Select Committee on Foreign Affairs Minutes of Evidence

Memorandum from the Foreign and Commonwealth Office


  1.  The Foreign and Commonwealth Office responds to a request from the House of Commons Foreign Affairs Select Committee for a memorandum in connection with the Committee's inquiry into the United Kingdom's relations with Turkey, including reference to European defence structures and Turkey's prospects for accession to the European Union.

2.  The memorandum is in ten sections, opening with the Government's objectives in developing UK/Turkey relations and then summarising certain key issues. Four annexes detail the UK diplomatic presence in Turkey; visa operations; chronology of Turkey's EU candidature and UK/Turkey trade figures.


  3.  Turkey is a Parliamentary republic. President Sezer took office in May 2000. The present three-party coalition government, led by Prime Minister Bulent Ecevit of the Democratic Left Party (DSP), has been in office since 1999. Elections are due in 2004.

  4.  Turkey is a country of great importance to the UK as a NATO ally and candidate for EU membership, with whom we have close commercial and other relations. The significance of Turkey's geographical position (bordering the Balkans, the Southern Caucasus and the Near East) has been underlined by the events since 11 September. Turkey has played a full part in the international coalition against terrorism, offering a range of support and assistance. The Government welcomes Turkey's offer to succeed the UK as lead nation for the International Security Assistance Force in Kabul later this year. The Foreign Secretary visited Ankara in October 2001 and has held talks with the Turkish Foreign Minister in the margins of several international meetings since then.


  5.  In developing the UK/Turkey relationship, the Government seeks to:

    —  work closely with Turkey as a NATO ally to achieve shared foreign and security policy objectives;

    —  ensure Turkey (and other non-EU European allies) have the fullest possible opportunity to be involved in EU-led crisis management operations as part of European Security and Defence Policy (ESDP);

    —  encourage Turkey's progress towards meeting the Copenhagen political and economic criteria (including on human rights) as a necessary condition before EU accession negotiations can be opened;

    —  work with Turkey to strengthen the search by the parties in Cyprus for a comprehensive and durable settlement;

    —  support, through the IMF, economic recovery in Turkey, and the development of a stable market economy; and encourage improvements in the legislative and regulatory framework which promotes and protects investment in Turkey;

    —  co-operate with Turkish law enforcement agencies to combat international crime, particularly the flow of drugs/illegal immigrants through Turkey to the UK;

    —  co-operate with Turkey over Operation Northern Watch in northern Iraq;

    —  build a healthy UK/Turkey trading relationship, providing opportunities for British business and investment.

  The official resources deployed to promote UK interests and achieve these objectives are outlined in Annex A.

  6.  The UK provided £1.6 million in bilateral project support to Turkey in 2001-02. This covered a range of projects under the UK/Turkey Action Plan designed to help Turkey prepare for EU membership and projects dealing with the environment; tackling the drugs menace; encouraging the development of civil society (including respect for human rights). This figure also includes funds supporting a thriving Chevening scholarship programme. The EU disburses approximately 177 million Euro annually in Turkey, to which Britain contributes its normal, substantial share.


European Defence

  7.  The Government welcomes the participation of Turkey and the other five non-EU European allies in EU-led crisis management. The six benefit from the Nice European Council arrangements, which enable them to be consulted about and involved in the European Security and Defence Policy (see Annex VI of the Presidency Report to the Nice European Council in December 2000).

  8.  Following Nice, Turkey raised a number of questions about how these arrangements would be implemented, and concerns that ESDP might be used in Turkey's geographical area, or in circumstances where Turkey judged her national interests were at stake, without Turkey having the right to participate in EU decisions. Until these were satisfied, Turkey was unwilling to agree to arrangements offered by NATO in the Washington NATO summit conclusions of April 1999 (known as "Berlin Plus"), which would, inter alia, allow the EU assured access to NATO operational planning, and presumed access to NATO assets and capabilities.

  9.  Over the course of 2001, the UK and Turkey, assisted by the US, negotiated a technical text clarifying the implementation of the Nice arrangements. On 2 December the Turkish Government agreed the text. EU Member States are now considering the text. Most have already indicated that they can support it. We hope to see its adoption in the next few months, followed by the adoption in NATO of Berlin Plus. This would strengthen the links between the EU and NATO on military crisis management.

  10.  Improving the military capabilities available for EU-led crisis management operations remains a high priority. Turkey has made welcome and generous contributions to the EU's military target—the Helsinki Headline Goal—and attended the Military Capabilities Improvement Conference as well as the Police Capabilities Conference in November 2001.

EU Accession

  11.  The Helsinki European Council in December 1999 confirmed Turkey as a candidate to join the EU on the same basis as all other candidates and set out a pre-accession strategy which aims to help Turkey meet criteria for membership set out at the Copenhagen European Council in 1993. The pre-Accession strategy includes an Accession Partnership; enhanced political dialogue, and preparations for screening.

(i)  The Accession Partnership

  12.  The EU's Accession Partnership (AP) with Turkey sets out in a single framework the priority areas for further work needed for Turkey to meet the criteria for accession, the financial means available to help implement these priorities, and the conditions applying to that assistance. Turkey has in turn reflected these priorities in their National Programme for the Adoption of the Acquis (NPAA) of March 2001.

  13.  In December 2001, the EU formally adopted the last two elements of the pre-accession strategy agreed at Helsinki: Turkish participation in Community programmes and agencies on the same basis as other candidates; and a single financial framework for assistance to Turkey, with funds focused on Accession Partnership priorities.

(ii)  Enhanced political dialogue

  14.  Discussions are held at Ministerial level in the EC-Turkey Association Council; at senior official level in the Association Committee; and in regular meetings of Turkish and EU Political Directors.

(iii)  Preparations for screening

  15.  The Commission's 2001 Regular Report proposed a detailed and in-depth comparison of Turkey's legislation with the EU acquis. The combination of the Accession Partnership and enhanced political dialogue and are helping to bring closer the prospect of full screening of Turkey's legislation compared with the acquis.

  16.  The Commission's 2001 report, published in November, concluded that Turkey had not yet met the Copenhagen political or economic criteria (all candidate countries must meet at least the political criteria before accession negotiations can begin.) The constitutional reforms adopted in October 2001 are a positive step towards meeting the political criteria. Progress towards meeting the economic criteria had been hindered by economic crises in late 2000 and February 2001.

  17.  The UK has consistently supported Turkey's candidacy for EU membership and the pre-accession strategy agreed for Turkey at the Helsinki European Council, both in discussions with EU partners, and through practical advice and assistance. We welcome the constitutional reforms Turkey adopted in October 2001 and look forward to the implementation of these reforms, and to additional reforms to meet the Accession Partnership short-term priorities on the political criteria in full. Through our own "EU-Turkey Action Plan", and through support for the EU's pre-accession strategy, we will continue to assist Turkey's efforts in this regard.

  18.  We welcome the Commission's proposal in its latest progress report for a detailed programme of legislative scrutiny. We believe this will take forward Turkey's candidacy in a concrete, practical way.

  19.  We welcome the conclusions of the Laeken European Council, which acknowledged Turkey's progress towards meeting the political criteria and noted that "this has brought forward the prospect of the opening of accession negotiations with Turkey."


  20.  The current UN process, aimed at securing a comprehensive settlement to the Cyprus problem, began in December 1999. Following five meetings in proximity format in 2000, in November the Turkish Cypriot leader Mr Rauf Denktash withdrew from the talks and said that he saw no point in negotiating until the reality of two States was accepted, although he made it clear that he still supported the UN Secretary General's Good Offices Mission. The UN, with strong support from the UK and US, said that any talks must be based on Security Council Resolution 1250 (no preconditions; all issues on the table; commitment in good faith to continue to negotiate until a settlement is reached; full consideration of relevant UN resolutions and treaties).

  21.  In November 2001 Mr Denktash invited President Clerides to meet face to face on the island. President Clerides accepted, while insisting on a UN presence. The two leaders met on 4 December and agreed to start face-to-face talks, again on the island, with no preconditions, under UN auspices in mid-January 2002 to run until at least June. Alvaro De Soto, (UN Secretary General's Special Adviser on Cyprus) described the leaders' first such meeting on 16 January as an encouraging start. President Clerides and Mr Denktash have agreed to meet three times a week.

  22.  Cyprus is a leading candidate for accession to the EU. Turkey has questioned the legality of Cyprus' application, but we are satisfied that there are no legal obstacles to that application. The UK strongly believes that it is in the best interests of all concerned that a reunited Cyprus should join the EU, but supports the conclusions of the Helsinki European Council, which stated that a settlement is not a precondition for Cypriot accession. We welcome recent assurances by the Commission and the General Affairs Council, endorsed by the Laeken European Council, that the provisions of a UN settlement can be accommodated within the terms of Cyprus' EU accession.

  23.  Lord Hannay is the UK Special Representative for Cyprus. Since his appointment in 1996 he has worked to support UN efforts to achieve a settlement. Lord Hannay is in close contact with all the parties and others involved such as the United States, the European Commission and the Special Representatives of other states.

Human Rights

  24.  The Government believes that the formal recognition of Turkey as an EU candidate at Helsinki in 1999 has led to some improvement in human rights in the country; for example, priorities under the NPAA (see paragraph 12 above) include improving prison conditions to meet international norms, and measures to eradicate torture. However, there are still areas of concern, and the Embassy in Ankara and the Consulate General in Istanbul monitor human rights issues closely. We support a large number of human rights projects. Examples from 2001 include:

    —  Translation into Turkish of the FCO Handbook on Prevention of Torture.

    —  A training programme for Senior Prison Administrators in Turkey.

    —  Independent monitoring of prisons in Turkey.

    —  Development of Prisoner Education and Recreation Programmes.

    —  Training for the Jandarma (military police) in Custody, Detention and Public Order Policing.

    —  Forensic Science Training for the Jandarma.

  25.  This year will see the launch of a Human Rights Dialogue at senior official level between the UK and Turkey. Progress in reform continues to be monitored closely by the UK and EU.


  26.  Sustainable economic growth and development are prerequisites for further Turkish integration in the global economy. The UK continues firmly to support IMF-backed efforts to implement economic and structural reforms in Turkey.

  27.  Throughout the 1990s, Turkey experienced high inflation, budget deficits and a depreciating currency. In December 1999, the Turkish Government signed an agreement with the IMF, tied to a Stand-By Arrangement loan of $3.7 billion, to implement a macroeconomic stabilisation programme, and begin the process of structural reforms. Under the agreement, the Turkish lira was pegged to the US dollar. Economic growth through most of 2000 was high, whilst inflation fell sharply.

  28.  However, in November 2000, a sudden decline in interbank lending and resultant liquidity squeeze prompted central bank action. But the crisis only abated after the IMF intervened with a $7.5 billion loan under its Supplementary Reserve Facility, and the Government reaffirmed its commitment to economic reforms.

  29.  A further crisis in February 2001 led the government formally to abandon the lira/US dollar peg (a core element of the IMF programme). The lira immediately fell by 30 per cent and continued to slide to the point where it has lost half its year-on-year value.

  30.  The Government appointed a new economic team led by Mr Kemal Dervis as Finance Minister, and announced its intention to negotiate a new economic plan with the IMF. Agreement was reached in May. The IMF agreed to provide an additional $8 billion under a Stand-By Arrangement. The authorities committed themselves to a wide range of structural reforms, including liberalisation measures, banking sector consolidation and privatisation of large state entities, a tight monetary policy, and further fiscal stringency.

  31.  A number of reforms have been implemented, including a law to make the central bank independent and the forced closure of insolvent banks. However, more needs to be done. Meanwhile, inflation has risen following the depreciation of the lira, output has fallen, and interest rates have risen to punitive levels, putting heavy pressure on Government finances and the country's public debt burden.

  32.  In the aftermath of the 11 September attacks on the United States, Turkey's financial position deteriorated further, and the IMF has now agreed in principle to provide an additional $10 billion in support in 2002. It is hoped that growth will return in 2002; that inflation will fall; and that debt sustainability will be assured. Recent economic data suggests that the economy may have bottomed out.

Drugs/Illegal Immigration

  33.  Opium poppy is produced legally in Turkey under the supervision and guidance of the International Narcotics Control Board, and there is no evidence of leakage from the licit to the illicit market. Turkey has the lowest per capita opiate abuse rate in Europe. However, Turkey is a key heroin transit and processing country on the supply route from Afghanistan to Western Europe: the vast majority of heroin used in the UK transits Turkey. Individual Turks and Kurds, and gangs of them, are heavily involved in the heroin trade in the UK and other western European countries. We are working with the Turkish Government to increase awareness and to improve co-operation in combating this damaging trade.

  34.  Our missions in Turkey continue to develop links with all the local law enforcement agencies (LEAs). Record seizures of heroin (5.2 tonnes) in 2000—much higher than any seizure rates in western European countries—reflect these agencies' efforts. UK-Turkish counter-drugs co-operation has made a contribution to these seizures.

  35.  Between 1994 and 1999, the UK funded £600,000 of bilateral counter-drugs assistance. We expect to provide a further £300,000 of training and equipment during 2000-01. We are also considering a contribution of £500,000, through the United Nations Drug Control Programme, to programmes at the Turkish Academy Against Drugs and Organised Crime.

  36.  Two other aspects of international crime in Turkey are important to the UK: people smuggling and money laundering. Many of those illegal immigrants not intercepted in Turkey make their way to western Europe and some to the UK, aided by local people-smuggling groups with links to south east Europe. The UK is considering assistance in the form of training and detection equipment. Money laundering is an adjunct to the drugs trade and drug-related money flows to and from Turkey are considerable. We believe that existing anti-money laundering legislation could be tightened, particularly in respect of the disclosure of suspicious transactions to the authorities.


  37.  The Turkish Government has asked the EU to add nine organisations operating in Turkey to its Common Position list of terrorist organisations (for asset freezing and other Law Enforcement co-operation measures). The EU has not included these groups in its initial list of terrorist organisations, as it has thus far only considered proposals from EU member states. However, the list will be reviewed regularly, and the Turkish proposals will be considered. The UK has proscribed two of these groups, the PKK (Kurdish separatist) and DHKP-C (militant Marxist-Leninist) under the Terrorism Act 2000 and both have been included on our domestic asset freezing lists. Both groups have applied to be removed from the UK's proscription list. The Home Secretary recently rejected the PKK's application. The PKK have applied for judicial review of the original decision to proscribe them. The UK supports the inclusion of both groups on the EU list.


  38.  Turkey shares our concern to maintain the territorial integrity of Iraq and supports UK/US operations in the northern No Fly Zone (NFZ) established in 1991 in support of UN Security Council Resolution 688 which called on Iraq to end repression of Kurds and other minority groups in the north. Under Operation Northern Watch, RAF and USAF aircraft are based at Turkey's Incirlik airfield and patrol the northern NFZ, north of the 36th parallel. Turkish Parliamentary approval is required every six months to extend Operation Northern Watch —the most recent extension was granted in December 2001.



  39.  A major campaign "Turkey: Positioned for business" (1998-2000) raised UK awareness of opportunities in Turkey. UK exports grew by 48 per cent to £1.86 billion in 2000. In common with most EU partners, the UK's exports have however dropped by some 30 per cent in 2001 following the economic crisis, and the devaluation of the Turkish lira. But Turkey will remain an important market, and we are continuing to promote specific sectoral opportunities, eg in the energy, environment and water sectors, so that British firms are well placed to take advantage of opportunities as the economy picks up.


  40.  Total Foreign Direct Investment approved in 2000 was $3.06 billion ($1.7 billion in 1999). The leading foreign investors are France (20 per cent), Germany (13 per cent), USA (11 per cent), The Netherlands (11 per cent), and Switzerland (7.5 per cent). Following HSBC's purchase of Demirbank in October 2001, the UK became the sixth largest foreign investor in Turkey (7.4 per cent). British firms cover a wide range of sectors, with over 330 British companies investing.

  41.  The UK is now the largest recipient of Turkish direct investment (cumulative total Turkish investment in the UK until the end of 1999, US $523 million).

Turkish/British Business Council

  42.  The Turkish/British Business Council is a joint council administered by Trade Partners UK on the British side and by DEiK, the Turkish foreign economic relations board, for the Turkish side. The last Annual General Meeting was held in London in December 2001; the next meeting is expected to be in Turkey in late 2002. The UK co-chairman is currently Bill Alexander, Chief Executive Officer of Thames Water.


  43.  Total ECGD exposure to Turkey is £834 million. Most of this relates to business with the public/government (sector (£780 million). However there is a modest exposure (£54 million) to the corporate sector (mainly the banks). 98 per cent of UK exports to Turkey do not rely on ECGD support. Since the financial crises of November 2000 and February 2001, ECGD business with Turkey is considered on a case-by-case basis.

Ilisu and Yusufeli

  44.  These two hydroelectric projects are part of Turkey's attempt to address its need for more generating capacity. Other power sources are also being developed. Both projects could benefit Turkey as a whole and provide development opportunities for the local populations, but give rise to difficult environmental and social issues. Major areas of concern are resettlement (both); downstream flow & relations with downstream states (both); water quality (Ilisu); archaeological/cultural impact (Ilisu).

  45.  Ilisu is a 1200mw hydroelectric project on the river Tigris around 60km north of the border with Syria and Iraq. The UK contractor Balfour Beatty has withdrawn from the project, so there is no current application for ECGD support. Yusufeli is a 680mw hydroelectric project on the river Coruh near the border with Georgia. The UK contractor is AMEC. UK export value: $100 million. Other countries considering export credits are France (lead contractor), Belgium, and Spain. The export credit agencies have identified a number of environmental and social concerns where further information is required. Before agreeing export credit support ECGD will wish to be assured that these concerns have been properly addressed and that the project meets ECGD's risk standards.

Foreign & Commonwealth Office

January 2002

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