Legal aspects of Turkey’s Accession to the European Union:
Temporary and Permanent Derogations from the EU’s EconomicAcquis?
Ronald H. van Ooik[1] and James H. Mathis[2]
DRAFT SEMINAR VERSION – NO CITATION OR USE WITHOUT PERMISSION OF THE AUTHORS
- Introduction
Accession of Turkey to the European Union is (still) a top priority for the country. In the 2008 National Programme of Turkey for the adoption of the EU acquis, for example, the vital importance of accession is formulated in the following terms:
Accession to the European Union is the principle project that will carry Turkey to its goal of prosperity. Turkey’s aim of integration with the European Union is a social reform project that will affect both the present and future of every citizen. It is a great reform movement that will bring universal standards and practices to all areas of daily life, from production to consumption, from health to education, from agriculture to industry, from energy to environment, from justice to security.
Accession to the European Union is a national target, supported by our people. This aim, which is also an integral part of Turkey’s strategic vision, fully corresponds to the founding philosophy of the Republic and Atatürk’s ideal for the nation’s integration with contemporary civilization.[3]
This paper surveys recent monitoring reports on Turkey’s ability to assume the obligations of EU membership, and then draws a comparative to the recent (2007) accessions of Romania and Bulgaria. For this purpose the recent (2008) Turkey Progress Report (PR)[4] is used for those chapters that are identified as ‘slow’ or ‘low’ alignment by the Enlargement Strategy Communication (ES) (2008).[5] These aspects are summarized and comparedto the same subject areas as they were taken up in the transitional arrangements annexed to the Accession Treaties for Romania and Bulgaria.[6]
In some instances additional context is drawn from the final monitoring reports for these countries from 2006. This gives an indication as to the progress achieved near the time of accession and the final recommendations for entering the accession treaties. For a balanced approach, we include regular references to the most recent National Programme for the adoption of the EU acquis, approved by the Turkish government.[7]
This should give us an idea of how far Turkeyhas to go in these core market areas in order to resolve a similar accession treaty with the EU that would have ‘comparable’ transitional arrangements. A caveat on this methodology can be noted at this point. The former state-controlled economies of Bulgaria and Romania are not economically similar to the market conditions in Turkey. Neither are the comparative candidates of similar size in their economies and foreign markets. This suggests that while it is instructive to compare the derogations and transitions on particular market subjects as between Turkey and these acceded countries, it is also possible that there are more extensive derogations in subject areas that are not particularly shown as problematic in the Turkey reports. An example of this might be the greater attention paid to privatization issues in the Bulgaria / Romania accession, as compared to what might be seen for Turkey in that same category.
2. The Enlargement Strategy report (generally) as to economic and market activities
The overall tone of the Enlargement Strategy Communication is positive as to Turkey’s economic situation from the more macro perspective:
Turkey is now a functioning market economy in terms of the Copenhagen economic criteria. It should be able to cope with competitive pressure and market forces within the Union in the medium term, provided that it continues to implement a comprehensive reform programme to address structural weaknesses.[8]
More specifically, as to the (33) Chapters of the acquis, Turkey’s ability to assume the responsibilities of EU membership, the Enlargement Strategy also notes a number of areas where ‘alignment is advanced’:
Turkey improved its ability to take on the obligations of membership. Progress was made in most areas. Alignment is advanced in certain areas, such as free movement of goods, intellectual property rights, anti-trust policy, energy, enterprise and industrial policy, consumer protection, statistics, Trans-European Networks, and science and research.[9]
The ES report, read together with the ‘Key findings in the Progress Report 2008 Turkey’,however notes the following areas in particular for additional attention: agriculture, fisheries, veterinary and phytosanitarypolicies, state aid, justice and home affairs, social policies and employment, environmental protection, public procurement, company law, food safety, and free movement of services. Moreover, a number of important obligations taken on by Turkey as part of its Customs Union with the EU remain unfulfilled.[10]
We will survey the most problematic of these Chapters, at least those in the economic sphere, from the 2008 Progress Report, and make a comparison to the transitional measures contained in the protocols from the two recent accession countries, Romania and Bulgaria. As was mentioned before, the purpose of doing this is the see what Turkey can learn during the current negotiation phase from past experiences, notably regarding the possibility to obtain temporary and/or permanent derogations from the Union’sacquis.
3. The Economic Chapters in the 2008 Progress Report
3.1Freedom of movement for workers (Chapter 2)
With regard to accessto the labour market, the 2008 PR points out that Turkish legislation on work permits for foreigners that eased procedures and exempted certain professionals from obtaining work permits, including people working on national and international projects, was vetoed and is still before Parliament. Efforts to strengthen the capacity of the Turkish Employment Agency (IŞKUR) continued. These concerned, in particular, IT infrastructure and training to allow job-matching services in an electronic environment. Further efforts are needed to prepare Turkey for participation in the EURES(European employment services) network.
For the co-ordination of social security systems, efforts to build the administrative capacity of the Turkish Social Security Institution continued. Appointment of medium- and high-level managers at central and provincial level also contributed to consolidation of this Institution. The efforts to build “one-stop-shop” social security centres in districts are continuing. There have been no developments as regards preparations for the introduction of the European Health Insurance Card.
The Commission, in its 2008 PR report, concludes that overall limited progress has been made is this area. Alignment is at an early stage. The administrative capacity needs to be strengthened further.
The 2008 Progress Report is thus silent on possible transitional measures regarding the free movement of workers. Still, on all previous occasions transitional arrangements on this sensitive freedom have been laid down in the accession treaties. In the treaties with the eight Eastern European countries that acceded on 1 May 2004, as well as in the accession treaties with Bulgaria and Romania, a transitional period of seven years was provided. This period can be subdivided into an initial period of 2 years, a subsequent period of 3 years and a final period of another 2 years.[11]
Until the end of the first two year period following the date of accession, the existing Member States will apply national measures (or those resulting from bilateral agreements) regulating access to their labour markets by Eastern European nationals. Before the end of this initial period, the Council shall review the functioning of the transitional provisions on the basis of a report from the Commission. Subsequently, the present Member States may continue to apply their restrictive measures until the end of the (2 + 3 =) five year period following the date of accession;[12] they only have to notify the Commission whether they will continue applying national measures or whether they will grant access to their labour market. After those five years, a Member State may continue to refuse access to its labour market for another two years, but only in case of “serious disturbances of its labour market or threat thereof” and after notifying the Commission. Hence, even for entering the final stage of the 7-years-transitional period, Member States do not need the approval from ‘Brussels’ but they can decide for themselves whether or not a ‘serious (threat of) disturbance’ exists.
Assessment – Given these previous experiences, it is almost certain that transitional measures regarding the free movement of workers will also be laid down in the Accession Treaty EU-Turkey. Hence, after accession EU workers will not be free to work in Turkey and –more importantly – Turkish workers will not have immediate free access to the labour markets of the ‘old’ EU Member States. Given the size of the Turkish working force, the duration of the transitional period may well be longer than 7 years – a period of ten years seems realistic and 15 years seems possible. As in the case with the Eastern European countries, this period will probably bedivided into three sub periods and the present Member States will not be required to seek the approval of the Commission for any extension within the overall period of the extension allowed.
Some argue that even a permanent derogation from the right of free movement for Turkish workers (and their families) is advisable. It should however be noted that free movement of workers, as being part of the broader free movement of persons, is one of the fundamental freedoms of the internal market.[13]This has been stressed by the European Court of Justice (ECJ) on many occasions.[14]From the legal point of view, such a permanent derogation negatively affecting workers from just one of the – by then probably some 30 - Member States does not seem acceptable. Although it must be added that the ECJ would probably not have jurisdiction to rule on the compatibility of the derogation for Turkish workers with the internal market provisions, given the fact that any permanent derogation would be laid down in the accession treaty which would have the status of primary Community/Union law.[15]
Finally it must be noted that free movement of Turkish workers is not entirely dependent on the forthcoming EU-Turkey negotiations: at present, under the current Ankara Association Regime and more specifically under Decision No. 1/80 of the EU-Turkey Association Council,Turkish workers enjoyimportant rights of equal treatment and residence once admitted by one of the Member States. Hundreds of questions from national courts of the EU Member States on the interpretation of Decision No. 1/80 (and some on Decision No. 3/80, concerning social security rights of Turkish workers) have reached the ECJ.[16]In its 2008 National Programme, Turkey proposes to not wait until full membership but to codify this important case law of the ECJ beforehand:
Decisions Nos. 1/80 and 3/80 of the Turkey-EU Council laying down the procedures related to the entry of Turkish workers and their families to the EU employment market and their wages and working conditions, need to be updated by taking into consideration the interpretations of the European Court of Justice. There is a need for new Association Council Decisions that will permit our citizens working legally and residing in member states to exercise the right to free movement without having to wait for Turkey’s full membership.
3.2. Right of establishment and freedom to provide services (Chapter 3)
For the freedom of establishment, the Commission contends that gender, nationality, residency,language, and other requirements, such as the one-office rule for pharmacists, continue to be incompatible with the acquis.
As regards freedom to provide cross-border services, registration, license or authorisation requirements also continue to be incompatible with the acquisin this specific area (i.e., notably, the Services Directive).[17] Firms already established in a MemberState are still subject to specific registration and authorisation requirements in Turkey. The same applies to service providers, who have to fulfil particular requirements in Turkeyin order to obtain the necessary work and residence permits.Work to identify obstacles to exercising the right of establishment and freedom to provide services has not yet started.
On the other hand, the Commission reports some progress in the area of mutual recognition of professional qualifications. A regulation on harmonisation of the minimum training requirements for regulated professions (medicine, nursery, midwifery, dentistry, veterinary medicine, pharmacy and architecture) was adopted and published with the aim of aligning with Directive 2005/36.[18] The Turkish Vocational Qualifications Authority (VQA) has taken further steps towards becoming operational, including recruitment of staff and adoption of several regulations on staff and working methods.
However, the principle of reciprocal recognition is “still applied” to a number of regulated professions whereas automatic recognition is the general rule under the acquis.[19]One may wonder whether the Commission is not asking too much from Turkey on this point: essentially the country is requested, prior to its accession, to automatically recognize EU qualifications regardless of whether the existing EU member states recognize Turkish qualifications for the same profession. Thus, e.g., the Dutch diploma of a Dutch dentist would have to be recognized by Turkey even if the Turkish diploma of a Turkish dentist is not recognized by the Netherlands.
Turkeyalso still needs to designate a contact point as part of implementation of Directive 2005/36.
The Commission’s overall conclusion is that limited progress can be reported on the right of establishment and freedom to provide services. Alignment in these areas is still at an early stage. The legal groundwork in the field of postal services still needs to be launched. Alignment with Community law on the mutual recognition of professional qualifications is progressing slowly but at a steady pace.
In the case of Bulgaria, the Commission concluded (in 2006) that significant progress had been made on the right of establishment and the freedom to provide non-financial services. Bulgaria was generally meeting the commitments and requirements arising from the accession negotiations and Bulgaria was expected to be in a position to implement the acquisfrom the time of accession if the current pace of progress was maintained. Progress had been made in the area of financial services, notably on banking and insurance, but increased efforts were still needed in the fields of banking (Directive on capital requirements for investment firms), investment services and the securities market and protection of personal data. In addition, increased efforts were required on motor vehicle insurance and on the information society. Some progress had been made in Bulgariaon mutual recognition of professional qualifications. Preparations were continuing, but there were concerns that Bulgaria would not be in a position tofully implement the acquisfrom the time of accession if the current pace of progress was not raised. Swift action was therefore recommended by the Commission in 2006.
As for Romania, just prior to its accession good progress had been made with identifying barriers to the right of establishment and the freedom to provide services and removing incompatibilities with the EC Treaty. Romania had a legal framework in place which allowed the provision of services in a temporary manner by EU nationals without the need to obtain further licences. On the other hand, problems remained in the banking sector (capital requirements for credit institutions and investment firms) and the insurance sector (compensation of victims of road accidents by Romanian compensation bodies).
Assessment – As in the case of workers, no indications can be found (in the 2008 PR) as to the desirability of transitional measures regarding the freedom of establishment and the freedom to provide services. Nevertheless, in the previous accession treaties with the Eastern European countriesno such transitional (restrictive) measures can be found regarding the freedom of establishment. This led to an increase of migration of self-employed persons from Eastern Europe into the existing Member States, given the fact that the free movement of workers was - and still is -not (entirely) liberalised. Nationals from Poland, Hungary etc. set up their own businesses or started to work not under the direction of a ‘boss’ in order to obtain residence permits and to be exempted from national requirements regarding work permits. Numerous cases were referred to the ECJ which had to rule, inter alia, on the distinction between the concept of ‘worker’ and that of ‘self-employed person’.[20]
Given these previous arrangements, there is a reasonable possibility that the EU-Turkey accession agreement will also not contain transitional rules for the freedom of establishment. It would then be of the utmost importance for Turkish nationals to conduct as much economic activities as possible in a self-employed capacity and not as a workers.
In this respect it must be noted that already under the current Ankara Association Regime, Turkish self-employed persons enjoy the stand-still rights given to them by Article 41(1) of the Additional Protocol: “The Contracting Parties shall refrain from introducing between themselves anynew restrictions on the freedom of establishment and the freedom to provide services”. In the famous Tum and Dari judgment, the ECJ ruled that this provision is drafted in clear and unconditional terms so that it can be invoked directly by Turkish self-employed persons before the courts of the EU Member States. Moreover, the clause also covers the first admission of Turkish nationals, so that they have a (Community law based) right to enter and to stay in the EU Member States, at least if such a right existed on the date of entry into force of the Additional Protocol for that particular Member State. For the original members, such as Germany and the Netherlands, that date was 1 January 1973.[21] Despite this case law of the ECJ, a true freedom of establishmentin the EU-Turkey accession treaty would make a difference: access to self-employed economic activities would no longer be dependent on the national immigration rules that were in force on 1 January 1973 (or on the date of accession for Member States that acceded to the EU after this date).