Are we losing the EU anchor?

UĞUR GÜRSES ugur.gurses@radikal.com.tr

Turkey, because it did not need it anymore, left the IMF anchor in 2008. Well, what are we doing with the European Union anchor we obtained in 2004? What we lived through recently shows that we are about to lose that anchor also; whereas we still very much need the EU values for ourselves. Through the government which has managed the Gezi protests very badly, we have learned very well that nobody would buy the “Ankara criteria” formulated.

Turkey which was shaken with the 2001 crisis was able to make important reforms in 2002, started implementing a program with the IMF and was able to obtain a financial assistance of nearly 25 billion dollars. This program was named the “IMF anchor.” While this anchor was still ongoing, a second “anchor” was in Turkey’s agenda. That was the “EU anchor.” On Dec. 17, 2004, with the EU leaders inviting Turkey to accession talks, the “EU anchor” was on the agenda.

The IMF anchor was effective between 2002 and 2008. At the beginning, it was an important anchor to be able to reach the stage of being able to pay back your debts. After the second half of this period, it became an anchor for a balance of resources for economic growth. In 2008, it was ended through a political preference. The IMF anchor, actually was going to provide the necessary conditions to meet the Maastricht criteria which are regarded as the backbone of EU values. As a matter of fact, toward the end it did so to a great extent. The EU’s political backbone was the Copenhagen criteria; and after covering a significant distance in these, talks started.

The EU anchor, especially because a new chapter has not been opened for three years, so to say, has been left to “sleep.” The severe responses of the government’s, primarily of Prime Minister Erdoğan, and of the relevant ministers to the harsh statement that came from the European Parliament in response to the Gezi resistance, and those words uttered “We do not recognize them,” should be an indication that the EU anchor has been shelved. After the Gezi resistance was left behind, the fact that the political will prioritizes strengthening of the police rather than strengthening of democracy gives an idea about the situation of the EU anchor.

At the EU foreign ministers meeting on June 26, if a new expected chapter is not opened for discussions then relationships will further be strained. We will be losing the EU anchor that has already been frozen.

The government, which prefers a “voyage without an anchor” in economy and political routes, had better pay attention to the new situation that emerged especially in global economies.

The recent decisions of the American Central Bank Fed means that money will be flowing back to developed countries. Turkey is at the top of the countries that would be most affected from this changing global financial climate; because we are a country that spends much more than it saves, and one that closes this gap with funds flowing from developed countries. In other words, our current account deficit is high and we finance it predominantly through short term capital inflow that is called “hot money.”

Even if there is no capital exit, a decrease in the fresh funds flowing into the country will bring a lower growth rate than today’s 2.5-3 percent to the Turkish economy as well as a higher foreign exchange rate and inflation rate and higher unemployment.

The new situation in the USA’s monetary policy will push all the macroeconomic balances of countries such as ours to the negative through the balance of payments. We will probably understand very well the value of structural reforms, the micro improvements that were not made “in good days.” The EU values mean environment conditions that would make life much better for us even if we were not a member. Nobody should mention “Ankara criteria” because over there, there is “strengthening of the police” not democracy…

Uğur Gürses is a columnist for daily Radikal in which this piece was published on June 21. It was translated into English by the Daily News staff.