Economic Scenarios for 2020 Turkey – European Union Will there be an enlargement? Students working group EUECOPOL

2020 Turkey EU LowHighBase 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

2020 Turkey EU LowHighBase 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

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 EU LowHighBase 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

Thanks for your attention!!!