Argument: Turkey is likely to be a major funding strain on the EU

Issue Report: Turkey EU membership


“Turkey’s Membership Application: Implications for the EU”. Jean Monnet/Robert Schuman Paper Series. Vol. 5 No. 26. August 2005 – Another dimension to the perceived threat is that the combined effect of Turkey’s size, economic underdevelopment and economic structure are likely to result in it being a major beneficiary of EU funding Programmes on accession, thus creating budgetary problems. Naturally, so far in advance of Turkey’s possible entry, estimates of the budgetary implications are necessarily extremely hazy. Much depends on the extent to which existing EU ‘spending policies’ remain in their present form, the levels of economic growth in Turkey, and the time periods over which Turkey becomes a beneficiary of the spending policies – there is a ten year phase-in period in the case of the EU-10 states (the states which became members in May 2004) and the Common Agricultural Policy (CAP). Certainly, however, if major changes from the present state of affairs do not occur and if extended phase-in periods are not agreed, then the budgetary implications are very considerable, with Turkey set to become a major recipient of EU funding. To take the two major areas of EU funding, the CAP and cohesion policy: agriculture currently accounts for just over one third of Turkey’s labor force, while agricultural output generates 12.2 per cent of GDP (the corresponding figures for the EU- 25 are 5 per cent and 2.2 per cent); the whole of Turkey would currently qualify for Objective 1 Structural Fund support (that is, throughout the country the GDP per capita is below 75 per cent of the EU average). As an indication of the scale of the budgetary issues that have to be addressed in respect of Turkey, the Commission has estimated that, on the basis of the existing acquis and assuming there is a ten year phasing-in of direct payments, Turkish membership could cost about €30 billion per annum at 2004 prices (European Commission, 2004: 46-7). This is equivalent to about one quarter of the current budget!