Turkey - EU; Should or Shouldn't? - Economic Consequences

After I wrote about `Should UK leave the EU?` I realized that there is another and completely opposite very strong debate; `Should Turkey Join the EU?` Almost 30 years ago, Turkey applied to the EU full membership and still the process continue. Despite the fact that, Turkey is not in the EU, Turkey is the only country which signed Customs Union Agreement with the EU and From 2005, accession negotiations started. In this article, I'm going to analyze `only` and `only` economical consequences of Turkish Accession to the European Union.

`What If Turkey Join the EU now`

According to statistics, If Turkey join the EU now;
Turkey is going to be;

Largest Country in Europe which will increase EU Area approximately %20.

Second Highest Population after Germany which will increase EU Population by 15%. (According to IMF's future population estimation Turkey's population will be 100 million in 2050 whereas Germany's population will decrease to 76 million.)

7th in Nominal Gross Domestic Product ranking after Holland

6th in Gross Domestic Product ( PPP ) ranking after Spain. (Future GDP figures estimate that Turkey will be in the first 5 economy in EU in 2020)

If you look at the debatingeurope.eu, you can find thousand of comments, very brutal arguments among Europeans about this subject. Some Europeans think Turkey should join the EU, small part says Turkey shouldn't join EU because of EU's current situation and should join EEA and some debaters indicate that Turkey is not ready to EU or Turkey is not a part of the EU. As I realized, most of the people who thinks that Turkey should join Europe look at this harsh subject in economic point of view like me whereas opponents look at it political point of view. (Such as Armenian Problem, Cyprus Problem, Syria Problem etc)

What are the economic advantages of Turkish Accession to the EU?

Despite European Economy (except Poland) slows down, Turkish economy is an emerging economy. What does it mean? It means that Turkish economy grows rapidly and strongly compared to the EU. Analysts think dynamic and young Turkish economy can save Europe from recession.


Furthermore, Turkey has cheap raw materials, cheap energy sources and cheap + educated labor force. (We will come back the labor force later.) potential Turkish membership can reduce all the `3rd party tariffs and quotas` which allows member states to use Turkish resources cheaper.

Thirdly, current EU has no border with Asia directly. How EU can access to Asia? Actually, this question is little bit silly because the real question is `How EU can access to Asia without Russia?` Accession of Turkey can help EU to build economic and political bonds with Asia more easily and directly. For example; Baku-Tbilisi-Ceyhan Oil Pipeline is transferring Azerbaijani oil to the Turkey via Georgia. Potential Turkish EU membership, can bring cheap and high quality oil to the Europe. What is more, other Central Asian and Middle-east countries such as Kyrgyzstan, Turkmenistan and Iraq can sell their energy resources such as natural gas or oil to the Europe via Turkey. In that case, Eastern European Union countries can be more energy independent from Russia.

Turkey is a huge market specially for foreign direct investment. According to the Turkish Government web-page, In 2013, Total Net FDI is 13 billion. Majority of FDI inflows come from Europe, USA and Gulf countries. According to United Nations Conference on Trade and Development reports, despite Turkey is not a member of single market, Turkey has the 7th highest FDI inflow in Europe.

After membership negotiations started, Turkish public sector privatized and liberalized more and more. Turkish telecommunication giant Telsim sold to the Vodofone, Gas-Electricity Provider of Istanbul sold to the Arabian Capital Company etc. As I mentioned before, Turkey receives FDI mostly from EU, USA and Gulf countries. Therefore, Turkey is already a big market for investors and with the help of single market regulations (free capital movement) EU can take the advantage of it.

What are the economic disadvantages of Turkish Accession to the EU?

Although, Turkey is not the strongest economy in Europe, after membership Turkey will become more politically strong. Turkey's population is 81 million and this number will grow according to President Erdogan's `3 child policy`.  This means that in European Parliament, Turkey is going to have 85+ seats. Let's be honest, nobody wants it.

Secondly, Turkey has huge immigration potential which can negatively effect EU's labor market. Maybe, Turkish labor is not cheap as Chinese yet it is still significantly cheaper than European. That is why in 1960's and 70's Germany welcomed thousands of `guest-workers` from Turkey. They were planning to be `guest-worker` yet nowadays, in Germany there are 2 millions of Turks (only Turkish Citizen estimation is 6 million with German Citizenship) According to European Parliament Reports, after Turkish Accession to the EU, In European Union countries there will be approximately 3 million new Turkish -citizen- migrants.

Even though currently Turkey is not the member of EU, European Union financially assistance to Turkey. The EU aid specially goes to gender equality, EU laws reforms, civil society and fundamental rights. Therefore, most Europeans think that if Turkey join the EU, the budgetary expenses will be much more and current EU economy can not hold it.

In Conclusion

`Should Turkey Join EU?` Economically it has more advantages than disadvantages. On the other hand, there are a lot of cultural and political problems. What is more, Turkish support to EU membership declined also. Nowadays, only 45 percent of the population wants to be the part of the EU. I strongly believe that; Norwegian or Swiss model can be better for Turkey than full membership because of political problems and cultural differences. Turks can receive benefits of Single Market which can affect Turkish and European Economy positively.