Insider status eludes Turkey despite new economic ties

Date: 07/03/1996

INHERITORS of the Ottoman empire which once included Austria, Greece and Hungary, Turks have been trying for decades to regain their place in Europe.

This year, through the creation of a customs union with the EU, they may be closer than ever to accomplishing their aim.

“It binds them closer to Europe, and they are considered to look more to the West than to the East,” has almost become a chorus from Turkey-watchers in Europe.

It is debatable whether the customs union has given Turkey an inside track in the minds of EU officials. Most say it has not. But none deny that the two entities, which already share an enormous two-way commercial flow, will become economically more interdependent.

It also appears to have given Turkish politicians new confidence.

In Rome last week to discuss European ties, caretaker Premier Dr Tansu Çiller asked Italian Prime Minister Lamberto Dini to let Turkey attend the EU's Intergovernmental Conference, which begins in Turin later this month.

“We feel strongly that we have a lot to contribute to the making of a new Europe in the years to come and we feel we should be a part of that consultation mechanism,” she said.She also asked to attend the next EU summit in June.

More polite EU diplomats call that “wishful thinking”, while others say bluntly that it is “impossible” - even Central and Eastern European countries (CEECs) are not allowed to attend IGC meetings and have only recently been admitted to summits.

“Turkey wants to come closer,” said one EU official. “We do have a political dialogue. But the Turks have no impact at all on our decision-making.”

Still, everyone recognises that it is important to keep Turkey as an ally. UK Foreign Secretary Malcolm Rifkind's first foreign trip, following his appointment last year, was to Moscow, Kiev and Ankara, placing Turkey on a par with Russia and the Ukraine - both of vital interest to the EU.

Through NATO, of which Turkey has been a member since 1952, European countries have been linked to Turkey in the most important domain, that of security and defence. Their troops have fought together and their governments have pledged to protect each other.

The one exception to the NATO rule is that allies are not obliged to protect Greece from Turkey, or Turkey from Greece.

During the past month, as Athens and Ankara clashed over the Aegean islet of Imia (referred to as Kardak in Turkey), Greek-Turkish relations have crept into EU affairs.

“The situation in the Aegean Sea ... concerns the whole of the Union and its relations with Turkey,” the Italian government said last week.

Greek Foreign Minister Theodoros Pangalos did not hide his displeasure at failing to get an EU statement saying Turkey had been wrong. Meanwhile, the Turkish foreign ministry gloated over the news of dissent within EU ranks, issuing a statement that said: “The 14 members' endorsement in this way of their responsibilities towards Turkey in line with the customs union deal is welcomed.”

But EU diplomats say Greece forced its EU partners to discuss the issue, and insist the attention given to it was not due to any new status bestowed on Turkey by the customs union.

Less than 70 days after barriers came down for most goods, capital and services, it is too early to say whether the customs union will bring the promised increase in commercial ties.

Its economic impact has been made more difficult to assess by the political instability in Ankara, which has deterred some potential investors who might have been initially attracted by the new market openings.

But political turmoil has not been mirrored in the market-place. Trading continued to soar throughout February, with international interest in Turkish stocks remaining high.

“It will make a difference, it has made a difference,” said Miranda Xafa, Turkey analyst for Salomon Brothers investment bank in London.

Since last year, when customs union began to look certain, foreign firms have come in to help reorganise local businesses - both small companies and large conglomerates.

Japanese companies have already moved in to establish joint ventures in automobile manufacturing and although the EU took the precaution of establishing local content rules to keep Japanese cars from flooding north from Turkey, interest remains high.

Even though Turkish-made textiles also face entry restrictions, the industry has stepped up investments in anticipation of rising exports.

Turkey faces huge floods of EU products and loss of income with the abolition of import duties, but some Turks, looking on the bright side, say that will make their own industry more competitive.

However, competition still has a long way to go. When a constitutional court ruling last week stalled the country's already slow progress in privatising state utilities - effectively turning away big, interested European and Japanese companies - it showed that a decade of political interference in privatisation is likely to continue.

Investors take some hope from the prospect of a centre-right coalition government forming after nine weeks of fearing that an Islamic party would rule the country after its victory in December's election.

After numerous attempts, Çiller has now agreed to form a coalition between her True Path (DYP) party and the Motherland party (ANAP) led by Mesut Yilmaz. Their personal rivalry kept them from making an obvious political marriage immediately after the election, and only the threat of losing power to the Islamists in the Welfare Party (known as Refah, or RP in Turkish) coerced them into joining forces.

When Yilmaz threatened to join Welfare in a coalition, Çiller warned him not to “bury your country and your party in darkness”.

And although Turkish President Suleyman Demirel said last month there was no reason to fear the inclusion of an Islamic party in government, Welfare leader Necmettin Erbakan has not won points abroad with campaign pledges to take Turkey out of NATO and the customs union, and to replace them with an Islamic common market and security organisation. He repeated his opposition to the customs union only last week.

Erbakan's election victory brought an Islamic party closer to power than in any time since Kemal Ataturk founded secular Turkey from the ashes of the Ottoman Empire 73 years ago.

But despite nearly a century of secular rule, Europeans still think of Turkey as having a split personality. “Turkey is a struggling nation,” said a British diplomat. “A Greece-type Turkey means one thing, an Iraq-Iran-type Turkey is very different.”

When Turkish gunmen sympathetic to the cause of Chechen secessionists hijacked a Black Sea ferry last month, Russian President Boris Yeltsin's response was very telling, underlining the competition between the two nations for hegemony over the oil-rich Caucasus, once part of the Ottoman empire.

“The Turks have always threatened us,” Yeltsin complained.

For its part, Turkey fears resurgent communism and imperialism in Russia, and oftens warns its NATO allies of the threat.

Partly because of Turkey, Russia will not cut its military presence in the south Caucasus, leaving a source of friction between the two countries intact.

Nevertheless, the two are great trading partners, and Turkish diplomats say they know where they stand in Moscow. In Brussels, it's not always so clear.