Tag: Turkey – EU

Can Turkey Become ‘the China of Europe’?

Turkey’s ambitions to be among the top ten global economies by 2023 could mean that the rising star of the emerging market economies becomes “the China of Europe”, according to an economist and a prominent Turkish business woman.

Turkey’s economy was the fastest growing in Europe in 2011, growing 8.5 percent (the second fastest after China among major emerging market economies). But in 2012 Turkey, like China, experienced a slump in growth as the global economic slowdown adversely affected its exports and capital inflows.

After what has been seen as a “soft landing” for Turkey, growth is seen picking up in 2013 with the latest HSBC manufacturing PMI reaching a 14-month high in December as new orders and exports rebounded.

(Read More: A Decade-Long Ascent to Economic Power)

Indeed, while most of Europe struggles to achieve 1 percent growth, Turkey is expected to have 3.5 percent growth in 2013, the IMF said in recent forecasts.

But that’s not enough if Turkey wants to fulfil its economic ambitions, Guler Sabanci, chairman of Sabanci Holdings, one of the largest industrial and financial conglomerates in Turkey, told CNBC.

“Turkey needs minimum 6 percent growth,” the member of one of Turkey’s most prominent industrial dynasties, told CNBC Europe’s “Squawk Box.”

“We have these 2023 targets where we would like to be among the top ten economies in the world. In order to reach those targets we have to catch 6 percent average growth in the medium to long-term,” she said.

Lofty Goals?

The “2023 Vision” is the name of a series of goals that Turkish prime minister Recep Tayyip Erdogan envisages for his country in ten years, with ongoing economic, social and infrastructure improvements making up the Republic’s aims.

By 2023, Turkey aims to achieve a gross domestic product of $2 trillion from $775 billion in 2012. It also hopes to make social improvements to achieve a per capita income of $25,000 by 2023 and reduce unemployment to 5 percent.

In 2012, the per capita income was $10,524 and unemployment was 9.8 percent, according to the World Bank.

Turkey also hopes to have 30 million people in the workforce by 2023 from 22.3 million currently.

“There is a lot of room for growth,” Sabanci told CNBC. “2013 is an important year for Turkey, we’re having serious infrastructure investments and logistic investments, there are serious opportunities,” she added.

Turkey Must Concentrate

“It’s a domestic consumption story, but it does need to move on,” emerging market economist at Nomura, Peter Attard Montalto, told CNBC. “Like all emerging markets, that next progression is towards taking the wealth, building the infrastructure and continuing to progress. I think Turkey is at that point.”

Apart from the country’s economic ambitions, Turkey has also been compared with China because of the rise of demand for mobile technology, e-commerce and communications.

“It has a very big attraction among the young generation, all the internet and cellphone usage numbers are high,” Sabanci told CNBC.

(Read More: Big Opportunities in Turkey’s Digital Market)

As the gateway between Asia and Europe, domestic consumption and consumer trends in the secularised but nominally Muslim country have been increasingly influenced by its western neighbors over recent years.

Take for example the traditional Turkish alcoholic drink called Raki. Consumption of the national drink has fallen 50 percent in the last 13 years as consumers have diversified to Western alcoholic beverages. That’s been a huge opportunity for global brands, such as Unilever and Diageo (which acquired Turkey’s leading spirits company Mey Icki in 2011).

Turkey’s Journey to Europe

Turkey has been seeking membership to the European Union (EU) in the face of some tough opposition within Europe.

Sabanci said Turkey’s “journey to Europe” has been a 50-year one and accession discussions must continue. After becoming an associate member of the European Economic Community in 1963, Turkey has enjoyed good trade relations with its continental neighbor, Europe.

Talks over the country’s accession to the EU began in 2005 on the condition that Turkey embark on a series of economic and political reforms and a normalization of trade relations with Cyprus, which it has done.

However, talks were stymied by then-French president Nikolas Sarkozy who objected to Turkey becoming a full member or Europe, offering a “special partnership” instead.

Turkey refused the offer but has since gone through a rapprochement with the EU and has started negotiations again.

via Can Turkey Become ‘the China of Europe’?.

January 21, 2013
EU-Turkey talks ‘appalling’ amid Cyprus occupation

EU-Turkey talks ‘appalling’ amid Cyprus occupation

by Andrew Brons

It is appalling that the EU has even entered entry negotiations with a country,Turkey, whose army still occupies part of one of the bloc’s current member states, writes MEP

Is it consistent for me, as a person who does not want his own country to remain a member of the European Union, to care about which countries join it? Well, a new country’s citizens will eventually, if not immediately, have the right to move freely throughout the EU including to Britain.

While I would prefer it if the United Kingdom were not a member, I have no say at all in whether or not our membership should continue. Furthermore, if it must continue, I should prefer my country to be an involuntary member of an international organisation that is more European than of an international organisation that is less European. Turkey’s people are not European by ancestry, culture or religion and not very European by geography.

Quite apart from Turkey’s ancestry, culture, religion and geography, the behaviour of its army is not exactly what we might expect. It remains in illegal occupation of a sovereign state, Cyprus, that happens to be a member of the EU. However, far worse than the mere fact of its 39 years of occupation, have been the atrocities that it has committed following the invasion and during its occupation.

According to the secret report of the European Commission of Human Rights in 1974 alone, seven articles of the European Convention on Human Rights were broken. There were murders, rapes, looting, executions of men, women and children, forced labour, torture, forced expulsions, and imprisonment in concentration camps. The report said that the object “was to eradicate the Greek population” and that the atrocities were because of their “ethnic origin, race and religion”.

It said that there were 3,000 people missing at the time of the report. While the main atrocities were committed nearly four decades ago, Turkey has allowed subsequent desecration of sacred and ancestral Greek Cypriot property, including churches and graveyards and allowed the sale of the spoils of this looting on international markets.

Turkey does not have a record for atoning for past wrongs. It has prosecuted the Turkish author Orhan Pamuk for describing the killing of Armenians in 1915 as genocide. The fact the Turkish law is mirrored by an equally insane French law that makes it an offence to claim that the 1915 killings were not genocide, does not excuse Turkey. It simply makes France equally contemptible. Meanwhile Turkey has made no attempt to return the property belonging to Greek Cypriots or even to offer them compensation.

One does not have to be a supporter of the EU to find it appalling that the bloc has been negotiating with Turkey about its possible membership, when its army is still in occupation of part of a member state. The Cypriot government was remarkably restrained during the six months of its presidency of the Council of the EU last year but the Turkish government refused to have any dealings with it during that period. Should it be possible for a candidate country to be a continuing aggressor against an existing member?

Andrew Brons is a British non-attached member of the European Parliament

via EU-Turkey talks ‘appalling’ amid Cyprus occupation – Public Service Europe.

January 17, 2013
How Istanbul, Izmir, Gaziantep and business are integrating Turkey into the EU

How Istanbul, Izmir, Gaziantep and business are integrating Turkey into the EU

January 15, 2013

A crowd of dynamic entrepreneurial types gathers in an Istanbul hotel. Outside, in the crowded streets, deals are being made, goods bought and sold, and a metropolitan economy larger than many entire EU member states is growing strongly.

Inside, the business people are learning how the EU works, focusing on practical details such as double taxation, fund-raising and visa liberalisation.

I’m at the “Young Businessmen on the EU Path” project opening ceremony in Istanbul, alongside distinguished colleagues from the Turkish side including Turkish Europe Minister Egemen Bağış.

The aim of the event is to help business people understand how the EU works. The Turkish private sector is large and powerful and keen to work with customers and other businesses within the European Union. Ensuring that they are as well-equipped as possible with the skills needed to thrive there is a win-win for everyone.

The event reminds me of the recent piece in the Guardian by Egeman Bağış. In it he argued that Turkey’s integration with the EU was constantly proceeding, driven by day-to-day contacts between people, businesses and cities – such as recent cultural, business and sustainability projects between Istanbul and Cologne, Barcelona and Copenhagen.

I’m a big fan of this argument: indeed, not only the dynamic mega-city of Istanbul but also people and businesses in smaller cities in which the UK-funded project will be holding meetings later this year such as Izmir and Gaziantep, are driving the integration process.

If that brings about new commercial opportunities between Turkey, the UK and other member states and creates wealth all round, so much the better.

Tags: business, European Union

Leigh Turner

via How Istanbul, Izmir, Gaziantep and business are integrating Turkey into the EU – Leigh Turner.

January 17, 2013
What next for Turkey’s application to join the European project?

PAMELA NEWENHAM

Turkey will be glad to see the end of the Cypriot EU presidency. As Ireland assumes the rotating presidency in January, there are expectations it will create an opportunity to open a new page in Turkey-EU relations.

Turkish EU affairs minister Egemen Bagis says Ireland’s EU presidency will be an historic turning point in regard to Turkey-EU relations. He is hopeful Turkey’s bid to join the European Union will accelerate during the presidency in the first half of next year.

The country first submitted an application for full membership of the European Union in 1987, having had ambitions that date back to 1959. It has been negotiating for membership ever since.

Many Turks believe that Europe is missing out on a fast-growing economy that could give the EU a much-needed boost.

According to the latest figures from the International Monetary Fund, Turkey is the 18th-largest economy in the world based on gross domestic product.

But after decades of courtship, the country unsurprisingly no longer maintains the enthusiasm it once had for EU membership and, while it’s not quite ready to throw in the towel, many businesses seem indifferent to the delays.

But what would EU membership mean for business?

While accession to the EU would bring many benefits, including much-desired corporate governance, for the hundreds of Turkish and foreign businesses that operate in the country’s free zones, it would mean an end to 0 per cent corporation tax.

Companies operating in and people working in free zones are exempt from corporate and income taxes until the end of the taxation period of the year Turkey becomes a full member of the European Union.

The country first introduced free zones, which are considered outside the customs zones, in 1987.

Companies operating within the zones are exempt from corporate tax if they export 85 per cent of what they produce. The lack of corporate and income taxes mean free zones break EU rules.

Furthermore, companies operating in the free zones are exempt from paying customs duties on goods, machinery and equipment brought into the zones, and can buy Turkish products VAT-free.

Europe does not have the same economic interest for Turkey that it had a few years ago, according to Ünal Kocaman, a board member at ESIAD (Aegean Industrialists and Businessmen’s Association).

“If we were in, we would have the problem of the euro,” said Mr Kocaman. “Even the EU is questioning its future. We will not speed up the process because we do not know what will happen to Europe.”

A custom union agreement in place between Turkey and the EU means goods from Turkey are already in free circulation in the EU.

So membership might not necessarily bring huge additional trade benefits.

Until recently the EU was the final destination for 52 per cent of all Turkish exports, according to Minister of Finance Mehmet Simsek. This has fallen to 38 per cent since the onset of the European crisis.

The free zones have attracted many foreign companies to Turkey, contributing to a lower unemployment rate in the country than in Ireland and the EU. There are more than 20 free zones in Turkey, employing tens of thousands of people.

The thriving economy has led to high inflation, which for a long time was in double digits, according to Mr Simsek.

“Inflation was always in double digits. We’ve managed to bring it down to single digits but high single digits. It’s currently between 8 and 9 per cent,” he said.

However, while Europe may not still hold the same interest for Turkey as it used to, the country still looks to it especially with regard to corporate governance, according to Mr Simsek.

“In terms of rules and regulations we are looking to London, Europe and the rest of the world to see how we can improve legislative background to financial services.”

Following on from the crisis in Europe, the Turkish government has adopted a comprehensive programme of measures to prevent overheating of the economy, which was growing 17 per cent year-on-year in real terms, Mr Simsek said.

As a result, the country tightened its credit policy and introduced tax hikes.

“We are in a crisis-prevention stage, so our job is relatively easier than Europe and other countries that are in crisis management or crisis resolution stages,” said Erdem Basci, the governor of the Central Bank.

via What next for Turkey’s application to join the European project? – The Irish Times – Sat, Dec 29, 2012.

January 4, 2013
This week’s big questions: Should Turkey join the EU? Should the UK have a referendum on leaving it?

How worried should we be about the straining of US-Russia relations?

I don’t think so. Russia has made enormous strides under Putin; she no longer has to run an empire, and like all ex-imperial powers is richer as a result. There is an educated middle class at last, and Russia’s voice has often been the sane one in international affairs: without it, we would have another Iraq in Syria and probably Lebanon. There are bound to be collisions of interest between Russia and the US, but they are not the end of the world.

Should there be a referendum on Britain’s membership of the EU?

We have been promised a referendum and we should have one. Europe unquestionably does good things, such as competition policy, but the centralisation now promised for the eurozone does not fit British practice, and the political arrangements are near farcical. If a big No vote resulted, it could be good for Europe, in the sense that its well-known bullying, corruption and incompetence could be ended by the threat of British departure.

Should Turkey join the EU?

If Europe were just what it was supposed to be when the Turks became associated, in 1963, Turkish membership of course makes sense. It is a large and growing market, the only preponderantly young population in Europe, many of them well trained. The effort to match conditions for joining Europe has also been beneficial in prising open sleepy monopolies and making the country more open to foreign investment. Prosperity has obviously been increasing. But with the ever-closer union Europe that we now have, the Turks are simply opening themselves to ridiculous rebuff, being told that they have to wait because of some pimple like Greek Cyprus.

The real problem has been the absurd EU visa regime, in which professional-class Turks are humiliated, filling in huge forms for a three-day visit, as if they were drug smugglers, etc. The Americans give a 10-year visa in a day. I was absurdly told “we have to treat everyone the same”. Why on earth? Maybe the answer is that if the Turks really want EU membership, they can take ours.

Should the West intervene in Syria?

The Syrian business is a mess, and surely the examples of Iraq and Afghanistan should have told us (and the Turkish government) just not to get involved. Unlike the other two, Syria is well supported by the Russians, who have solid interests, and the Assad government, whatever its sins, is based on secular principles. Alawite girls used to go round the strict Muslim parts just ripping the wretched black face-cloths-with-eye-slits from the put-upon women. If Syria (and Lebanon, again) explodes, the whole peace settlement of 1920 (A Peace to End All Peace, in the title of David Fromkin’s famous book) is reopened, which might include the matter of Israel. A disaster, and the West must back off.

Is an independent Scotland either viable or desirable?

I remember the words of a Polish count, speaking to the German ambassador in Vienna in 1918: “If Poland could become independent again, I’d give half of my worldly goods. With the other half, I’d emigrate.” Scottish independence is a grotesque idea, not worth discussing. If it does come about, there will be a stampede among Scots for English passports – most of us anyway have close family there – and, in my case, for a Turkish one. Norman Tebbitt had the right answer to that (as so often) when he said the union matters much more, even if the price is a Labour government from time to time.

Does the record of the Coalition show it to be a progressive innovation in UK politics?

I think the Liberals (I always think of them as such) are really more comfortable with a Labour alliance, whereas in present circumstances their role is to save David Cameron from his own supporters. The Coalition has not done too badly, given the circumstances, but it is not a long-term answer.

Is gay marriage a worthy cause for David Cameron to champion against the wishes of much of his party?

Marriage, with children, obviously deserves every support the state can give, and we haven’t needed the elaborate sociological researches of the past generation to show that children thrive if brought up in such circumstances. I can see that people involved in a civil partnership should be able to pass on property, etc, without death duties, but let us not confuse that with marriage.

Does the British press require statutory regulation?

I wondered about this, but have been swayed on the subject by Dominic Lawson (and others). If the present law were properly operated, and if libel actions could be made much cheaper, statutory intervention would not be necessary.

Norman Stone is professor of international relations at Bilkent University, Ankara. He is a former Oxford professor of modern history and advised Margaret Thatcher on foreign affairs during her premiership. His latest book, World War Two: A Short History will be published next month.

via This week’s big questions: Should Turkey join the EU? Should the UK have a referendum on leaving it? – Comment – Voices – The Independent.

January 4, 2013
Turkey accuses EU of bigotry

Turkey accused the European Union of bias and bigoted attitudes towards the EU candidate country on Monday and blamed it for undermining the Turkish public’s trust in the bloc.

Turkey criticised the European Commission’s latest report on its progress towards EU membership as it presented for the first time its own report highlighting its reforms over the last year.

Turkey began accession talks in 2005 but the process has ground to a halt due to an intractable dispute over Cyprus, the divided island state which Turkey does not recognise, and opposition from core EU members France and Germany.

Despite waning domestic support for joining the EU, Ankara has continued to push for full membership of the union and has said it wants to join before 2023, the centenary of the founding of the Republic of Turkey.

“We observed that this year’s Turkey Progress Report was overshadowed by more subjective, biased, unwarranted and bigoted attitudes,” Turkey’s EU Affairs Minister Egemen Bagis said in a statement accompanying Turkey’s own 270-page report.

Bagis said it was unacceptable that the European Commission report released in October had ignored Turkey’s “courageous” reforms over the last year and that this undermined the EU’s trustworthiness in the eyes of the Turkish public.

The minister previously voiced his disappointment with the report in October, saying it failed to be objective, ignored the expansion of rights for religious minorities and had criticised the judiciary too sweepingly.

A recent survey by the German Marshall Fund think-tank found a majority of Turks view the EU negatively, illustrating the declining enthusiasm for EU membership.

Ankara has completed only one of the 35 policy “chapters” every candidate must conclude to join the EU. All but 13 of those chapters are blocked by France, Cyprus and the European Commission.

Talks have also been blocked by the Commission which says Turkey does not yet meet required standards on human rights, freedom of speech and religion.

“Today there is no government in Europe which is more reformist than our government,” Bagis said.

“While EU countries are struggling in crisis, our country is experiencing the most democratic, prosperous, modern and transparent period in its history,” he said.

“The ‘sick man’ of yesterday has got up and summoned the strength to prescribe medication for today’s Europe … and to share the EU’s burden rather than being a burden to it,” he said.

The progress report prepared by Turkey, released on the website of its EU Affairs Ministry, cited the passage of reforms in the areas of the judiciary, education and workers rights as examples of progress over the year.

Bagis told Reuters in Dublin earlier this month Turkey was hopeful France will unblock talks over EU membership on at least two policy chapters in the coming months ahead of a visit by President Francois Hollande.

While Hollande has stopped short of endorsing Turkey’s EU candidacy, he has said it should be judged on political and economic criteria – a contrast to his predecessor Nicolas Sarkozy’s position that Turkey did not form part of Europe.

German Foreign Minister Guido Westerwelle said on Dec. 21 the current standstill in negotiations over Turkey’s membership bid was unsatisfactory and the new year offered an opportunity to tackle outstanding issues with renewed vigour.

EurActiv.com with Reuters

via Turkey accuses EU of bigotry | EurActiv.

January 3, 2013