The Economic Dimension of Turkey’s EU Membership: A Stock-Taking Exercise at the Start of Accession Negotiations

Abstract

The public debate on European Union (EU)-Turkey relations tends to focus on the political dimension of Turkey’s EU membership and on the quality with which recent political reforms are likely to be implemented. To some extent, this focus on political issues has been at the expense of detailed work on economic issues in EU-Turkey relations. Part of the reason for this asymmetry has been the assumption that Turkey is well placed to carry out economic reforms given the post-1980 liberalization efforts and the customs union with the EU. Another reason has been the fact that IMF and/or World Bank conditionality since the mid 1990s has already led to a significant degree of economic policy convergence towards EU norms. However, the IMF conditionality is likely to be phased out from the end of 2007 onwards. In addition, the EU has begun accession negotiations, which will require the adoption of not only trade-related EU legislation but also the acquis communautaire in its entirety. Given these developments, the economic costs and benefits of accession will acquire added significance for both Turkey and the EU.