TURKEY STARTS DECADE-PLUS EU JOURNEY, WITH NO ENTRY GUARANTEE

Bloomberg
Oct 4 2005

Oct. 4 (Bloomberg) — Turkey, clutching an 11th-hour European Union
accord to start entry talks, faces growing opposition as it embarks
on a journey to membership that could last 15 years and still end
in failure.

Last-minute objections by Austria and Cyprus almost derailed the start
of the talks yesterday, highlighting deeper divisions over admitting
a Muslim country of 72 million people with incomes that are a fourth
of the EU average.

“There seems to be no obvious political will on the part of the EU
to embrace Turkey at this stage,” said Cem Duna, a former Turkish
ambassador to the EU who helped negotiate a 1995 free- trade agreement
with the bloc. “The talks are going to be very tough and nations will
have countless chances to veto.”

Turkey is banking on the EU entry process to attract record foreign
investment in the $300 billion economy. Optimism about membership
has pushed stocks to a five-year high and brought the government’s
borrowing costs down to 15 percent from more than 70 percent four
years ago.

Getting the talks off the ground took a month of brinksmanship, with
veto threats by Cyprus and Austria and counter-threats by Turkey,
culminating in a 30-hour emergency negotiating session in Luxembourg.

“Turkey is determined to carry on with reforms,” Foreign Minister
Abdullah Gul told a Luxembourg news conference early today after the
official start of the talks. “Some of the concerns which exist in
European public opinion will, I think, change in 10 years.”

Enlargement Fatigue

The EU is groping for answers on how, when and where to enlarge
again after bringing in 10 mostly eastern European countries last
year, expanding its population to 450 million. Dissatisfaction with
enlargement, and with the prospect of Turkey joining, contributed
to the rejection of the planned EU constitution in France and the
Netherlands this year.

“At the rate Turkey is going it’s going to take at least one generation
for it to join the EU,” said Jean-Dominique Butikofer, who manages
the equivalent of $400 million of emerging market debt at Julius Baer
Asset Management in Zurich.

Opponents have pointed to polls showing only one-third of Europeans
support Turkey’s application. Unemployment in the EU is at 8.6 percent,
increasing concerns that Turkish workers may head to the West and force
more Europeans out of a job. Turkey’s jobless rate is 9.1 percent.

`I’m Hostile’

“I’m hostile to Turkey’s membership,” Marielle de Sarnez, a French
member of the European Parliament, said in an interview yesterday.

“We must continue to build a political Europe,” and letting Turkey
in would lead to the “dilution” of the bloc.

Loudspeakers across Turkey announce the call to prayer five times a
day and the government supplies low-income families with free meals
during the Islamic holy month of Ramadan. Istanbul’s Grand Bazaar, a
warren of covered, interlocking shopping alleys, has a Middle Eastern
flair. The teeming city on the Bosporus, with about 9 million people,
is larger than 12 EU countries.

Prime Minister Recep Tayyip Erdogan is urging Europe to prove it’s
not a “Christian club” by accepting Turkey.

Turkey has made some of the changes demanded by the EU, including
abolishing the death penalty and expanding rights for 12 million
Turkish Kurds, the nation’s largest ethnic minority originating from
a region bordering Iraq.

General Electric Co., BNP Paribas and Royal Dutch Shell Plc this year
agreed to buy stakes in Turkish companies on expectation that the EU
embrace will boost profits.

European Values

The European Commission, the EU’s executive arm, says the government
must now strengthen democracy, including religious freedoms for Greek
Orthodox Christians in Istanbul, and meet the bloc’s standards in 35
areas including competition, labor and the environment.

“The result of these negotiations is absolutely not guaranteed,”
French Foreign Minister Philippe Douste-Blazy said yesterday. “If
it’s not accession, it’ll be another strong link.”

Erdogan, who prays five times a day even during foreign trips, plans
to cut the corporate tax rate from 30 percent to attract investment
and reduce unemployment. Nineteen million people in Turkey live in
poverty, according to government data.

By 2025, Turkey would swallow up EU farm and regional subsidies equal
to about 0.17 percent of annual European economic output, or about
$20 billion in today’s terms, the commission said last October.

Armenian Massacre

“Countries like France and Germany just aren’t ready for any further
expansion of the EU from an economic point of view,” said Daniel Gros,
director of the Centre for European Policy Studies in Brussels.

“The negotiations with Turkey basically have to be forgotten about
for the next five or six years.”

Other demands include Turkey’s recognition of the republic of Cyprus,
the Mediterranean island nation that joined the EU last year. The
European Parliament last week told Turkey to lift a ban on Cypriot
planes and ships by next year or risk a halt to the EU process.

Turkey should also acknowledge that Ottoman Turks carried out a
massacre of Armenians in the last century before it becomes a member,
the EU legislature said.

To contact the reporter on this story: Mark Bentley in Ankara at
mbentley3@bloomberg.net.

From: Emil Lazarian | Ararat NewsPress