Turkish Parliament Passes Key EU Reforms


Economic News

22 Jul 2010
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In an early morning session on August 3rd Turkey's Parliament passed sweeping reforms aimed at European Union membership.

The most contentious of the reforms - abolition of the death penalty and easing curbs on the use of the Kurdish language in broadcasting and education - had stifled the government's work for months.

Turkey's mass dailies heralded the vote as historic. The country is hoping EU membership talks will begin at the end of the year, when Brussels will name the next wave of entrants. But it is unclear whether the changes have come too late, and Ankara could still "miss the EU train."

But there is little sense of this among the country's mainstream political leaders, who have promised to advance Turkey's longstanding drive for inclusion in the European club.

"Turkey is waiting for full membership in the shortest time," Prime Minister Bulent Ecevit said of the vote on state television TRT. "Full EU membership is our right… Turkey is already freer, more democratic, more European… Different languages and dialects, in the meantime Kurdish, will be free under government control," Ecevit said.

The governing coalition had become hamstrung over the reforms, with the Nationalist Action Party (MHP) warning that changes allowing greater cultural freedoms would foment separatism.

"While these rights and freedoms are used, our national unity and the country's integrity will be strictly protected," Ecevit said.

A 17-year-long war between Turkish security forces and the Kurdistan Workers Party (PKK) which cost some 30 000 lives all but ended when its leader Abdullah Ocalan was imprisoned and sentenced to death for treason.

Parliament abolished the death penalty, though it will be reserved for times of war and imminent war.

Turkey's Parliament voted on July 31st to hold elections on November 3rd after months of political uncertainty threatened to disrupt the country's massive stabilisation package backed by the International Monetary Fund (IMF).

The vote brought an end to speculation about the fate of the $16bn IMF-backed reform pact meant to wrest the country from its worst economic crisis since 1945 and to worries that political uncertainty could throw a wrench in Ankara's drive towards EU membership.

The measure was passed overwhelmingly by a vote of 499 in favour, 62 against. Three deputies abstained.

There was also good news from the IMF, which announced on August 1st that a date for a meeting of the fund's board to consider the latest $1.1bn loan tranche would be held on August 7th.

"We indeed have set a board date for August 7th," IMF spokesman Tom Dawson said at a press briefing. "We emphasise the programme is on track."

The State Statistics Institute on August 3rd announced that the consumer price inflation (CPI) rose in July 1.4%, up from 0.6% in June, to record an annual rate of 41.3%. Wholesale price inflation climbed 2.7%, up from June's figure of 1.2%, to give an annual rate of 45.9%.

The World Bank said on August 5th that there would likely be no problem meeting the 35% inflation target at year's end.

The architect of Turkey's recovery is Economy Minister Kemal Dervis, a former World Banker brought into the government last year to steer the $16bn stability pact. There is broad agreement that he has been largely successful in pointing the country towards calmer waters.

Outside observers are keen to see Dervis continue at his current post, but his intentions remain unclear.

Amidst a mass defection of Prime Minister Bulent Ecevit's Democratic Left Party (DSP) at the end of July, Dervis offered his resignation from the government, but quickly retracted it on the urging of President Ahmet Necdet Sezer.

Two former key figures of the DSP, Ismail Cem and Husamettin Ozkan, quickly formed their own nascent group, New Turkey Party (YTP), and it looked like Dervis would join them. The trio were dubbed the "troika" and likened to a dream team by the country's oft adulating press.

But recent comments by Dervis suggest he will stay on with the government.

"I am at my post," Dervis told reporters on July 31st on his return from a 10-day trip to the United States.

"It is very important for the economy that the last few weeks of uncertainty lifts," Dervis said of the political turmoil that has gripped the country since the ailing Ecevit went to hospital in early May.

"I want to reiterate that my approach to these problems is an economic one. For the economy we have to do whatever is necessary and helpful."

But his political aspirations seem clear, even if open to change.

"I am searching for a broad left alliance. If this is not possible I could return to university," Dervis said on August 2nd after a meeting with Ecevit.

In a change since Dervis's short-lived resignation from the government, in which Deputy Prime Minster and MHP leader Devlet Bahceli declared him a lame duck, Ecevit offered encouragement.

"He seems to have decided to continue with his economic duties in the government. This is a very pleasing development," Ecevit said.

However, it seems that Ecevit is unconvinced, warning Dervis on August 6th that questions over his status would not be tolerated. He said he was warning Dervis to choose between his economic duties and his political future.

Dervis met on August 2nd with Cem, to whose party Dervis has been strongly linked, and said the two continued "to carry out discussions."

Uncertainty over what shape the future government will take is nothing new in a country used to political upheaval, but the reforms passed would have been taboo just a couple of years ago. According to Leyla Yeltin of the Economic Development Foundation (IKV), a group that promotes EU membership, the passing of the reforms was essential to demonstrating Ankara's political will and "determination."

"Although time is short, it seemed from the outside world as if we were not working quickly enough." Yeltin said.

According to some polls, around 70% of Turks support EU membership, and all the mainstream parties are running on the promise of working towards full membership.

"Turks know that EU membership means economic prosperity, human rights, democracy," said Yeltin.

Political parties staking their futures on EU membership are sure to offer prismatic visions of Turkey's place in Europe. But the benefits of the reforms should be measured by sure-footed steps, says Yeltin.

"Each step you take is irrevocable. Each step is a move forward."

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