Turkey’s bid to join EU now further away from success than ever says Commission

The European Commission executive said on October 6 that Turkey’s bid to join the EU is now further away from success than ever because Ankara is undermining the country’s economy, eroding its democracy and destroying its independent courts.

The criticism from the European bloc’s executive added to pressure on the embattled Turkish lira (TRY) which hit its weakest rate in nearly a week. It was also partly impacted by concerns over possible US sanctions after Bloomberg reported that Turkey would soon test its acquired Russian S-400 missile defences despite concern in Washington and the risk of EU sanctions after Turkish President Recep Tayyip Erdogan told German Chancellor Angela Merkel that decisions taken at an EU summit earlier this month were insufficient to overcome disagreements over maritime rights with Greece and Cyprus related to gas exploration.

In very late evening trading on October 6, the TRY was down 0.5% versus the USD at 7.8011 but still short of the all-time low of 7.8669 recorded on September 30.

The Commission’s heavy criticisms of Turkey, which drew an angry retort from Ankara, were made in its annual report on the country.

“Rapid changes in investors’ sentiment”

Blaming “excessively” centralised presidential power for deteriorating conditions in freedom of speech, prisons and the central bank, the European Commission said the government was also exposing Turkey to “rapid changes in investors’ sentiment”, Reuters reported.

“The EU’s serious concerns on continued negative developments in the rule of law, fundamental rights and the judiciary have not been credibly addressed by Turkey,” the Commission added.

“Turkey’s [EU] accession negotiations have effectively come to a standstill,” it said.

A Nato ally, Turkey has been negotiating EU membership formally since 2005.

The Turkish Foreign Ministry dismissed the report as “biased” and “far from constructive”, rejecting the criticism of the handling of Turkey’s economy, democracy and courts.

“Just as it [Turkey] is not straying from the EU, it remains committed to the EU membership process despite attempts by some circles to push it away,” the ministry said. “Turkey is acting within the framework of universal norms, in line with fundamental rights, democracy and the principle of rule of law.”

Turkey has faced several years of harsh Commission annual reports. This time the EU executive once again intensified its criticism, pointing out unsatisfactory monetary policy and public administration and widespread corruption.

Biggest foreign investor

The EU is Turkey’s biggest foreign investor and relies on the Erdogan administration to host some 4mn Syrians that have fled the civil war in their country, rather than allowing them to move on to Europe.

More pressure was heaped on the lira by an announcement from Erdogan and the leader of the Turkish Cypriots that a town in Cyprus that has been closed since a 1974 Turkish invasion would be re-opened. The invasion ultimately split the island in the eastern Mediterranean. The reopening of the town would likely wreck prospects for Turkish Cypriot talks with the Greek Cypriots aimed at bringing more unity to the divided island.