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Saturday, October 16, 2004

Ankara should be wary of Brussels

Owen Matthews in the latest issue of the Spectator is trying to tell the Turks what I have been saying to them for years.

Despite the fact that most Turks equate entering the EU with winning the lottery, it will be a terrible thing for Turkey That Turkey will change the EU for the better is clear, the bigger the Union, the greater the centripetal forces within it, and the more difficult it will be to create a United States of Europe ruled from Brussels.
Hence the support for Turkeys membership from countries like the UK and other less federalist nations.
Countries like Iceland and Norway, which have chosen to stay on the fringes of the Union but not be in it, can reap great economic benefits. This is especially true of Turkey, which, unlike the above-mentioned countries, has the added competitive advantage of a huge, cheap labour market. Turkey has the best of both worlds, it is in Europes customs union, and can trade freely with the EU while remaining outside its constrictive practices such as the social chapter, the 48 hour week and the crushing raft of health and safety and environmental legislation which make it so expensive to do business inside Europe.
Turkey is a country where anything up to half of the economy exists in a twilight world where regulations and taxes do not exist. The addition of the burden of EU law to those larger companies which do not benefit from tax evasion will absolutely cripple them. The smaller companies will ignore the new regulations just as they do the existing ones. As it is these big companies that are driving the modernisation of the country, and it is here that the educated elite work, EU membership could potentially push Turkey back into the dark ages.
Turkey would do far better if it worked to cut down on its own corruption and bureaucracy (instead of importing Brussels’s), make foreign investment easier by scrapping regulation (instead of increasing it), and foster a functional banking sector. Turks, in their pride, have a horror of the kind of privileged relationship sort of membership that the German Christian Democrats leader Angela Merkel proposes, assuming it to be the synonym of second class citizenship. But they are wrong: associate membership is closer to Turkey’s fundamental interests.
Since 1997, Turkey has had a customs union with the EU, a one sided one that excludes textiles and agriculture, Turkeys two biggest sectors. Despite the obvious disadvantages, Turkeys exports to the EU have exploded in the years since. Productivity has risen, and companies have moved up the value chain. The coming of the EU stranglehold, will chase much of this new industry and opportunities away from Turkey to the far east or elsewhere. Turkey will then become trapped in poverty, unable to pull itself up and kept alive on EU welfare. Lets hope for the sake of the Turks that something gets in the way of them realising their dream.

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