The evolution of Islamic Finance. The case of Turkey

12 1.2 Turkey and the European Union Since the association agreement signed by Turkey and Europe in 1963, EU economic relations with Turkey have improved systematically, and today, the country appears much more integrated with main European trade and economic networks. On a superficial level, the analysis of E.U. politicians about Turkish membership is still divided between those who are sceptical and those who are in favour. Religious beliefs and geographical position are the main points against the membership, while economic and trade considerations are the main points in favour. In any case circumstances are much more complex than they might appear. In December 2004 the European Council decided unanimously to start accession negotiations with Turkey, “407 votes were in favour and 262 against" 8 . "The growing scepticism is reflected by the new negotiating framework formally agreed by the Luxemburg European Council and endorsed by the European Parliament in 2006. While accession is defined as the 'shared objective of the negotiations, the negotiations are defined as an open-ended process, the outcome of which cannot be guaranteed beforehand" 9 . One of the clearest examples of the functional opposition to Turkish membership is represented by those raising concern about shifting EU structural funds to Turkey, and the massive influence that a Turkish membership would have within European institutions. "too big, too poor [Turkey] to join the Union" stated a report of Germany’s European Parliament’s Christian-Democratic Party,. A document drafted in December 2012 by the European Commission agrees with the Luxembourg European Council conclusions of December 1997. However it was the Helsinki European Council which once and for all granted Turkey the status of candidate. The application would entail fulfilling various requirements in areas of common interests: “political reforms, alignment with acquis ⃰, dialogue of foreign policy, visas, mobility and migration, trade, energy, counter terrorism and participation in community programs" 10 . Especially in the field of energy, with a view to Turkey's development as a potential energy hub, the EU and Turkey started their cooperation with a number of important energy issues. Moreover, since 1995 Turkey and EU have formed a Customs Union, continuing to boost bilateral trade which totalled € 120 billion only in the 2011. “Turkey is the EU's sixth biggest trading partner, while the EU is Turkey's biggest. A bit less than half of Turkey's total trade is with the EU and almost 75% of the foreign investment that flows into Turkey with a strong high technology component comes from the EU" 11 . However Turkey decided not to implement the Customs Union leaving several trade issues unresolved, such as the abolition of technical barriers for trade, or restrictions on: import goods from third countries, state aid, enforcement of intellectual property rights, 8 Stefano Braghiroli, “An empirical assessment of MPE's voting behaviour on Turkey and Turkish membership”, Centre of the study of political change (CIRCAP), University of Siena, 2010. Osservatorio sui Balcani website. 9 European Commission 2005. 10 European Commission, Turkey 2012 progress report (October 2011-september 2012), Brussels 2012. p. 4. 11 Ibid. p. 5.