EU a key anchor and Turkey not to lose it: Deputy PM
AA photoThe European Union is a significant anchor for Turkey and the country will not lose it, said a top economy official, adding that if Turkey can maintain its progress on the road to EU integration, it will succeed in overcoming many problems and reducing risks to a minimum.
“I am not pessimistic about the EU membership process. Even during these difficult days, we see a number of key positive developments regarding this process. The EU is a key anchor for Turkey. We will not lose it, although we have some disagreements time to time. I do not see any disintegration [of ties] with the West. This, of course, does not mean we should ignore the Middle East, which would be a wrong strategy,” Deputy PM Mehmet Şimşek told NTV on Dec. 27.
He also strongly refuted several claims about the country’s preparation for capital controls.
“This has never been the case. We are a key constituent of the global economy. Turkey is in need of a considerable fund inflow and we can overcome such obstacles only as long as we obey global economic norms. We can overcome these problems by maintaining our EU integration process so as to keep our risk premium at a minimum. During a time when protectionism is on the rise, Turkey wants to modernize its Customs Union deal with the EU so as to include services, agriculture and public procurement acquisitions in the deal. The country is also trying to sign free trade deals with Gulf countries as well. We never consider any move incompliant with market norms,” added Şimşek.
He also noted that some recent problems with the EU should be seen like “disagreements between family members.”
Modernizing Customs Union deal
Although bilateral ties with the EU are not as good as desired, there is no signal of disengagement, he said.
“The EU agreed to widen the scope of the Customs Union agreement with Turkey recently. This is very important,” added Şimşek.
He also noted that Turkey’s perception abroad has long been negative in a fashion that does not reflect the truth amid continued attacks by several terror organizations.
“In this environment, I always tell investors that Turkey has a robust national will and strong government despite all problems … These comments have eased their concerns,” said Şimşek, adding that $1.6 billion net funds had flowed into the country in the last 11.5 months.
2016 a ‘tough’ year
2016 was an extremely challenging year amid a diplomatic crisis with Russia, global economic fluctuations, a failed coup attempt and escalating security concerns, but Turkey’s economy showed an extraordinary resilience, he said. “I believe risks in 2017 will be more manageable.”
Şimşek said the normalization in Turkish-Russian ties was continuing and that there was an acceleration in Turkey’s reform moves.
“It is important to fill the empty side of the glass…There will be a strong story to be told, as all this dust will be cleared away,” he said, adding that Turkey would start to benefit from the latest measures to revive real sector investments by the second quarter of 2017.
Some companies in Turkey suffer from a serious deficit in foreign currencies, and the government is working to alleviate forex borrowing limitations to help them, he said.
“Tomorrow or the next day we will discuss foreign exchange risks for businesses and inflation in the Financial Stability Committee,” he said.