With or without EU, Turkey is rising

Like a game of high-stakes chicken set on the global stage, Turkey and the European Union have been locked in a tense standoff ahead of this week's deadline for Turkey to open its ports to Cypriot vessels or face consequences.

In a last-minute bid Thursday, the Muslim country looking to join the EU offered to provisionally open one port and one airport. But Brussels has deemed the concession insufficient and EU leaders appear likely to decide at a summit later this week to partially suspend talks on Turkey's membership.

As EU foreign ministers meet Monday to discuss the issue, some observers – particularly in Europe – see Turkey's stance as self-defeating obstinancy. But others say it is in fact fueled by a greater sense of self-confidence, the result of a surging economy and an increased sense of its own growing strategic importance, which may dampen the effects of any rupture with the EU.

"For the first time in my career I am seeing a Turkey that is quite calm and confident of itself," says Kemal Kirisci, director of the European Studies Institute at Istanbul's Bogazici University. "There is an element of confidence that is beginning to permeate the Turkish economy, and a bit of politics as well, and I see this confidence starting to permeate the Turkish foreign ministry. This is very healthy for Turkey and for the European Union."

Economically, Turkey has never been more part of Europe. Some of Europe's most venerable brands, from Bosch to Fiat and Renault, are today being manufactured in Turkey, which has grown to become the largest exporter of televisions to Europe.

But the continent's interests in Turkey may lie beyond the marketplace, experts say. With its strategic location between Europe and Asia, Turkey can act as a key conduit for delivering important goods to Europe, from Central Asian oil and natural gas to greater political influence in the Middle East. In addition, Turkey's young population could ultimately boost the productivity of a graying European population.

Mired in a deep financial crisis only a few years ago, Turkey's economy has been growing at a rate of some 7 percent for the last three years, while its formerly triple-digit inflation has been tamed to a manageable 10 percent. If it were to join the EU right now, Turkey would be the sixth-largest economy in the 25-member organization.

"Both in finance and trade, Turkey is already a big part of Europe," says Murat Yucer, an economic analyst in Istanbul. "Turkey is a big market. Ultimately, it's a solid growth story."

All of this has been attracting an increasing number of European investors, despite tensions between EU countries and Turkey.

Analysts point out that during a recent political crisis between Turkey and France over the French lower house of parliament's approval of a bill that would make it a crime to deny that the mass killings of Armenians by the Ottomans were a genocide, French businessmen worked hard to distance themselves from the legislators' actions.

"[European business leaders] see Turkey as a very interesting and growing market that has a lot of opportunities," says Felix Howald, Europe director for the World Economic Forum (WEF), a Geneva-based organization that brings together leaders from business and politics.

A WEF report issued ahead of a recent high-level summit in Istanbul stated: "Turkey is perceived by many as a source of risk to Europe; it may be just the opposite, a potential source of major risk mitigation."

"Europe needs to look at Turkey in the context of the wider global risks facing it in the future."

Reacting to the possibility of the EU negotiations being partially frozen and of Turkey being forced to abandon the negotiating table, Turkish Prime Minister Recep Tayyip Erdogan said Europe would be making a "dreadful mistake."

"Europe, not Turkey, would stand to lose," he said this week, adding that Turkey would still continue to pursue its membership goal, although it has a Plan B and C.

Mr. Erdogan didn't specify what those other plans are, but observers in Turkey believe Ankara can't afford to cast aside its engagement with Europe, no matter how rocky the relations.

Hugh Pope, an independent analyst based in Istanbul, says that even Turkey's growing involvement in the Middle East – often seen as laying the groundwork for an EU alternative – is predicated on the perception that predominantly Muslim Turkey is on the path to joining the European big leagues.

"The relationship is really important for Turkey's power. Even if it's not going anywhere, it needs to be seen as going somewhere," says Mr. Pope. "Turkey has always got to maintain the illusion that the European process is in motion. It will never repudiate Europe."

But Bahar Rumelili, an expert on Turkey-EU relations at Istanbul's Koc University, says the negotiations are as important for Brussels' image.

"For the EU, a healthy relationship with Turkey conveys the image of the EU as an inclusive organization and an international actor that is able to promote change and reform," she says. "There is a growing realization from the European side that to alienate Turkey would be a big mistake. It would damage a major part of the EU's image as an international actor."

The forces of public opinion and political expediency might still get in the way, however, with European politicians certainly giving the impression that they are happy to alienate Turkey.

French conservative presidential hopeful Nicholas Sarkozy kicked off his candidacy by declaring that "Turkey's place is not in the EU." German chancellor Angela Merkel has also made clear her desire to deny Turkey full membership. In that sense, some say a cooling-off period between Turkey and the EU might be a positive thing, particularly with public opinion in some European countries decidedly against Turkey's membership.

"I think a pause is absolutely vital at this moment because the European public is up in arms," says Pope.

"I think that Europe has to catch up with itself."