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Economic Scenarios for 2020
Turkey – European Union
Will there be an enlargement?
06.05.2006
2020
Turkey
Low
High
Base
Low
?
Turkey says
NO
Turkey says
NO
High
EU says
NO
Both say
YES
Both say
YES
Base
EU says
NO
Both say
YES
Both say
YES
EU
2020
Turkey
Low
High
Base
Low
?
Turkey says
NO
Turkey says
NO
High
EU says
NO
Both say
YES
Both say
YES
Base
EU says
NO
Both say
YES
Both say
YES
EU
LOW TURKEY SCENARIO

Macroeconomic indicators worse than EU average (GDP
growth, inflation, government debt, interest rate,
unemployment)

IMF expectations did not met

Instability in Turkey

Copenhagen Economic Criteria failed

Low degree of industrialization

Low technology absorption

Brain-drain and low results of educational reforms
HIGH TURKEY SCENARIO

Substantial GDP Growth. Determined by
- low inflation
- low unemployment rate
- budget surplus
- decreasing interest rate
- high inflow of FDI
- trade surplus

Competitiveness

Liberalization of the economy
- modernization of banking sector
- privatization
- increased significance of Turkish foreign trade with EU

Companies modernization
- high result of educational reforms
- successful expenditure in R & D
- adoption of know-how and high tech
- exploitation of economies of scale and scope
BASE TURKEY SCENARIO

Macroeconomics indicators at average level

Structural reforms not completely implemented

Privatization succeeded partly

Moderate decrease of unemployment rate

Not all Copenhagen Economic Criteria met

Adoption of Acquis Communitaire
LOW EU SCENARIO

No constitution

EMU difficulties

No social security reforms

Privatisation not accomplished

Unsuccessful integration of new members

CAP causes internal conflicts

Asymmetric shocks

Scarcity of energy resources and water

Senseless EU Common Market

Conflicts between member states

No confidence of EU citizens in EU vision

Absence of political union

Macroeconomic problems / High unemployment
HIGH EU SCENARIO

Constitution as a symbol of strength

GDP growth / Low unemployment

Common market and privatisation completed

Successful EMU and a common fiscal policy

Increasing birthrate

Reformation of social system

Flexibility of labour market

Renewable energy resources

European investment staying within the EU
BASE EU SCENARIO

GDP growth average

Unemployment rate unchanged

Lags in privatisation

EMU and different fiscal policies

Social issues not resolved

Limited labour flexibility

Maastricht criteria not accomplished

Moderate flow of FDI to new member states
2020
Turkey
Low
High
Base
Low
?
Turkey says
NO
Turkey says
NO
High
EU says
NO
Both say
YES
Both say
YES
Base
EU says
NO
Both say
YES
Both say
YES
EU
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