The economics of Turkish accession

Countries that want to join the EU need to comply with four accession criteria: One is political, one is related to EU law and two concern economics. Turkey has already made much headway with fulfilling the EU’s criteria on democracy, the rule of law and minority rights. Although the EU will continue to watch Turkish politics closely, the main focus of the accession negotiations – scheduled to start in October 2005 – will be on economics, writes Katinka Barysch, chief economist at the Centre for European Reform.

• Many West Europeans fear that the accession of Turkey – poor, populous and often unstable – will harm the EU economy. But Turkey’s economy is tiny compared with that of the EU-25. And what little economic impact Turkey’s EU entry will have is likely to be positive. 
• Turkey already has a custom union with the EU, and in many ways it is better prepared than the Central and East Europeans were when they started accession talks. But Turkey’s accession process will be more difficult to manage than that of the East European countries. Turkey’s large pile of debt leaves it unusually vulnerable to swings in investor confidence. Moreover, Ankara will not be able to use EU accession as an anchor for economic reform in the way the East Europeans did. 
• Turkish workers will not gain the right to apply for jobs in other EU countries until after 2020. By then, many West European countries may well be wooing Turkish workers to help them compensate for the ageing of their own workforces. 
• Eastward enlargement is already forcing the EU to change in a way that will, eventually, make it easier for Turkey to join. By then, the EU will hopefully have more efficient institutions and decision-making procedures. And it will have sorted out its labour market problems. If not, the EU of 2015 or 2020 will be slow-growing, gridlocked and unwelcoming. Turkey would not want to join such a club. 

To read the article in full, visit the Centre for European Reform website.