Turkey and Joining the EU

There has been much debate about whether Turkey should be admitted to the European Union. These are some of the benefits and costs which Turkey is likely to face if it is successful in joining the EU.

Benefits to Turkey of Joining the European Union EU

1. If Turkey join the EU they have the potential to benefit from higher growth and investment.
2. Membership of the EU will reduce barriers to trade (tariff barriers and non tariiff barriers). Therefore, it is easier for Turkish firms to export to the large EU market (nearly 0.5 billion). Turkey may have a competitive advantage because of lower labour costs.
3. Furthermore, joining the EU will increase competitiveness. Domestic monopolies will face greater competition from EU rivals. This should help to reduce prices and increase efficiency.
4. Another benefit from joining is that successful firms can benefit from economies of scale. As they sell to a wider EU market they can expand production and get lower costs.
5. Membership may encourage inward investment. Western EU firms will be attracted to invest in Turkey because of the new potential markets and lower labour costs.  This investment will help boost productivity and stimulate economic growth growth.

• However, Many Turkish firms may struggle to compete in the single market and could lose business to more efficient western firms. However, this lose of business may be most acute in the short term; in the longer term the increased competition may act as a spur to increase competitiveness.
• However, inward investment may not increase because Turkey’s infrastructure is insufficient.

6. Turkey may benefit from EU policies such as CAP, Regional Policy and Transport Funds. Turkey is one of the poorer areas in the EU and therefore is eligible to regional funds. Over time this could make a big improvement in the structure of the Turkish economy.Problems of Joining the EU

Problems of Joining the EU

1. A potential problem for Turkey is that labour may be attracted to move to the west, where wages are higher. In the EU there is free movement of labour and capital. This could rob the Turkish economy of young, skilled and motivated workers and lead to lower growth in the long term.

• However,  as the Turkish economy catches with the rest of Europe migration will occur less. There are already signs of Polish workers returning to Poland as the gap between the UK and Poland narrows.
• Western Europe may place temporary limits on migration of workers.
• Also the emigrant workers may gains skills and knowledge and then go back to Turkey.

2. Cost of Meeting EU regulations on environment, free trade and harmonisation of regulations. The EU has a lot of bureaucracy and rules for the production of goods.

3. Turkey may struggle with the EU’s controversial CAP. CAP tends to reward overproduction of goods and could lead to higher prices for some goods which have a minimum price under the CAP.

Income Inequality and the EU

There are various factors which will help to reduce income inequality between Turkey and the rest of the EU.

1. EU Funds Regional policy, CAP.
2. Inward investment from other western European firms.
3. Easier for Turkish firms to export. Growing market.
4. Experience of countries like Ireland and Poland suggest that the EU can help reduce income inequalities.

Evaluation

1. Turkish may lose its best workers to the west and so become worse off.
2. Farmers may struggle with CAP and requirements of western europe.
3. Economy not sufficiently developed to have the EURO.