Ali Hakan Kara At the end of 2004, the European Council decided that Turkey should be a candidate country for membership of the European Union and that accession negotiations would start in late 2005. Needless to say, the start of accession negotiations is only the beginning of a rather lengthy process. A lot remains to be accomplished for Turkey to join the EU. That is why for some of us Professor De Grauwe’s chapter may seem rather abstract. However, these ideas are by no means purely academic issues for Turkey. Although Turkey is still in the pre-EU membership phase of the process that leads to the eventual adoption of the euro, some of the challenges that have been set out in the chapter apply to Turkey even at this early stage. To name one, we may have been observing Balassa–Samuelson type eﬀects in the recent period. In my discussion, ﬁrst I would like to summarize the challenges and preconditions that the new and future members are likely to face on the path to the euro, which, I believe is only brieﬂy mentioned in the chapter, due to space limitations. The general policy prescriptions for progress towards monetary union and ERM participation in particular are now broadly accepted: countries should build a consistent set of credible economic policies aiming at stability and preserving competitiveness. Of course, these will require continued and demanding eﬀorts to implement the appropriate macroeconomic policies and the necessary structural reforms. Three elements are...
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