Berlin Calling

Turkey

Economic News

22 Jul 2010
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German Chancellor Gerhard Schroeder's two-day visit to Turkey this week served to focus minds on the continuing key role trade between these two long-time allies now plays in both economies. Turkey's exports to Germany, its largest trading partner, may exceed 10bn euros this year, according to officials speaking at a conference of Turkish and German businessman held during the May 4-5 visit.



Schroeder also used the occasion, which included stops in Ankara and Istanbul, to highlight some political concerns, telling Turkey that it must continue democratic reforms and improve its human-rights record in order to gain membership of the EU. If Turkey does so, it can expect to begin accession negotiations on October 3, Schroeder said.



"We're counting on the reform process becoming reality in society," Schroeder said on May 4. "We know putting reforms into practice is difficult, that you occasionally meet resistance in society. But it's important that the government pushes through reforms."



This remark echoed concerns of some observers that the pace of reforms in Turkey has slowed since the EU's decision last December to begin membership talks this year. This criticism has come on top of growing disquiet with Turkey's potential future membership of the EU in France and Germany in particular, despite strong support for Turkey's EU bid from leaders such as Schroeder and French President Jacques Chirac.



But the political factors are eventually expected to be mooted by the powerful economic benefits of having Turkey in the EU. European countries are on average older, wealthier and in facing a shortage of cheap labour. Turkey is younger, poorer and struggles to find enough jobs for its workforce.



Yet with or without membership, Turkey is already beginning to enjoy the benefits of increased trade with Europe and especially Germany. Kemal Sahin, president of the Turkish-German Chamber of Commerce, told reporters during the visit that he expected exports to Germany would surpass 10bn euros in 2005.



"The Bosphorus tiger is ready to grow and invest more in Germany," Sahin said at the Turkish-German Economic Congress on May 4, which was attended by 1200 delegates from both countries. Executives from companies including DaimlerChrysler, Siemens and the Metro hypermarket chain attended. There, for example, Siemens Chairman Klaus Kleinfeld said that his company's investments in Turkey "represent 2bn euros of business activity."



By the end of 2004, 1181 German firms had registered investments in Turkey, according to Halim Mete, the vice president of the Turkish Union of Chambers and Commodities Exchanges.



Prime Minister Recep Tayyip Erdogan also added during one of several stops on his tour with Schroeder that trade between the two countries exceeded $21bn in 2004.



However, while Turkey's economy looks increasingly ready to be absorbed into the EU - the Turkish economy was one of the world's most dynamic last year, with GNP growing 9.9% - the debate more often than not tends to return to the political theme.



Schroeder said more steps toward an open democracy were needed before membership negotiations this autumn. He said in an interview published May 2 in the daily Milliyet that a "change of mentality" was required to ensure that reforms necessary for EU entry were long-lasting and effective.



Turkey has already passed laws extending cultural and language rights for the nation's estimated 12m-strong ethnic Kurdish minority and legislation reducing the role of the military in civilian affairs.



Yet, "Mistreatment by security forces, limits on freedom of expression and discrimination against women are incompatible with our common values," Schroeder said in a speech during his visit.



European leaders have recently criticised Turkey's treatment of protesters and minorities, although they have also commended efforts to curb torture and mistreatment by police, incidents of which in fell 13% last year to 1040 reported cases, the Ankara-based Human Rights Association said on March 18.



There is also the question of religious freedoms. The German daily newspaper Der Tagesspiegel used the occasion of the visit to say that the problems faced by Christians in Turkey represented a "sore point" in the country's bid for EU membership.



"There is hardly any other area in which Turkey is as far removed from the implementation of European norms as that of religious freedom," the paper said. Turkey will have to "completely reorganise the relationship between the state and religion if it wants to join the European Union".



Yet meanwhile, the economic connections continue to grow and take their own route. With many Turks also resident in Germany, or indeed, now seeing themselves as German, links between the two countries have a human basis too, which can be exploited to the advantage of both. It can, however, also be used as a stick to beat with, as opponents of Turkey's EU membership in Germany raise the spectre of yet more Turkish immigration, alongside newly enhanced fear of Islamic influence. Making sure that the positive side of Turkish-German relations is to the fore is the job of both Schroeder and Erdogan, both of whom are likely aware of the sensitive task this can be.

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