Is Turkey going cold on EU membership?

As Europe limps along economically and struggles to speak with a single voice on… well almost anything, and at a time when the EU's two flagship projects - free movement and the single currency - are coming under massive strains, the contrast between the bloc and perennial candidate country Turkey could not be starker.

In 2010, the EU-27’s GDP grew by 1.8%, while in comparison, Turkey’s GDP grew by 8.2% over the same period (and by a phenomenal 150% since 2003), with steady growth of 4.6% projected for 2011. In parallel to its strong economic performance, Turkey is also becoming increasingly self-assertive on the world stage, most notably when, together with Brazil, it took the diplomatic initiative over the Iranian nuclear programme last year.

It now seems as if the increasingly confident Turks are turning against the idea of EU membership. Only 38% expressed support for the idea last year, compared with 73% in 2004. That's a spectacular drop.

Should this be of concern to the EU? Most definitely.

Irrespective of the pro and cons of Turkey joining the EU, Brussels' approach to this issue really represents the worst of all worlds. By constantly sending mixed signals about whether or not Turkey is in fact welcome - the EU risks antagonising a country that it really needs on side. Do you really want to tick off a country that is up and coming, possessing a huge market (that Europe's struggling economy desperately needs) - and whose geo-strategic importance is second to none?

France in particular, but also to some extent Germany, have not exactly encouraged the country's attempt to gain full EU membership despite the fact that Turkey has been an official candidate country since 1999 and in accession talks since 2005. You'd forgive Turks for feeling insulted by being messed around by the EU. This is now reflected in Turkish public opinion.

The problem with the EU's mixed-signals approach is that it could push Ankara in to the arms of far less pleasant countries, such as Iran. That would be a spectacular own goal for Europe.

It is also possible that full EU membership is becoming less appealing for the Turks for other reasons. A union in which debt is being past around and several countries are on the dole - and control over a country's political and economic future is partly in other peoples' hands - just isn't that attractive. While many in Europe are worried they would end up having to subsidise Turks, the idea of being asked to bail out troubled eurozone members (least of all Greece!), can hardly be appealing to the Turks either.

But there's another side to this which is often overlooked. Just as the EU has in the past acted as a driving force behind modernisation and reform in Turkey (albeit with mixed results), so Turkey could contribute to some badly needed reforms in the EU. An EU which has Turkey as a full member simply would have to withdraw from some crucial policy areas where it has over-stepped its mark in the past. Justice and Home affairs for example, where EU integration has made some quantum leaps over the last few years. Or the Common Agricultural Policy, which would probably implode if Turkey were to join, or the Structural Funds, or the excessive use of Qualified Majority Voting (as Turkey would instantly become the most powerful country in the Council of Ministers due to its size). In other words, Turkey's size and composition could in fact be a strong argument in favour of the country joining - at least for those of us who want to see some real and radical EU reform.

In fact, the UK of all member states ought to consider the strategic benefits of using the issue to build momentum for institutional reform within the EU. The EU could also draw lessons from Turkey’s dynamic economic performance which will be crucial to the continent’s future prosperity, especially in the context of Europe’s looming demographic crisis. Clearly, there are significant problems with the Turkish candidature that would have to be overcome, from the Cyprus issue to the status of the Kurdish minority, so it is important not to jump the gun here.

But for politicians - in the UK and beyond - ruling out the prospect of Turkey of tomorrow joining the EU of tomorrow would be a pretty serious mistake.

The EU's walls of Jericho moment?

The exact consequences for the eurozone of the True Finns' success in yesterday's Finnish elections remain unclear. The result makes it the third largest party, securing 39 seats in the 200-strong parliament with 19% of the votes, close behind the National Coalition Party (NCP), which received 20.5% of the votes (44 seats in Parliament) and the Social Democrats which won 19.1% of the votes (42 seats). To put this into context, they polled only 4% in the last national elections.

With performance better than the 15 or so percent expected on Friday, a seat within the new coalition government is now a distinct possibility. Finnish television Yle quotes the party secretary of the victorious National Coalition Party saying that a government consisting of the three major parties is a "strong possibility", with the NCP’s Jyrki Katainen as Prime Minister.

Formal coalition negotiations are due to start on 27 April, which could make it very difficult for Finland to sign up to a bail-out package for Portugal, as that requires the approval of Finnish Parliament. True Finns leader Timo Soini has re-stated his opposition to the Portuguese bail-out package following last night’s election results. “I don’t believe that the package that is there will remain”, he told Yle last night. The Social Democrats want Portugal to restructure its debt rather than seek a bail-out, which is an additional factor in all of this. However, let's not also forget as with all politicians, Mr. Soini wants to be in government - he wants powers - so it's possible that he might compromise on the party's tough 'no more bailouts' position. What's clear is that when it comes to the EU Soini and Katainen occupy two different planets.

Regardless, it's clear that a new brand of "triple A" populism has emerged in the creditor eurozone countries, whose voters are voicing strong opposition to the "we'll keep the euro together at any price" doctrine that they have been fed by EU elites up to now. As we've noted before, such anti-euro sentiments are now picked up by nationalist parties from Vienna to Paris, feeding into the mix of anti-incumbency, pro-independence and most often, strong anti-immigration sentiments.

As we also noted before, the "far-right" label is inappropriate as a generalised term to describe the various parties currently occupying this space around Europe - they're all different in their make-up, roots and emphasis with some a lot nastier than others - and the True Finns simply isn't a "far right" party. What's clear though, is that they all push a heavily nationalist agenda, and they all fish in more or less murky, anti-immigration waters.

But in relation to the eurozone specifically, what's so significant about this election is that it's changing the parameters of the debate. In Austria, Netherlands, Germany and France, the established parties have managed to keep strong anti-euro, anti-bail-out forces outside the realm of government. The Dutch government rely on the opposition parties to circumvent Gert Wilders' Freedom Party, for example. If the True Finns make it into government - and chances are that they will - 'triple A populism' will have become part of the mainstream conversation, in a mainstream European country.

The guiding principle of European integration has always been 'build the institutions and the facts of life will follow'. In the realms of eurozone bail-outs, as well as in the contentious domain of immigration, this guiding principle is now being tested to its limits.

As Gideon Rachman points out on his blog today, the EU is in "deep trouble". Someone (a certain Mr T. Blair), in a speech to the European Parliament, said in 2005:

"It is time to give ourselves a reality check. To receive the wake-up call. The people are blowing the trumpets round the city walls. Are we listening? Have we the political will to go out and meet them so that they regard our leadership as part of the solution not the problem?"

That was six years ago. It's a most unfortunate irony that EU leaders, in their misguided efforts to stamp out 'nationalism' via over-building institutions and attempting to superimpose an artificial identity from above, are now contributing to the rise of the very currents they were professing to fight.

First to the Finnish line

This is a graph showing the support for the different parties, according to a poll published last night, ahead of the Finnish national elections on Sunday. All international eyes are on the True Finns (fourth from the left) - the party that has said it opposes a bail-out deal for Portugal and putting any more cash on the table for struggling eurozone economies. In fact, the party doesn't want to be in the euro at all.

A lot has been said about the True Finns, with the European media all of a sudden forced to become experts on Finnish national politics - it has to be said with varying degrees of success. That many still refer to the True Finns as a "right wing" party indicates the need for a bit more analysis and a bit less reliance on labels that are flying around. The party is pretty skilfully moving along the right-left scale. It's effectively social democratic on economic and welfare issues, favouring a big state, combined with a pretty clear socially conservative flavour. It's definitely populist and not exactly enthusiastic about immigration (and this in a country which accepts some of the fewest migrants in Europe).

So what will happen on Sunday? We wouldn't bet our money on any player. The True Finns have seen a drop in support recently - 15.4% in the poll published yesterday, down from 17.2% a month ago. The National Coalition Party extended its lead to 21.2% in yesterday's poll, while the Centre Party was the second largest party at 18.6%. The Social Democrats were at 18%. The Nordic bookies don't think the True Finns will make it into government and will give you 2.10 times your money for a bet on them winning ministerial seats, while a bet on them not making it only gives you 1.65 times your money.

Regardless, the True Finns are likely to make huge gains compared to the last elections in which they scored just over 4% (see the rise of the True Finns here, in yellow). And a second thing to remember, the Social Democrats - currently at 18% - have also expressed pretty clear opposition to a Portuguese bail-out, instead arguing for a restructuring. Between them, the two parties could well reach above 30% - that's a pretty powerful anti-bail-out bloc. As we've noted before, this could potentially hugely complicate a Portuguese bail-out, as well as efforts to top up the temporary bail-out fund (EFSM) and cash injections in to the permanent rescue mechanism (EFM).

The elections in Finland have made people - not least many opinion formers - start to realise that, shock horror, ultimately the eurozone is about politics. And as we know all politics is local.

In fact, it's difficult to find a more conspicuous example of the inherent flaws of the eurozone - the idea that political ambition can stamp out both economic and democratic realities - coming up against the full force of national democracy.