en.htm
Representation of the European Commission to Turkey:
http://www.deltur.cec.eu.int/main-t.html
Ministry of Foreign Affairs:
http://www.mfa.gov.tr/
Economic Development Foundation:
http://www.ikv.org.tr/
Bilgi University European Documentation Centre:
http://library.bilgi.edu.tr/screens/edc.html
Secretariat General for the EU Affairs
www.abgs.gov.tr
Central Bank of the Republic of the Turkey:
http://www.tcmb.gov.tr
Interactive map of Europe
http://europa.eu.int/abc/maps/index_en.htm
Utku Utkulu&Aydın Arı