EMU, EURO and EU-Membership: An Evaluation from the Turkish Macroeconomic Perspective

As a result of the macroeconomic convergence process in the light of the 1991 Maastricht Treaty, the monetary union between most of the EU countries started on January 1, 1999. Meanwhile, ten formerly eastern block countries and the Southern Section of Cyprus are preparing their economy for a full-membership to the EU while Turkey, as an associate- member of the Union since 1963 and as a part of customs union between Turkey and the EU since 1996, seems to be excluded from the next EU enlargement process. Therefore, this paper mainly intends to discuss the following two interrelated questions: (1) How far is Turkey different than the 11 membership candidate countries and the EU countries in terms of the ten selected macroeconomic indicators (1973-1997)? (2) To what extent will the introduction of the euro affect the balance-of-payments accounts and foreign exchange rates in Turkey? (Version: May 2000)