ECONOMY

EU entry focuses Turkey

Fitch Ratings, the international rating agency, yesterday said in a note that, while much of the substance of Turkey’s EU progress report is positive, some qualifications remain to getting a clear date to begin accession talks, while, more importantly, the report raises questions over the procedure and conclusion of future EU negotiations. Turkey is rated B+ at long-term foreign and local currency by Fitch. Both ratings come with a positive outlook. According to Fitch, the tone of the report is generally encouraging, and due recognition is made of the political reforms instituted by Ankara over the past 12 months. Provided that the Turkish authorities can now implement a number of recent judicial reforms (Penal Code, Courts of Appeal, Associations Law), Fitch believes there is a strong likelihood of Ankara receiving a clear date to start accession talks at the EU summit on December 16-17. Such an outcome is not a done deal yet, given growing indications of resistance to Turkey’s accession from some EU member states. However, Fitch believes that if in December Turkey is not invited to commence accession talks «without delay,» a conditional date for some time in the middle of 2005 will be granted. Fitch stresses, however, that implementation of political reforms will be critical. Progress in this area will certainly be more important than it has been for the new states that joined the EU this year and probably more so than for Bulgaria and Romania, which are expected to join the EU in January 2007. The European Commission has attached a so-called «emergency brake,» which would be applied in the event of a weakening or reversal of the key political reforms that Ankara has adopted this year. This means that the Turkish government cannot afford to be complacent, and will need to focus much more carefully on the implementation rather than simply the adoption of key political changes. This clause might help satisfy the group of Turkey’s «hawks» who have recently been voicing their opposition to its joining the EU, and in some ways, therefore, could make an unqualified «yes» verdict at the EU summit in December easier as there will always be an option to reverse such a decision in the future. Once negotiations have begun, implementation will also be critical with regard to the accession chapters themselves (acquis communautaires), and the usage of «safeguard clauses» that were introduced this year for Bulgaria and Romania will be of relevance for Turkey’s accession bid. It is likely that accession negotiations will prove more complex and drawn out than has been the case for the most recent wave of EU members, and of course there will be much more focus on the practical results of the acquis than their adoption. This means a potentially lengthy negotiating period. At the same time, the introduction of the safeguard clauses should mean that the accession process is a stronger policy anchor for Turkey than it has been in other recently adopted member states. While policy discipline among the new member states was strong as accession negotiations approached, once invitation had been achieved, several countries exhibited policy fatigue and complacency, leading to a weakening of the reform effort (especially in the economic sphere). «The framework of Turkey’s accession process suggests that it will not be afforded such a luxury,» Fitch said. Finally, while the path toward EU accession is all important at this stage, Fitch believes that the timing of accession will become an increasingly critical factor. Fitch currently estimates that it would take Turkey 10-15 years to join the EU. Such a time frame would be significantly greater than was the case for all new EU members, which completed their accession talks in about four to six years, but given the range of political and economic challenges, together with the stricter negotiating framework, this is both practical and realistic. However, accession to EU institutions and the varying degrees of support they offer cannot remain elusive indefinitely, and Fitch believes that a time frame much beyond 10-15 years would damage the credibility of the exercise, and could lead to growing resentment in Turkey, undermining reforms and rendering the process increasingly meaningless.