Cover -- Title Page -- Contents -- Acknowledgments -- Disclaimer -- List of Contributors -- Acronyms and Abbreviations -- Overview -- Macroeconomic Developments and Prospects -- Sectoral Reform Challenges -- Agricultural Markets and Incomes -- Manufacturing -- Market Access and Regulatory Issues -- Telecommunications Sector -- Banking -- Energy -- The Complementary Implications and Challenges of Reform -- Toward an Assessment: Net Effects on Turkey -- Effects of Turkey's Accession on the EU -- Decision Making -- Migration and the EU Budget -- Implications for Other Developing Countries -- Conclusion -- Notes -- References -- PART 1 Macroeconomic Policies for EU Accession -- 1 Macroeconomic Policies for Turkey's Accession to the EU -- Introduction -- Macroeconomic Developments in Turkey -- Monetary Developments and Inflation -- Real Exchange Rate and Current Account -- Fiscal Developments -- Public Sector Borrowing Requirements and Public Debt -- Structure of Taxes -- Employment and Growth -- Macroeconomic Policy Framework for EU Membership -- Macroeconomic Policy Framework for EMU Members -- Monetary Policy -- Fiscal Policy -- Exchange Rate Policy -- Macroeconomic Policy Framework for Accession Countries -- Preaccession Phase -- From Accession to Adoption of the Euro Phase -- Euro Area Phase -- Prospects for Central and Eastern European Countries -- The Macroeconomic Challenges Facing Turkey -- Inflation -- Public Debt and Fiscal Policy -- Sustainability of Current Account -- Employment and Growth -- Exchange Rate Policy -- Conclusion -- Notes -- References -- PART 2 Agriculture, Manufacturing, Services, and Network Industries -- 2 Analysis of the Impact of EU Enlargement on the Agricultur al Markets and Incomes of Turkey -- Introduction -- Agricultural Situation -- Agricultural Policies in Turkey.

Output Price Supports, Input Subsidies, and Supply Control Measures -- Agricultural Trade Policy -- Agricultural Reform Implementation Project -- Estimates of Support in Agriculture -- The Common Agricultural Policy of the EU -- Common Organization of Market -- COM for Cereals -- COM for Oilseeds -- COM for Sugar Beet -- COM for Fruits and Vegetables -- COM for the Wine-Growing Sector -- COM for Milk and Dairy Products -- COM for Beef and Veal -- COM for Ovine Meat -- Future Evolution of the CAP -- Reforms from the Mid-term Review and Future Directions -- Beyond the Mid-term Review -- Impact of Introducing the Common Agricultural Policy in Turkey -- Impact on Producers -- Alternative Agricultural Policy Options for Turkey -- Effects of Policies on Producers' Incomes in the Medium Term: Adjusting for Supply Response Effects -- Impact on Consumers -- Impact on the State Budget -- Welfare Effects -- Institutional Development and EU Accession -- Implementing Agencies for Agricultural Policies -- Status of Implementation of the Acquis in Agriculture -- Adoption of the Common Market Organizations -- Implementation of the Integrated Administration and Control System of Payments -- Food Safety and Quality Standards -- Trade and Border Control -- Conclusion -- Annex -- Notes -- References -- 3 Integration and the Manufacturing Industry -- Introduction -- Main Developments in Turkey's Trade Regime -- Structure of Protection -- Contingent Protectionism -- Technical Barriers to Trade -- The EU Approach to Technical Barriers to Trade -- Mutual Recognition Principle -- Harmonization of National Regulations and Standards -- Conformity Assessment and Market Surveillance -- Coverage of EC Technical Regulations -- Turkish Policies and Approaches -- Technical Barriers and Trade between the EU and Turkey -- Conditions of Competition -- Conclusion -- Notes -- References.

4 Accession of Turkey to the European Union: Market Access and Regulatory Issues -- Introduction -- The Customs Union -- A Quantitative Assessment -- A Factor Analysis of Regulatory Structures -- Summary and Conclusions -- Annex 1: Tariff Equivalents for Transport Services -- Annex 2: The Model -- General Structure -- Dynamics -- Taxes and Policy Variables -- Trade and Transport Costs -- Production Structure -- Composite Household and Final Demand -- Labor Markets -- Notes -- References -- 5 The Turkish Telecommunications Sector: A Comparative Analysis -- Introduction -- A Quantitative Comparison -- Competition Policy and Regulation -- Privatization of Türk Telekom -- Legal and Institutional Comparisons with the EU -- Framework -- Authorization -- Access -- Universal Service -- Price Regulation -- Conclusion and Recommendations -- Annex: Price Comparisons -- Annex -- Notes -- References -- 6 Accession to the European Union: Potential Impacts on the Turkish Banking Sector -- Introduction -- The Restructuring of the Turkish Banking Sector and Related Fiscal Costs -- The Bank Restructuring Strategy -- Banking Sectors in the EU and Turkey: A Comparison of Structural Indicators -- Concentration Ratio, Entry to the Sector, Public Share, and Capital Adequacy -- Deposit Insurance -- Number of Banks, Average Size, and the Staff Employed -- Asset, Deposit, and Loan Indicators -- Profitability -- Income, Expenditure, and Cost Structure -- Asset Quality -- Share of Government Debt Securities -- Financial Strength Ratings -- Foreign Bank Entry -- Compliance with EU Banking Legislation -- Adoption of the Capital Adequacy Directive -- Conclusion -- Annex 1: Banking Sector Statistics-The EU, New Member States, and Turkey -- Annex 2: EU Banking Directives in Force, Main Issues -- Notes -- References.

7 Competition and Regulatory Reform in Turkey's Electricity Industry -- Introduction -- Characteristics and Evolution of the Industry -- Regulatory Reform in the EU -- The Electricity Directive of 1996 -- Market Opening -- Unbundling -- Third Party Access -- Public Service Obligations (PSOs) -- Progress with Implementation and Proposed Amendments -- The Current Structure of Turkey's Electricity Industry -- Background -- The Current Model -- Market Opening -- Unbundling -- Third Party Access -- Market Design -- Privatization -- Vesting Contracts -- Public Service Obligations -- The Independent Regulatory Authority -- Main Challenges -- Stranded Costs and Competition in the Generation Market -- Revenue Deficits, Technical Losses, and Private Participation in Distribution -- Tariff Rebalancing, Social Protection, and Industrial Competitiveness -- Wholesale Market Concentration and the Dominant Role of TETAS -- Interinstitutional Coordination and a National Electricity Policy -- Possible Competition-Enhancing Solutions -- Transitional Regimes for Tackling Stranded Costs -- Tariffs and Universal Service -- Cross-Border Trade and the Benefits of EU Accession -- Privatization and Entry Promotion Strategies for Generation and Distribution Assets -- Mitigating Wholesale Price Risk -- Developing Competition Where Possible -- Facilitating Effective Regulation -- Conclusion -- Notes -- References -- 8 Institutional Endowment and Regulatory Reform in Turkey's Natural Gas Sector -- Introduction -- The Present Situation in the Turkish Gas Market -- Import and Export Infrastructure and Future Developments -- Long-Term Purchase Contracts -- National Networks and Future Development -- Ownership and Industry Structure -- Turkey -- EU Emerging Gas Markets -- Greece -- Portugal -- EU Mature Gas Markets: The Italian Case -- Regulatory Reform in Turkey.

Comparative Analysis of Turkey's Gas Legislation -- Conclusion -- Notes -- References -- PART 3 Economic Challenges -- 9 Labor Market Policies and EU Accession: Problems and Prospects for Turkey -- Introduction -- Labor Market Policies, Institutions, and Economic Performance -- Labor Market Indicators for Turkey -- Turkey and EU Labor Market Policies -- The EU Law -- Primary Legislation -- Secondary Legislation -- Case Law -- Council Directives on Employment and the Turkish Labor Law -- European Employment Strategy -- The European Council Summits -- The 2002 Evaluation of the European Employment Strategy -- Streamlining Policy Processes -- The 10 Commandments, Targets, and Indicators -- EU Labor Market Policies and Enlargement -- Employment Protection and Labor Market Flexibility in Turkey -- Employment Protection Legislation -- Direct Measures of Labor Market Flexibility -- Problems and Prospects: An Assessment -- The Impact of the New Labor Law -- The Impact of Adopting and Implementing the Employment Acquis -- The Impact of Coordinating Employment Policies -- A Simulation Analysis -- Conclusions and Policy Implications -- Notes -- References -- 10 Turkey's Foreign Direct Investment Challenges: Competition, the Rule of Law, and EU Accession -- Introduction -- The Benefits of FDI -- The Role of FDI in Economic Growth -- The Role of FDI in Raising Productivity and Stimulating Spillovers -- The Current State of FDI -- FDI in Turkey and in Central and Eastern Europe: A Comparison -- Determinants of FDI -- Macro Policies, Infrastructure, and the Automotive Sector -- Macroeconomic and Trade Policies -- Infrastructure-Related Factors -- The Automotive Industry -- Governance and Institutions: Case Studies -- The Eurogold Investment -- Cargill Starch-Based Sugar Investment -- İş-TIM Mobile Telecom Investment.

Common Governance- and Institutions-Related Constraints.