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TURKEY'S EU BID: FOLLOW THE MONEY
By Paul Taylor
Reuters
Feb 11 2008
UK
BRUSSELS (Reuters) - Turkey's bid to join the European Union offers
a bonanza for European business, but not for everyone.
European companies have already invested 16 billion euros ($23 billion)
in the EU's biggest candidate country. Tens of billions more are
expected as Turkey, growing at 5-7 percent a year, modernizes its
infrastructure and privatizes key sectors.
Yet while German trade and investment are booming, French business
is suffering a backlash over President Nicolas Sarkozy's hostility
to Turkish membership of the bloc.
"France has lost contracts to Germany, the UK, Spain, Italy and Greece
because of its constant Turkey-bashing discourse," says Bahadir
Kaleagasi, Brussels representative of the Turkish Industrialists'
and Business Association (Tusiad).
The latest blow came last week when state-controlled Gaz de France
(GAZ.PA: Quote, Profile, Research) was shut out of a consortium to
build the 5 billion euro ($7.3 billion) Nabucco gas pipeline from
Turkey to central Europe in favor of German utility RWE (RWEG.DE:
Quote, Profile, Research) (RWEG.DE: Quote, Profile, Research) at
Ankara's behest.
Turkey earlier awarded a big military helicopter order to an Italian
firm rather than French-based aerospace group EADS (EAD.PA: Quote,
Profile, Research) after the French National Assembly voted to make
it a crime to deny the killing of Armenians in Ottoman Turkey in 1915
was genocide.
That bill has yet to become law, and Laurence Parisot, head of French
employers' movement MEDEF, has lobbied to prevent its passage through
the upper house of parliament.
Across Europe, the business community supports Turkey's EU accession
process, even in countries such as Germany and Austria where opinion
polls show majority public opposition to the idea.
Yet business leaders acknowledge their voice is muted due to political
sensitivities.
"We are in favor of a strong economic relationship," says Philippe
de Buck, secretary-general of BusinessEurope, the main umbrella
organization for EU business. "But the political issues are not for
us to judge. It's not up to us to judge membership."
Executives see the sprawling NATO member on the hinge of Europe and
the Middle East as a giant market of 71 million consumers, with a
booming economy, plentiful cheap labor and major modernization needs.
"Turkey ... has a gigantic economic potential," Parisot told Reuters.
French companies with major investments there include carmaker Renault
(RENA.PA: Quote, Profile, Research) and supermarket chain Carrefour
(CARR.PA: Quote, Profile, Research).
"What we tell our Turkish opposite numbers is 'keep moving forward
in the negotiation process with Europe and don't ask all the time
whether Europe wants your accession or not'," she said.
"We'll see how the accession dynamics turn out in 10 years' time. In
the meantime, above all let us not make it harder on either side to
work together."
The European Commission is trying to use the talks to coax Turkey
into opening its markets wider to European firms.
Banks are already pouring in. Insurers and energy firms are keen
to follow. But the slow pace of negotiations dictated by France and
Cyprus gives Ankara little incentive to push reforms.
Some EU officials are frustrated that the business community is
not more vocal in support of Turkey's accession process. They are
encouraging BusinessEurope and Tusiad to stage a public event this
year to highlight the economic benefits.
Sarkozy's declarations that Turkey has no place in the EU have soured
the mood.
Turkish officials say French companies stand to lose out in forthcoming
privatizations and nuclear energy, environmental, waste management
and water projects due to his stance.
Murat Mercan, chairman of the Turkish parliament's foreign affairs
committee, says government attitudes to the accession process are
bound to sway Turkish public procurement decisions.
"Lack of willingness by major EU countries -- I don't want to name
any -- and biased political debate on the issue of Turkey's membership
may create a reluctance on the Turkish side to enable those countries
to win those major projects," he said.
Germany, which has historic ties with Turkey, seems to have escaped
such retaliation despite the fact that Chancellor Angela Merkel's
Christian Democrats oppose full membership and say the EU should
offer Ankara only a "privileged partnership".
Fabian Wehnert of the Confederation of German Industry (BDI)
said business has not suffered because Merkel has respected her
predecessor's word and allowed the talks to go ahead.
By Paul Taylor
Reuters
Feb 11 2008
UK
BRUSSELS (Reuters) - Turkey's bid to join the European Union offers
a bonanza for European business, but not for everyone.
European companies have already invested 16 billion euros ($23 billion)
in the EU's biggest candidate country. Tens of billions more are
expected as Turkey, growing at 5-7 percent a year, modernizes its
infrastructure and privatizes key sectors.
Yet while German trade and investment are booming, French business
is suffering a backlash over President Nicolas Sarkozy's hostility
to Turkish membership of the bloc.
"France has lost contracts to Germany, the UK, Spain, Italy and Greece
because of its constant Turkey-bashing discourse," says Bahadir
Kaleagasi, Brussels representative of the Turkish Industrialists'
and Business Association (Tusiad).
The latest blow came last week when state-controlled Gaz de France
(GAZ.PA: Quote, Profile, Research) was shut out of a consortium to
build the 5 billion euro ($7.3 billion) Nabucco gas pipeline from
Turkey to central Europe in favor of German utility RWE (RWEG.DE:
Quote, Profile, Research) (RWEG.DE: Quote, Profile, Research) at
Ankara's behest.
Turkey earlier awarded a big military helicopter order to an Italian
firm rather than French-based aerospace group EADS (EAD.PA: Quote,
Profile, Research) after the French National Assembly voted to make
it a crime to deny the killing of Armenians in Ottoman Turkey in 1915
was genocide.
That bill has yet to become law, and Laurence Parisot, head of French
employers' movement MEDEF, has lobbied to prevent its passage through
the upper house of parliament.
Across Europe, the business community supports Turkey's EU accession
process, even in countries such as Germany and Austria where opinion
polls show majority public opposition to the idea.
Yet business leaders acknowledge their voice is muted due to political
sensitivities.
"We are in favor of a strong economic relationship," says Philippe
de Buck, secretary-general of BusinessEurope, the main umbrella
organization for EU business. "But the political issues are not for
us to judge. It's not up to us to judge membership."
Executives see the sprawling NATO member on the hinge of Europe and
the Middle East as a giant market of 71 million consumers, with a
booming economy, plentiful cheap labor and major modernization needs.
"Turkey ... has a gigantic economic potential," Parisot told Reuters.
French companies with major investments there include carmaker Renault
(RENA.PA: Quote, Profile, Research) and supermarket chain Carrefour
(CARR.PA: Quote, Profile, Research).
"What we tell our Turkish opposite numbers is 'keep moving forward
in the negotiation process with Europe and don't ask all the time
whether Europe wants your accession or not'," she said.
"We'll see how the accession dynamics turn out in 10 years' time. In
the meantime, above all let us not make it harder on either side to
work together."
The European Commission is trying to use the talks to coax Turkey
into opening its markets wider to European firms.
Banks are already pouring in. Insurers and energy firms are keen
to follow. But the slow pace of negotiations dictated by France and
Cyprus gives Ankara little incentive to push reforms.
Some EU officials are frustrated that the business community is
not more vocal in support of Turkey's accession process. They are
encouraging BusinessEurope and Tusiad to stage a public event this
year to highlight the economic benefits.
Sarkozy's declarations that Turkey has no place in the EU have soured
the mood.
Turkish officials say French companies stand to lose out in forthcoming
privatizations and nuclear energy, environmental, waste management
and water projects due to his stance.
Murat Mercan, chairman of the Turkish parliament's foreign affairs
committee, says government attitudes to the accession process are
bound to sway Turkish public procurement decisions.
"Lack of willingness by major EU countries -- I don't want to name
any -- and biased political debate on the issue of Turkey's membership
may create a reluctance on the Turkish side to enable those countries
to win those major projects," he said.
Germany, which has historic ties with Turkey, seems to have escaped
such retaliation despite the fact that Chancellor Angela Merkel's
Christian Democrats oppose full membership and say the EU should
offer Ankara only a "privileged partnership".
Fabian Wehnert of the Confederation of German Industry (BDI)
said business has not suffered because Merkel has respected her
predecessor's word and allowed the talks to go ahead.