Turkish prime minister Recep Tayyip Erdogan is determined to get his country into the EU despite nay-sayers on all sides. He talks to Karina Robinson.

It was one of many potent symbols. Foreheads all but touching, the two tall, moustachioed leaders, Turkish prime minister Recep Tayyip Erdogan and Egyptian prime minister Ahmed Nazif, spoke intensely over dinner during the World Economic Forum’s (WEF) November meeting in Istanbul.

“The Islamic world follows very closely Turkey’s joining the EU,” said the Turkish leader in an interview later that night at the Ciragan Palace Hotel overlooking the Bosphorus.

One of the overarching challenges of our times is to avoid the much discussed clash of civilisations and improve relations between the Western and Muslim worlds in an effort to fight poverty and extremism. Under the aegis of the United Nations (UN) in 2005, Mr Erdogan and his Spanish counterpart, José Luis Rodríguez Zapatero, co-sponsored the Alliance of Civilisations, a high-level initiative aimed at tackling exactly that.

But for Muslim countries like Egypt, where polls show that if elections were free and fair the Islamic Brotherhood would run the country, high-level talking shops are not enough. Mr Erdogan may say the Alliance is “the project for peace of the 21st century” but Egyptian eyes, and those of countries such as Iraq, Iran and Syria, which share borders with Turkey, are focused on Turkey’s negotiations to join the EU. And it is not the economic imperative that they are scrutinising; it is the message being sent about Europe and the West’s willingness to open itself to the Muslim world.

The Cyprus question

This makes it all the more absurd for an island with a population of less than 800,000 to be a massive obstruction between Turkey and the EU. As a member state, Cyprus has a veto over all stages of negotiations. As The Banker went to press, parts of Turkey’s accession were put on hold.

“Where I stand, Cyprus is not part of the Copenhagen or Maastricht criteria. So I don’t see Cyprus as an obstacle. The place to resolve Cyprus is not the EU but the UN,” says Mr Erdogan, who has led his country of 75 million people since 2002.

He argues, convincingly, that in 2004, Turkey worked hard with various partners such as the UN on resolving the Cypriot question through a referendum on a settlement plan. Its rejection by the Greek Cypriots puts the onus on them, he believes, while the EU’s promise then to end the isolation of Turkish Cyprus – as a concession to balance the accession of Greek Cyprus to the EU – has not been fulfilled.

The EU is insisting that Turkey unilaterally open its ports to the Greek side of the island. Many suspect that is simply a convenient excuse to sideline the topic of Turkey at a time when the EU is suffering from enlargement fatigue and fear of foreign labour undercutting the wages of locals, with some leading members of the 25-nation body appearing less than enthusiastic about Turkey joining.

Cross-border moves

Perhaps a better symbol of how little Cyprus matters is the fact that in late November, Greece’s Alpha Bank announced the acquisition of a 50% stake in a joint venture to manage Turkey’s Alternatif Bank. In the spring, two other Greek banks had bought major stakes in Turkish banks.

During Friday prayers at the emblematic Blue Mosque in Istanbul a week before Pope Benedict XVI’s visit, the imam’s sermon – more or less dictated by a government department – was that Turks should greet the Pope magnanimously and rise above his controversial remarks about Islam made in an autumn lecture. These were perceived as calling the Muslim religion bloodthirsty.

During his visit, the Pope reportedly told Mr Erdogan that he supported Turkey’s bid. Yet he had campaigned fiercely and unsuccessfully for a reference to Europe’s Christian heritage to be included in the EU’s constitution in 2004 and had been negative about Turkey joining the EU.

In all the brouhaha about religion, the fact that Turkey has been a secular state since the 1920s, when Mustafa Kemal Ataturk founded the Republic of Turkey, has been forgotten.

Fears that Mr Erdogan and his Justice and Development Party have a hidden agenda to convert Turkey into a religious state have been rife, with anecdotes told behind closed doors. This is partly because his party, known as the AK Party and founded in 2001, grew out of the Islamist Welfare Party, which had been banned in 2000 by the military for allegedly threatening the country’s secular nature.

“When our party was established, we clearly stated what we stood for in our party by-laws. We have no hidden agenda. We are not a party based on religion but on the human being,” says the 52-year-old Mr Erdogan, a former mayor of Istanbul. “As you know, this country is predominantly Muslim. There are those who practice it in full, to a lesser degree or not at all. It is not the individuals who are secular, it is the state, it is our form of government. To claim we have a hidden agenda is disrespectful and an insult to our party.

“I am a defender of the secular state,” he adds.

The fact that his wife wears a headscarf, which stops her from attending some state events due to the secular constitution, adds to the concern about how strongly he feels his religion should have a larger role in the state. Comparisons are drawn with the past few prime ministers, none of whose wives wore headscarves. Mr Erdogan, a father of four, is dissimilar to his overwhelmingly short and pot-bellied predecessors in other ways: tall and relatively slim, with soft, unlined cheeks.

Winning ways

The elite, Westernised business community, who generally wear their religion lightly, were initially mistrustful of a man who seemed so different from what they were accustomed to. Now, they are his biggest fans. “He put Turkey joining the EU as the number one priority on his agenda. The government has done a lot of economic and social reforms, and foreign direct investment (FDI) shows this, it has been coming from all over the world,” says Suzan Sabanci Dinçer, a member of one of Turkey’s powerful business families and managing director of Akbank, the third largest bank in Turkey and in which Citibank announced it was buying a 20% stake last October.

In 2005, the country attracted more FDI than it had in the past 10 years, while in 2006 it will have attracted about $22.1bn and in 2007 a forecast $27bn, according to Raymond James, a financial services firm with offices in Istanbul.

Ms Sabanci says of Mr Erdogan: “He is a very charismatic gentleman with very sharp thinking.”

On the economic front, under the auspices of the IMF, Turkey has been a star performer. At the end of his visit to the country in November, John Lipsky, first deputy managing director of the IMF, praised the country for the big changes achieved in the past five years in fiscal adjustment, central bank independence, financial sector restructuring and privatisation. He noted that the government was committed to “maintaining the momentum by following through vigorously on various initiatives that are under way already”. These include implementation of the new pension and health systems, tax reforms and a reinforcement of the supervisory framework for the financial sector.

However, a European Commission report that came out in the same month said that Turkey had failed to make enough progress on non-economic issues, such as freedom of expression, minimising the influence of the military, tackling corruption and increasing the independence of the judiciary. These are also among the criteria for joining the EU.

Distance to cover

Mr Erdogan believes that Turkey has made big strides on all fronts but acknowledges the undertaking is far from over. “We don’t have many more reform laws that have to be passed. [Now] we must focus on implementation,” he says. “This is not to say that there are no problems with implementation, but a change of mentality does not happen overnight. We do cover distance with each passing day.”

Article 301 of the Turkish Penal Code, a 2005 law to replace an earlier one, is a focus of controversy. It has been heavily criticised by non-governmental organisations such as Amnesty International, and was used, for instance, to lay charges against author Orhan Pamuk, who said in 2005 that 30,000 Kurds and one million Armenians had been murdered in Turkey. The accusations by the 2006 Nobel-prize winner and others are not accepted by the state.

“I don’t believe Article 301 restricts freedom of expression,” says Mr Erdogan. “In fact, many opinions were sought when the article was elaborated; opinions from Poland, Germany, Italy, Spain. They have an article to the same effect. Paragraph 4 [‘Expressions of thought intended to criticise shall not constitute a crime’] means that any critical expression is outside its scope.”

Putting to one side the contextually minor issue of whether Turkey has moved down a gear in its continuing reforms, the country, which straddles Europe and Asia, needs to move up a gear in communicating the benefits for other EU members of its integration into the union. These include its high GDP growth rates, averaging 7.5% a year since 2002, a growing middle class with an appetite for European-manufactured goods and services, and a young and fertile workforce. The EU is Turkey’s main trading partner and, as the WEF points out in a recent report, the country can play a risk-mitigating role in the energy field as an energy transport hub, is a valued security partner through its 50-year membership of NATO and has good relations “across a wider region on which European states depend but over which they have relatively little direct influence”.

Joaquín Almunia, the European commissioner for economic and monetary affairs, said at the WEF that Turkey’s accession would benefit the EU: “To become a relevant player in the world, you need size, labour, internal markets; you need to be able to include diversity.”

Different perspective

Mr Erdogan, however, does not seem to be aware of the need for a big push on the communications front. He notes that many people do not realise that Turkey is a European country, that the flow of goods to the EU is itself a form of communication and that the country has taken all the necessary steps to fulfil the Copenhagen criteria on accession. But he does suggest that cultural activities and the four million Turks living in Europe could be used to improve relations.

At the WEF meeting, Muhtar Kent, president of Coca-Cola, the world’s largest beverages company, instead underscored the need to brand Turkey, and change perceptions by having the government partner with both Turkish companies and international companies to send out a positive message.

The fact that the three partners are half way there can be seen in the creation of a new $4.5m chair in Contemporary Turkish Studies at the European Institute of the London School of Economics, funded by the government, the central bank, business conglomerates such as Akfen Holding and Dogan Holding, as well as TOBB, an umbrella organisation for commodity firms and chambers of commerce.

Various governments have put forward an alternative scenario to Turkey’s full membership of the EU in the past few years: a ‘privileged partnership’. A prominent European minister of finance appears to support this view when he tells The Banker in an interview: “It is difficult to have Turkey as a member and just as difficult not to have Turkey as a member.”

Mr Erdogan vehemently disagrees. “There is no such condition, you are either a member of the EU or not. The suggestion of a privileged partnership is discriminatory. To introduce a new form would be very improper. Turkey has been associated with the EU for the past 43 years, the 10 since 1996 as part of a customs union. In 1999 at Helsinki, the Turkish candidature [was agreed] and in 2004 accession talks were agreed,” he says. No date has been set for accession.

The obvious difficult issues to do with full membership – extension of the common agricultural policy and labour mobility – can be negotiated, say those who support Turkey’s accession. After all, the latest full recruits to the EU ranks, Bulgaria and Romania, have had restrictions imposed on the access of their labour force to the single market.

Geopolitical case

Ultimately, as Coca-Cola’s Mr Kent pointed out, Turkey’s accession to the EU is different from that of countries like Poland because Turkey’s case must be looked at geopolitically, as an island of stability in a region that is paradoxically more unstable. (Interestingly, Deutsche Bank noted in a report that if Turkey’s growth rates continued, by 2015 its economic development would be at the level of Poland pre-accession in 2004.)

It is also different because Turkey is a proud nation that is arguably large enough to stand on its own, and one in which support for EU membership fell from 70% in December 2004 to 54% in recent polls by the European Commission, while nationalism is on the rise, partly in response to foreigners taking control of Turkish companies.

Mr Erdogan blames the 16 percentage points drop in support on issues like Cyprus. “If there are some political demands made that are not within the criteria, it creates some downward pressure on public opinion,” he says.

Election prospects

The decreasing support is also due to reform fatigue, which will hit Mr Erdogan’s party in the run-up to presidential elections in May and general ones in November. Polls show that his party will no longer have a majority in the national assembly. There is also the question of whether he will run for president: he says he will “not speak until April 15, when the candidature for president will be announced. Our party is a big group. We will have to work in our group and talk to other political parties and perhaps [look at] some relevant opinion polls”.

His becoming president would play to those who accuse him of an Islamist agenda. In that role he could, according to the Turkish constitution, “submit to referendum, if he/she deems it necessary, legislation regarding amendment of the constitution”. It would also deal a major blow to Turkey’s EU accession, which needs all the forcefulness and popularity of this articulate prime minister.

Last May, the Turkish prime minister played a football match as a member of the team captained by Austrian chancellor Wolfgang Schüssel, who has been vociferous in his opposition to Turkey becoming a full member of the EU. Mr Erdogan, a former semi-professional football player, scored three out of the nine winning goals on Austrian soil. That Vienna match is also a powerful symbol.

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Karina Robinson

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