Turkey

EU commissioner skeptical of Turkey’s growth

I wonder what Mr Karel De Gucht’s objective is. I didn’t expect such a subjective stance from an EU commissioner. Has he a complex?

I quote:

Although Turkey has made major progress in growth, its GDP per capita is still lower than the smallest EU member state, said EU Trade Commissioner Karel De Gucht, in an interview in Istanbul last Friday.

Really? What are the GDP per capita of Romania and Bulgaria? Are they higher than the one of Turkey?

Well why doesn’t Mr De Gucht criticise Greece’s economic situation?

Besides, would Greece’s GDP per capita have been at the current level if it hadn’t taken advantage of the 100 billion euros of EU funds (as well as of huge credits) since 1981? Doesn’t Mr De Gucht know that Greece’s so-called high standards are fictitious?

Message to Mr Karel De Gucht: it’s easy to criticise a country as Turkey which has been isolated during decades by the EU and at the same time a victim of terrorism.

Mr De Gucht ought to know that Turkey’s east is not as developed as its west. But patience. Turkey is modernizing its east at a fast pace (with the money of the Turkish citizens), and its GDP per capita will reach $ 25 000 by 2023.

Besides today Turkey is the fifth economy of the EU.

Anyway, Turkey’s GDP per capita would most probably have been close to the one of the EU if the EU had fought the PKK terrorism, which destabilised Turkey and prevented it from developing its east. I suggest what I wrote last October:

If countries such as the USA, Russia, Greece, Syria, the UK, France or the Netherlands had supported and joined Turkey against the PKK terrorism since the 80s, on the one hand Turkey wouldn’t have lost 40 thousand souls, on the other hand its Southeast would have been economically in a better situation because it wouldn’t have had to spend 100 billion euros and it wouldn’t have lost indirectly another 100 billion because of the PKK. Besides Turkey would have been united and stable for decades thus more democratic since the PKK terrorism caused a huge harm to political stability and democracy in Turkey.

Well if the EU had fought the PKK which it recognised as a terrorist organisation in 2002 only (why so late?), the PKK would not have been financially so strong within the EU, hence the southeast of Turkey would have been able to be stable and modern for a long time, as Italy’s Mezzogiorno.

Thus Turkey’s GDP and GDP per capita would have been much higher if the EU hadn’t deserted Turkey. In fact the EU has made Turkey wait for 50 years at the EU door. Hence too easy to criticise a country that has been intentionally isolated during decades and prevented from developing within a rich and stable EEC/EU.

Turkey’s GDP has dramatically increased in the last decade (thanks to political stability). Now let’s wait 2023.

Since Mr De Gucht refered to the GDP per capita of the smallest EU member state, I’d like to suggest what Eric Ellis wrote on November 11th 2010:

Economically, it seems a no-brainer. The IMF measures G-20 member Turkey as the world’s 17th biggest economy, its $US1 trillion output larger than all but five of the European Union’s 27 member states. Measured by GDP per capita, Turkey is bigger than five-year EU members Bulgaria and Romania and alongside its three former Soviet Baltic states.

Greater Istanbul provides about half of Turkey’s GDP and were it a separate state, its economy would be bigger than that of nine EU members, its GDP per capita up there with Germany and France. And there is serious money here too. In 2008, Forbes ranked Istanbul as fourth on its billionaires-by-city list, behind Moscow, London and New York.

Turkey stumbled last year in the wake of the 2008 financial crisis but few European economies rebounded with its vigour, following the 11.7 per cent GDP expansion in this year’s March quarter, with 10.3 per cent growth in the June second quarter. As Turks impatient to enter Euroland remind, its not Turkey that’s giving the EU the wobbles to threaten Europe’s economic raison d’etre but Portugal, Ireland, Greece and Spain, the so-called PIGS economies.

I quote:

De Gucht said the reason the accession talks stopped are political, adding that if the accession negotiations were to be concluded, there would still be a lot of economic steps Turkey should take.

Firstly, yes the EU-Turkey negotiations are subjectively blocked. No technical reasons but political reasons (about Cyprus and about 5 crucial chapters that the horrible French president blocks with impunity). So it is scandalous, isn’t it Mr De Gucht?

Secondly, Mr De Gucht is of bad faith. An example: the Turkish economy is so interlinked to the EU economy that when/if Turkey becomes an EU member it will immediately be able to enter the eurozone.

Also, here is a useful information for Mr Karel De Gucht:

EU report praises Turkey

I quote:

According to the EU Commission data, Turkey’s gross government debt to GDP ratio stands at 43 percent, whereas EU average in gross government debt to GDP ratio reaches as high as 79 percent.

The government debt to GDP ratio which shouldn’t exceed 60 % according to the Maastricht economic criteria are 140.2 percent in Greece, 118.9 percent in Italy, 98.6 percent in Belgium, 97.4 percent in Ireland, 83 percent in France and Portugal each, 77.8 percent in Britain and 75.7 percent in Germany.

Mr De Gucht is not clear. I really wonder what are the economic steps that Turkey would have to take at the end of the negotiations.

Yesterday Turkish President Mr Gül made a speech in London at the conference of the Confederation of the British Industry.

He said:

Today, we have an economy with strong public finances, sustainable debt dynamics, a sound banking system, functional credit markets and able monetary transmission mechanisms.

Well Turkey is in a much better situation than many EU members. Mr De Gucht is really of bad faith. I don’t understand such a behaviour, above all from an EU commissioner. Is his subjective statement a part of the “Positive agenda” that Stefan Füle and he introduced in Turkey a few days ago?!

I quote:

Turkey is focusing on Europe in a negative way, De Gucht said, adding that the idea of Turkey’s economy looking more to the regional neighborhood and less to Europe is not right either.

It’s incredible to read such a statement. It is the EU that is focusing on Turkey in a negative way.

And Karel De Gucht ought to know that Turkey increased its exports to most of its neighbours, but also to several members of the EU and to South America for instance. In spite of the EU’s notorious double standards Turkey’s objective is still the EU membership. However why Turkey should not improve its economic and commercial ties with its neighbours? Does that disturb some circles in the EU?

“I understand that the neighborhood is important for you, but that is not the way to move up the value chain,” he said. “If you really would like to move up the value chain, you can do it with Europe not with your neighborhood.”

So that’s why the EU blocks 19 chapters and wants to open only the chapters that would destabilise the competitiveness of the Turkish economy?

Yours sincerely,

Cem

PS. Here is a very interesting article – that dates back to yesterday – written by Marc Champion from the Wall Street Journal:

Turkey Touts Its Resilience Amid Crisis in Europe

Marc Champion interviewed Mehmet Şimşek, Turkey’s finance minister.

I quote:

He contrasted Turkey’s ability to make quick decisions as a single-party government that has its own currency with the euro zone’s need to reconcile 17 different governments, leaving them “behind the curve.”

I quote:

Mr. Şimşek in many ways epitomizes a new, more prosperous Turkey that feels able to offer lessons on structural reform and fiscal prudence to richer neighbors in the EU.

Maybe that’s what is not swallowed by some EU leaders and other diplomats.

An ethnic Kurd and son of illiterate subsistence farmers, Mr. Şimşek grew up in extreme poverty in the mainly Kurdish Batman region of eastern Turkey. At 44 years old, he is finance minister of an economy that has roughly tripled gross domestic product per capita since 2002 and is a member of the Group of 20 industrial and developing nations.

Mr. Şimşek ticked off Turkey’s economic highlights: low public debt (42% in 2011, according to the International Monetary Fund estimates, compared to 120% in Italy and 99% in the U.S.); a budget deficit of 1%; a tightly regulated banking sector with average capital ratios above 16%, well above Western banks’; and falling unemployment.

The former Merrill Lynch banker said he recognizes that Turkey, a nation of some 75 million, still has large shortcomings, including in education, labor flexibility and a chronic dependency on energy imports. Nor has the government got everything right, he said. “We would accept that domestic demand has been a lot stronger than we have had ever anticipated,” Mr. Şimşek said.

The education system in Turkey has to be reformed. Regarding energy, Turkey will be less dependent. There is oil (40 billion barrels) and gas (8 trillion cm) in the Black sea. And a few days ago oil was found at Batman.

That in turn is boosting Turkey’s current-account deficit, as consumers devour imports and markets for Turkish exports in Europe and the Middle East shrink, leaving the country exposed to a potential funding crunch should external financing for the deficit suddenly pull out.

The account deficit is a serious problem, but according to a few Turkish ministers, it will soon decrease.

PPS. By the way, the Turkish Cypriots are still isolated. What is Mr Karel De Gucht’s opinion about the direct trade that the EU promised the Turkish Cypriots in 2004?

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Comments

  1. Good evening Erc An,

    I quote Cengiz Aktar:

    As a high-resolution picture of Turkey 20 years ago, the opinion is valuable for comparisons with today’s Turkey. But it is also a telling avowal of EU’s real dilemma with Turkey’s membership. Indeed, the main reason behind the negative response was Turkey’s poor economy, and therefore, incompatibility with the EU countries’ powerful economies. While arguing this way with Turkey, the EU, on the other hand was embracing central and eastern European countries that were at least as poor as Turkey during those years.

    Look at the coincidence: On Dec. 18, 1989, the EU reached a decision to set-up the first comprehensive financial support package, dubbed as PHARE, for countries just leaving the Soviet sphere of influence. Two days later on Dec. 20, 1989, the Commission rejected Turkey’s membership application!

    His article is available here:

    http://www.hurriyetdailynews.com/n.php?n=the-week-of-progress-report-2010-11-12

    Best regards,

    Cem

  2. Good afternoon Erc An,

    I quote again Mr De Gucht:

    “I understand that the neighborhood is important for you, but that is not the way to move up the value chain,” he said. “If you really would like to move up the value chain, you can do it with Europe not with your neighborhood.”

    So that’s why the EU imposes all the Turkish businessmen a humiliating and scandalous visa policy?

    I was reminded that disgraceful policy by Economy Minister Zafer Çağlayan who denounced (once again) that policy “of torture” yesterday at Mersin.

    He is quoted by ABHaber:

    “AB bugün tüm işadamlarımıza vize işkencesi uyguluyor. İşadamın malı serbest dolaşırken, fuara gidip fuara adam gönderemiyor. İnsan hakları ihlali işleniyor. Vize almak için anasından doğduğu günden o güne kadar hayat hikayesini istiyor. Kimin ne hakkı var? Başarılı işadamlarına vizeyi koyuyor. Vizeyi kolaylaştıracağız diyorlar, hadi oradan, kolaylaştırma kaldır vizeyi. Brezilya dahil birçok ülkeye AB üyesi olmasa da serbest dolaşım veriyorsun, benim malıma kota koyuyorsun, vize istiyorsun. Türkiye’ye karşı her türlü engellemeyi yapıyorlar. Tüm bu zorluklara rağmen asla bu işten yılmak yok, bu işten geri dönüş yok, o zaman haklılığımızı kaybederiz. Taş basıyoruz yüreğimize. Benim tüm derdim vizenin kaldırılması. Avrupalı Hans benim memleketime nasıl geliyorsa, benim Ahmet’im, Mehmet’im de aynı şekilde gitsin.”

    The interesting article is here:

    http://www.abhaber.com/ozelhaber.php?id=11918

  3. it is a good point Cem; sincerity of Mr De Gucht’s proposal is doubtful and how well it represents the actual EU actions is highly questionable considering that Turkish foreign ministery has done their work to initiate the process of visa exemption while EU is still dragging their legs.

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