ECONOMY

Turkey seen likely to win a date for EU talks but not entry

ANKARA (Reuters) – Turkey is likely to win only a conditional date to start European Union entry talks when EU leaders meet to decide its fate in December, according to a survey of financial institutions published yesterday. The Web-based survey, conducted by London-based HSBC Bank on August 2, also found that many investors remain unconvinced that Turkey will have become a full EU member by 2015. «Our assessment of the overall survey results is that there is no evidence of EU-related euphoria among investors and that the market’s view is probably best characterized as guarded optimism,» HSBC said. The survey, which canvassed the views of more than 100 institutions dealing with Turkey, found 58 percent saw Turkey getting a «conditional date» to start talks, meaning it would have first to meet further conditions on reform. Barely a quarter of respondents saw Turkey starting negotiations in 2005, the option most favored by Ankara. But very few respondents saw the EU as rejecting Turkey outright. HSBC noted that investors seemed more optimistic about Turkey’s short-term prospects than its longer-term chances. Forty-two percent of respondents said they saw Turkey as a full EU member by 2015 against 37 percent who said they were not confident. Few expressed strong confidence about 2015. A small majority believed Turkey would see a credit upgrade of one notch by the end of 2004 and that spreads on the country’s external debt would narrow modestly if negotiations began in 2005, the survey showed. The European Commission is due to publish its long-awaited report on Turkey’s prospects in early October. On the basis of that report, the 25 EU leaders will decide at their December summit in Brussels whether to open negotiations. If Turkey, a relatively poor and overwhelmingly Muslim country of 70 million people, gets the green light, the negotiations are expected to last up to a decade. The institutions canvassed by HSBC are based in Europe, the Americas or Turkey and include dedicated emerging market funds, banks and pension and insurance funds.sx