Title

Turkey and the EU Budget: Prospects and Issues 

Authors

Kemal Derviş, Daniel Gros, Faik Öztrak and Yusuf Işık, in cooperation with Fırat Bayar 

Series

EU-Turkey Working Papers 

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Notes

When calculating the cost of Turkish membership for the incumbent members, one must appreciate that this process is highly speculative. Not only Turkey, but also the EU are evolving and changing constantly. In addition, one cannot know with certainty what the rules concerning the budget will be by the time of accession. Nevertheless, there are ways to – at least to some extent– to calculate the cost that Turkey as a fully integrated EU member would represent to the budget. The first possibility is to calculate what Turkey would receive under the Common Agricultural Policy and the Structural Funds, as a full member today. The second approach would be to calculate what the EU would have to pay by a likely accession date such as 2015, under current rules. In this context, one should not ignore transitional arrangements such as PHARE and other pre-accession programmes that Romania and Bulgaria already benefit from. Although we are aware of the fact that the elaborated numbers may be altered, one may say that net transfers would have a significant impact in Turkey, while being a manageable amount for the EU budget.  

DatePublished

August 2004 

Web (kaynak)

www.ceps.be (6.9.2004)

Title

Relative Income Growth and Convergence 

Authors

Kemal Derviş, Daniel Gros, Faik Öztrak and Yusuf Işık, in cooperation with Fırat Bayar 

Series

EU-Turkey Working Papers 

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Notes

Health not wealth should be the decisive criterion when considering the prospects of Turkey's application for EU membership. This paper assesses the growth prospects for the Turkish economy over the next decade. It implicitly ask whether Turkey can start closing the gap with the EU in terms of income per capita once it has achieved macroeconomic stability and negotiations with the EU provide an anchor for overall economic policy-making.
Viewed from this perspective, the outlook is promising. Turkey is still very poor, compared to most of the existing EU members, but is also more dynamic. The fact that most of the so-called ‘periphery’ is now growing more strongly than the ‘core’ confirms that within an enlarged EU the poorer member countries are likely to prosper and thus cause fewer problems than widely anticipated.
The analysis starts by relating the record of Turkey over the last years, which is a story of ‘ups’ and ‘downs’, with most recently a very strong ‘up’. This is then followed by a comparison of two different metrics: GDP per capita and per worker, which leads us to the issue of demographic trends, which differentiate Turkey from both old and new member states. Some of the structural and regional peculiarities of the Turkish economy are next examined, followed by an evaluation of the factors that should determine growth in the longer run. Finally, two upbeat growth scenarios are drawn.

DatePublished

August 2004 

Web (kaynak)

www.ceps.be (14.9.2004)

Title

Stabilising Stabilisation 

Authors

Kemal Derviş, Daniel Gros, Faik Öztrak and Yusuf Işık, in cooperation with Fırat Bayar 

Series

EU-Turkey Working Papers 

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Notes

Recurrent severe macroeconomic crises have not allowed the Turkish economy to realise its growth potential over the last two decades. The stabilisation programme launched after the latest crisis in the spring of 2001 has so far been successful in the sense that inflation has fallen from over 70% to less than 10% and public debt is declining slowly as a % of GDP. The key task now is to transform this hard won stability into a normal state of affairs, i.e. to stabilise stabilisation.
This paper addresses several aspects of this overall task. Section 1 gives a brief overview of what has been achieved so far. It then turns to the key variable that determines Turkey’s vulnerability to shocks, namely the debt-to-GDP ratio and its dynamics. Section 3 then deals with external vulnerability: How can Turkey import capital to accelerate its convergence with the EU without accumulating a crippling foreign debt burden? FDI might play a crucial role here (as it did, and still does, for the new member countries). Section 4 then deals with the quality of the institutions that determine the performance of the Turkish economy in a European context. Section 5 concludes. 

DatePublished

August 2004 

Web (kaynak)

www.ceps.be (14.9.2004)