With this edition of EUROPE/Documents, we bring to a close the publication (in French, English and German) of the official summaries of the reports adopted by the European Commission on 9 October on the subject of progress made by candidate countries toward EU membership. These last three reports concern Slovakia, Slovenia and Turkey. For the other candidate countries, see EUROPE/Documents No 2286/2287, EUROPE/Documents No 2288/2289 and EUROPE/Documents No 2290.
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Slovakia
Whereas the 1997 Opinion and the 1998 Regular Report concluded that Slovakia did not fulfil the political criteria, the 1999 Regular Report came, for the first time, to a positive evaluation in this respect. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. This has been confirmed over the past year. Slovakia continues to fulfil the Copenhagen criteria.
Progress was achieved with regard to the structure and functioning of the administration, notably by setting up a Civil Service Office and building up decentralised, regional administrations. Delays have occurred in implementing the Civil Service Law. The proper functioning of the self-administration may be hampered, as the transfer of competencies from state to regional level is not going hand in hand with fiscal decentralisation.
Further important steps were taken to strengthen the independence of the judiciary. In particular, further key legislation was adopted and a Judicial Council was set up. The new legislation and institutions should be used to the full, so as to guarantee the judiciary's professional impartiality and political neutrality.
Some progress can be noticed in the fight against corruption, which remains a cause for serious concern, notably by further implementing the relevant action plans and drawing codes of ethics for the public sector. These efforts must be continued.
Slovakia continues to respect human rights and freedoms.
In particular, legislation and administration was reinforced to fight trafficking in human beings. A new Asylum Act was adopted, providing, inter alia, for the establishment of an independent body to act as the second instance in the asylum procedure.
Considerable efforts were made in further developing and putting into practice approaches to protect minority rights. In particular, the Office of the Government Plenipotentiary for Roma affairs was strengthened and the relevant strategy enhanced and financial means increased. These efforts must be continued and reinforced as a matter of priority, to effectively combat discrimination and improve the living conditions of the Roma community. The adoption of comprehensive anti-discrimination legislation would be an important step forward in this regard.
The 1997 Opinion already acknowledged the reform efforts undertaken by the Slovak authorities to transform their economy. Since the Opinion, and against a challenging international economic environment, economic performance has improved.
Macroeconomic stability has been achieved, reforms have accelerated while the Slovak authorities' commitment to the economic requirements of EU accession has been sustained.
Hence, it is concluded that the Slovak Republic is a functioning market economy. The continuation of its current reform path should enable the Slovak Republic to cope with competitive pressure and market forces within the Union.
Improvements can be made to the macroeconomic situation, which requires urgent measures to reduce both the fiscal and current account deficits. Expenditure reforms, in particular in the health and pension area and as regards subsidies and guarantees, are essential. The unemployment problem necessitates a whole range of structural reforms, including the elimination of disincentive effects in the social protection system and a more flexible labour legislation. Supervision of the financial sector can be further strengthened. The effective implementation of the legal framework for a market economy needs to be further enhanced.
Since the Opinion, Slovakia has made very good progress in legislative alignment and, increasingly, in strengthening administrative capacity. Structural weaknesses, which persist in a number of areas like company law, transport policy, environment and financial control, have been continuously remedied to a large extent.
Over the past year, Slovakia has further advanced in aligning with the acquis and strengthening its administrative capacity. Particular progress has been achieved in the areas of free movement of goods, freedom to provide services, agriculture, transport, energy, environment, and justice and home affairs. Sectors, in which only limited progress was made in the reporting period include regional policy and co-ordination of structural instruments.
Overall, Slovakia has achieved a high degree of alignment with the acquis in many areas and is reasonably well advanced towards reaching adequate administrative capacity to implement the acquis in a considerable number of fields, although further efforts remain to be made. Detailed plans have been agreed, in particular in the negotiations and in the Action Plan, to cover the remaining gaps.
Concerning the internal market, Slovakia has achieved a good degree of alignment and is relatively well advanced in having appropriate administrative capacities in place. As regards free movement of goods, alignment is largely complete and administrative capacity broadly in place. Slovakia's standardisation and accreditation bodies function well. The focus needs to be put on the outstanding transposition of the foodstuffs acquis and the strengthening of the related administrative structures. In particular, an appropriate market surveillance infrastructure still needs to be fully set up and structures for public procurement need to be reinforced. In the area of freedom of movement of persons, where preparations are generally well advanced, legislation for the mutual recognition of qualification, in particular, must be completed and the administrative capacities for the future co-ordination of the social security systems need to be reinforced. Concerning freedom to provide services, good progress has been achieved in the field of financial services over the past year. Despite an advanced level in this area, Slovakia needs to concentrate its efforts on completing alignment, notably in the insurance sector, and strengthening the administrative structures, in particular with respect to financial supervision. Alignment in the area of free movement of capital is well andvanced; Slovakia needs to focus, in particular, on reinforcing administrative capacities to fight money laundering.
As regards company law, Slovakia has reached a good level of alignment and is relatively well advanced in terms of administrative preparations. Over the past year, legislative progress can be particularly noted in the field of trademarks, design and patents. Administrative structures to combat piracy and counterfeiting need to be reinforced. Concerning competition policy, a good level of alignment has been achieved, and operational administrative structures put in place. Over the past year, a considerable track record of enforcement in the State aid area has been built up. However, in the steel sector, state aid granted in Slovakia is not compatible with Protocol 2 of the Europe Agreement. Administrative capacities in this field, as well as in the area of anti-trust, however, need to be further reinforced.
As regards agriculture, Slovakia is advanced in transposition and implementation of the acquis. Over the past year, in particular, good legislative alignment has been achieved in the phytosanitary and veterinary area. Administrative strengthening requires further attention. Efforts are required for the construction and proper functioning of the Border Inspection Posts and food processing establishments need to be upgraded. Serious efforts are needed to ensure that a fully functional Integrated Administration and Control System (IACS) is put in place. A timetable has been drawn up to remedy the identified shortcomings for the IACS.
Legislative alignment and administrative preparation in the area of energy are advanced. Overall administrative capacities need to be further strengthened. As regards nuclear energy, Slovakia has committed itself to close the two Bohunice V1 reactors by 2006 and 2008 respectively. Slovakia should refine its project pipeline to ensure satisfactory projects for the decommissioning of the two reactors. In transport policy, Slovakia has aligned with the acquis to a considerable extent and significant steps have been undertaken to strengthen the administrative capacities. Alignment, in particular in the area of rail transport and inland waterways, needs to be completed. Co-ordination between the different ministries and bodies involved in this sector has to be improved.
With respect to taxation, Slovakia has reached a good level of alignment and the reform of its tax administration is ongoing. Alignment both in the areas of direct and indirect taxation remains to be completed. Modernisation and strengthening of the tax administration needs to be reinforced as the general tax collection remains weak. Slovakia has a comprehensive and consistent reform agenda in place to address the identified shortcomings. As regards customs union, Slovakia has completed its legislative alignment and has, in principle, developed and reinforced the necessary administrative capacity. Attention should continue to be paid to the enforcement of the transposed legislation. Considerable efforts on IT systems to allow for the exchange of electronic data with the European Community and its Member States have been made in the taxation and customs areas, but these still require further work.
Alignment in the area of telecommunications and information technologies has reached a high level and administrative structures are being put in place, though completion of legislative alignment and further strengthening of administrative structures as well as proper separation of regulatory and operational functions are needed. The evaluation of the economic implications of full implementation of the universal service acquis is awaited.
In the field of social policy and employment, Slovakia is advanced in terms of legislative alignment. Administrative structures are mostly in place, but require further strengthening. There is a particular need to co-ordinate the supervision and enforcement of the transposed health and safety acquis. Administrative preparations for the future management of the European Social Fund need to be reinforced.
Slovakia has aligned with the acquis in the area of regional policy and co-ordination of structural instruments but effective administrative structures are only in place to a limited extent. Over the past year, the management structures and paying authority for the implementation of the Structural Funds and Cohesion Fund have been designated. A clear definition of the final implementation structure, however, is missing. There is a substantial need to reinforce the administrative capacities in this area. The technical preparation of projects eligible for Community funding has to be considerably improved. The remaining administrative weaknesses have been identified in the commitments made in the framework of the negotiations as well as in the Action Plan, and the necessary steps are being taken to remedy these shortcomings. Ongoing efforts need to be substantially stepped up.
Concerning the environment, Slovakia is advanced in alignment with the acquis and in having the necessary administrative capacity to implement it. Slovakia has recently increased its environmental investment significantly. Efforts need to focus now on finalising transposition, in particular in the area of Integrated Pollution Prevention and on implementation in the area of Control and Discharge of Dangerous Substances, as well as on strengthening administrative capacities. As regards consumer protection, legislative alignment and administrative strengthening is advanced but not yet completed.
With respect to co-operation in the fields of justice and home affairs, Slovakia is to a considerable extent aligned with the acquis and administrative structures are generally in place. Implementation of the Schengen Action Plan is progressing well. The focus needs now to shift to strengthening implementation of the transposed acquis and to further reinforcing administrative capacities, in particular in the areas of border control and the fight against illegal immigration and crime.
As regards financial control, Slovakia is advanced with regard to legislative alignment and the necessary institutional structures are being put in place. It needs to pay attention to strengthening and building up the necessary administrative capacity, notably in the area of public internal financial control. Concrete actions have been planned and are being implemented to remedy the identified shortcomings. Efforts should be stepped up.
Concerning the administrative capacity, Slovakia has largely achieved a sufficient, though still rather fragile, capacity to ensure effective implementation and enforcement of the acquis, notably in the area of the internal market and the various Community policies. Slovakia needs to ensure the full operation of the administrative structures, in particular with a view to guaranteeing the uniform and predictable implementation of the acquis. Particularly close attention is required regarding the structures necessary to implement that part of the acquis which will be applicable only upon accession, in particular as regards sound and efficient management of EC funds.
In the accession negotiations, 27 chapters have been provisionally closed. Slovakia is generally meeting the commitments it has made in the negotiations.
Bearing in mind the progress achieved since the Opinion, the level of alignment and administrative capacity that Slovakia has achieved at this point in time, and its track record in implementing the commitments it has made in the negotiations, the Commission considers that Slovakia will be able to assume the obligations of membership in accordance with the envisaged timeframe. In the period leading up to accession, Slovakia needs to continue its preparations, in line with the commitments it has made in the accession negotiations.
Slovenia
In its 1997 Opinion, the Commission concluded that Slovenia fulfilled the political criteria. Since that time, the country has made considerable progress in further consolidating and deepening the stability of its institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities. This has been confirmed over the past year. Slovenia continues to fulfil the Copenhagen political criteria.
Slovenia has made considerable progress on public administration reform by adopting the laws on civil servants, public agencies and state administration. With the adoption of these laws, the framework legislation for public administration reform is now in place. It is important that these laws are now fully implemented.
Reform of the judiciary has continued through legislative changes and the adoption of measures aimed at abolishing the backlog of pending court cases. Slovenia has recognised the need to improve the situation further.
Slovenia continues to respect human rights and freedoms.
The 1997 Opinion already acknowledged the substantial reform efforts undertaken by the Slovenian authorities to transform their economy. Since the Opinion, and against a challenging international economic environment, economic performance has improved. Macroeconomic stability has been achieved, reforms have deepened while the Slovenian authorities' commitment to the economic requirements of EU accession has been sustained.
Hence, it is concluded that Slovenia is a functioning market economy. The continuation of its current reform path should enable Slovenia to cope with competitive pressure and market forces in the Union.
Improvements can be made on reducing the inflation rate by the further elimination of indexation schemes and by directing the macroeconomic policy mix more convincingly towards inflation reduction. The competitiveness of the economy would be supported by speeding up structural reforms, such as the final liquidation of the Slovene Development Corporation and further privatisation in the financial sector.
Since the Opinion, Slovenia has made very good progress in transposition and implementation of the acquis as well as in developing the institutions needed for implementing and enforcing the acquis.
Over the past year, Slovenia has further advanced, especially in the areas of free movement of persons, fisheries, Economic and Monetary Union, employment and social policy, regional policy, environment and financial control. Limited further progress has been made in the area of consumers and health protection.
Overall, Slovenia has achieved a high degree of alignment with the acquis in most areas, and is well advanced concerning the administrative capacity needed to implement the acquis, although further efforts are still needed. Detailed plans have been agreed, in particular in the negotiations and in the Action Plan, to cover the remaining gaps.
Slovenia is well advanced in legislative alignment concerning the key areas of the internal market and most of the institutions have been established and are functioning well. Concerning free movement of goods, Slovenia is well advanced in legislative alignment and in ensuring functioning of the institutions. However, some acquis still remains to be transposed, especially on foodstuffs and some other areas of sectoral legislation, as well as on public procurement. The new institutes for standardisation and certification function well and their administrative capacity should be further reinforced and market surveillance systems strengthened. Following the adoption of important legislation in the past year, the legislative framework for free movement of persons is almost complete. However, some fine tuning is needed on mutual recognition, and alignment on citizen's rights needs to be completed by accession. The Slovenian legislation in the area of freedom to provide services is largely aligned with the acquis, and should now be completed; administrative capacity should be enhanced further, including concerning supervision of financial services. The level of preparations for membership in the area of free movement of capital is advanced, and further progress was made in the past year through adoption of new legislation and through lifting of several restrictions on money transactions. Due attention should be given to the delay in removing restrictions on foreign direct investment concerning investment funds and management companies, and preparations for accession in the area of payments systems remain to be completed. The situation in the area of company law is good in Slovenia, however, further efforts should be made to complete the legislative alignment process and efforts to ensure enforcement of intellectual property rights should continue. Concerning competition policy, Slovenia's preparations are reasonably advanced and it should now focus on completing the legislative alignment process and on establishing a good track record on enforcement with a view to ensuring efficient competition in the Slovenian market.
Legislative alignment has continued in the taxation area and Slovenia's legislation is almost fully aligned with the acquis. Slovenia should now focus on completing alignment. Slovenia has reached a high level of alignment in the customs area and should now focus on removing remaining inconsistencies with the acquis and on further strengthening of the administration through the ongoing reform. IT systems should be further developed in both areas so as to allow for exchange of computerised data between the EC and Slovenia.
Slovenia has continued to make steady progress in the agriculture area, especially on veterinary and phyto-sanitary issues, through adoption of new legislation, establishment of several new institutions and through accreditation of the SAPARD Agency. Good progress has been made in upgrading food establishments. Slovenia should now focus on further strengthening the administrative capacity, completion of the Common Agricultural Policy management mechanisms; and setting up of adequate phyto-sanitary and veterinary inspections, in particular at the borders, and ensuring their proper functioning.
Slovenia has made good progress in the fisheries sector, and the situation is in general satisfactory. Efforts in this sector should focus on adopting the outstanding legislation, and on further reinforcing capacity for implementation and enforcement.
Further progress has been made in the transport sector through the setting up of new institutions. The overall situation in this area is good, although some delays have occurred in the rail sector. Slovenia should now focus on completing legislative alignment and strengthening the administrative capacity. Preparations for membership in the energy sector have continued and are advanced. Administrative capacity needs to be strengthened further, in particular as regards the regulator and the nuclear safety authority. The latter body needs to be made de iure independent from the promotion of nuclear energy.
Slovenia has made very good progress since the last Regular Report in designating the structures responsible for implementing regional policy and preparations for implementation of structural and cohesion funds are well on track. These should be continued, including the technical preparation of projects eligible for Community funding. Legislative alignment has advanced considerably in the past year in the area of employment and social affairs, notably through the adoption of the Employment Relations Act. The overall situation in this area is good and efforts should now focus on strengthening the implementation capacity for the acquis on occupational health and safety, including the strengthening of labour inspectorates.
The level of alignment in the environment area is high following the adoption of important new legislation in the past year. Slovenia should now focus on completing transposition of horizontal legislation, transposition of the delayed Integrated Pollution Prevention and Control directive and to securing sufficient investments to ensure the implementation of the environment acquis. Although the level of alignment in the area of consumers and health protection is advanced, alignment still needs to be completed and administrative capacity improved.
Good progress was made in the past year in the postal sector through adoption of the Postal Act and preparations for accession are well on track. Attention should now be focussed on increasing competition in the telecommunications area. The level of preparedness in the culture and audio-visual sector is good, however, Slovenia should complete legislative alignment and strengthen the institutions.
Slovenia has continued to make good progress in preparing for accession in the area of justice and home affairs, especially by setting up new institutions. Legislative alignment is advanced but remains to be completed, especially on asylum and migration. The institutions should be strengthened further and Slovenia should continue its efforts to upgrade capacity and infrastructure for border management in accordance with the Schengen Action Plan, especially at what will become the Union's external border.
Very good progress has been made since the last Regular Report on financial control and the preparations for membership are well advanced in this area. Slovenia should now focus on effective implementation and ensuring the planned strengthening of administrative capacity on public internal financial control.
Slovenia's administrative capacity for the implementation of the acquis has been enhanced further in the reporting period. Most of the institutions necessary for the implementation of the acquis are now in place and attention should be focussed on providing them with sufficient resources to carry out their work. Slovenia should continue its efforts to improve the administrative capacity, in particular in the areas of freedom to provide services, agriculture, fisheries, rail transport, energy, telecommunications, culture and audio-visual, environment, consumers and health protection, and justice and home affairs. Special attention should be given to the structures necessary to implement the acquis which will be applicable only upon accession, in particular as regards sound and efficient management of EC funds.
In the accession negotiations 28 chapters have been provisionally closed. Slovenia is generally meeting the commitments it has made in the negotiations. However, delays have occurred with regard to removing restrictions on foreign direct investment concerning investment funds and management companies, the establishment of the Fishing Vessel Register, creating the legislative basis for restructuring of the railways and transposition of the Integrated Pollution Prevention and Control directive. These issues need to be addressed.
Bearing in mind the progress achieved since the Opinion, the level of alignment and administrative capacity that Slovenia has achieved at this point in time, and its track record in implementing the commitments it has made in the negotiations, the Commission considers that Slovenia will be able to assume the obligations of membership in accordance with the envisaged timeframe. In the period leading up to accession, Slovenia needs to continue its preparations in line with the commitments it has made in the accession negotiations.
Turkey
The decision on the candidate status of Turkey in Helsinki in 1999 has encouraged Turkey to introduce a series of fundamental reforms. A major constitutional reform was introduced in October 2001 aimed at strengthening guarantees in the field of human rights and fundamental freedoms and restricting the grounds for capital punishment. A new Civil Code was adopted in November 2001. Three sets of reform packages were adopted in February, March and August 2002. The death penalty has been lifted in peacetime. The state of emergency has now been lifted in two provinces in the South East and the decision has been taken to lift it in the two provinces where it still applies by the end of this year.
The adoption of these reforms is an important signal of the determination of the majority of Turkey's political leaders to move towards further alignment with the values and standards of the European Union. The August reforms were adopted under difficult political and economic circumstances and are particularly significant as they impinge upon traditionally sensitive issues.
The reform of the prison system continued, and progress was made in terms of improving physical conditions. Monitoring Boards and the new system of enforcement judges are now operational. A number of recommendations of the European Committee for the Prevention of Torture (CPT) are being implemented. However, despite progress, certain problems remain with conditions in F-Type prisons.
The reduction in the length of pre-trial detention (police custody) periods is a positive development in the context of the fight against torture. However, the lack of immediate access to a lawyer means that incommunicado detention for prisoners convicted under State Security Courts continues. Longer periods of custody still apply in the areas under the state of emergency. There have been continued allegations of torture and illtreatment and little progress in the prosecution of those accused of such abuses.
The reform package of August provides for the retrial of persons whose convictions have been found by the European Court of Human Rights to be in violation of the European Convention on Human Rights and Fundamental Freedoms.
The change made to Article 159 of the Turkish Penal Code means that the expression of opinion without the "intention" of "insulting" public institutions will no longer face criminal sanction. Changes to Articles 312 of the Penal Code and to the Anti-Terror Law, the Press Law, the Law on Political Parties and the Law on Associations eased certain restrictions on freedom of expression, association, the press and broadcasting.
The August package removed some restrictions in the law on broadcasting which had been readopted by Parliament in May following the president's veto. However the prosecution of writers, journalists and publishers has continued.
Progress has been made in the area of freedom of association where the law on associations has been modified and some restrictions lifted. Various grounds for banning associations remain, however.
The generally restrictive character of the Law on Associations remains, including the prior authorisation system. Foreign associations in Turkey are subject to certain limitations and strict controls.
As part of the August package, broadcasting and education in languages other than Turkish have now been authorised. Although the Law on Foundations has been amended, religious minorities continue to face limitations regarding legal personality, property rights, training of clergy and education.
The new Civil Code includes provisions aimed at improving gender equality and strengthening guarantees regarding the protection and rights of the child. Turkey ratified the 1969 UN Convention on the Elimination of All Forms of Racial Discrimination. However, trade unions remain subject to restrictions and child labour persists. The legislation which allows for reduced sentences for crimes related to "honour killings" is still applicable.
Reform of the judicial system has continued. The competence of the State Security Courts has been narrowed and the period of pre-trial detention reduced. The functioning of these Courts, though, is still not in line with international standards. There are continued reports that the judiciary does not always act in an independent and consistent manner. Training courses in human rights have taken place for judges and law enforcement officials.
A number of initiatives to foster more transparency in Turkey's public life have been taken in the last year. Nonetheless, corruption remains a serious problem. The relevant Conventions of the Council of Europe have not yet been ratified.
The lifting of the state of emergency in two provinces of the South East has led to an improvement in the conditions of daily life there. The protection of human rights in the region needs to be strengthened.
The constitutional amendment introducing changes to the composition and role of the National Security Council has been put into practice. Nonetheless, these changes do not appear to have modified the way in which the National Security Council operates in practice.
Turkey has continued to express support for direct talks between the leaders of the two communities in Cyprus to achieve a comprehensive settlement of the Cyprus problem. The EU, in line with statements issued by the United Nations Security Council, has emphasised the need for Turkey to take further steps to encourage the Turkish Cypriot leadership to work towards reaching a settlement before the end of accession negotiations.
Relations between Turkey and Greece have continued to improve. Efforts are continuing to put in effect new confidence building measures. Exploratory contacts on the Aegean between the two foreign ministries started in March 2002.
Overall, Turkey has made noticeable progress towards meeting the Copenhagen political criteria since the Commission issued its report in 1998(1), and in particular in the course of the last year. The reforms adopted in August 2002 are particularly far-reaching. Taken together, these reforms provide much of the ground work for strengthening democracy and the protection of human rights in Turkey. They open the way for further changes which should enable Turkish citizens progressively to enjoy rights and freedoms commensurate with those prevailing in the European Union.
Nonetheless Turkey does not fully meet the political criteria. First, the reforms contain a number of significant limitations, which are set out in this report, on the full enjoyment of fundamental rights and freedoms. Important restrictions remain, notably, to freedom of expression, including in particular the written press and broadcasting, freedom of peaceful assembly, freedom of association, freedom of religion and the right to legal redress.
Secondly, many of the reforms require the adoption of regulations or other administrative measures, which should be in line with European standards. Some of these measures have already been introduced and others are being drawn up. To be effective, the reforms will need to be implemented in practice by executive and judicial bodies at different levels throughout the country.
The Commission considers that the decision of the High Electoral Board to prevent the leader of a major political party from participating in the November 3 General Elections does not reflect the spirit of the reforms.
Thirdly, a number of important issues arising under the political criteria have yet to be adequately addressed. These include the fight against torture and ill-treatment, civilian control of the military, the situation of persons imprisoned for expressing non-violent opinions, and compliance with the decisions of the European Court of Human Rights.
In the light of the noticeable progress made in recent years and of the remaining areas requiring further attention, Turkey is encouraged to pursue the reform process to strengthen democracy and the protection of human rights, in law and in practice. This will enable Turkey to overcome the remaining obstacles to full compliance with the political criteria.
Turkey has made progress on the functioning of its market economy which should improve its capacity to cope with competitive pressure and market forces within the Union, but is still undergoing the consequences of the two deeply destabilising financial crises.
After several attempts to stabilise the economy, the current reform programme is producing positive results and growth has resumed. Fiscal discipline has improved and the transparency of public sector accounts has increased markedly, while inflationary pressures are declining. Political interference, a main source for Turkey's economic instability, has been reduced and structural weaknesses, such as a fragile and distorted banking sector, are being addressed. Financial market regulation and supervision have been strengthened. Important steps have been taken to liberalise key markets, such as agriculture and energy.
To improve the functioning of its markets and its competitiveness, Turkey needs to continue the present reform process in order to achieve macroeconomic stability and fiscal sustainability. Further reducing chronically high inflation and maintaining fiscal discipline are important pre-conditions to this end. Prudential and accounting standards in the banking sector have to be brought in line with international norms.
The privatisation of state banks and enterprises has to be accelerated and the market deregulation completed. Increasing investment into productive uses and devoting particular attention to education is important to increase the competitiveness and the growth potential of the economy. The inflow of FDI has to be encouraged by simplifying bureaucratic procedures and by removing remaining barriers.
Since the 1998 Report, Turkey has made progress in aligning legislation in the areas covered by the Customs Union. Progress has also been achieved in areas such as the banking sector, telecommunications, energy and agriculture. The financial sector has been restructured and administrative capacity in this field has been streamlined. Little progress has been achieved in other areas.
Over the past year, Turkey has further advanced in the areas of internal market, notably in the field of public procurement, as well as in the areas of energy and justice and home affairs. Progress in strengthening administrative capacity to implement the acquis has been limited.
Overall, Turkey has achieved a good degree of legislative alignment in the areas covered by the Customs Union, while in other areas this alignment is less advanced. Major discrepancies between the acquis and Turkish legislation remain. Administrative capacity needs to be strengthened. Considerable further efforts are needed.
Regarding the internal market, in the area of free movement of goods, the framework law on the free circulation of products adopted in 2001 has entered into force. Various pieces of implementing legislation have been adopted throughout a wide range of sectors. Substantial technical barriers to trade remain. Harmonization activities in sectors such as foodstuffs, pharmaceuticals and cosmetics should continue. Substantial work also remains to be done to establish and improve the functioning of various bodies (standardization, accreditation, and conformity assessment). An appropriate market surveillance system should be established. Despite the adoption of the Framework Law, pre-market surveillance is still in force. Current efforts focus on training of staff and improving the equipment capacity of the relevant bodies. On public procurement, a new law was adopted in May and subsequently amended in June 2002. The law is a significant step in the direction of aligning Turkey's public procurement rules with the Community acquis. Further efforts are needed to address substantial differences between the new law and the acquis. No progress can be reported in the field of free movement of persons.
In the field of free movement of capital, important restrictions on foreign investment in various sectors have remained. The implementation of legislation in the field of money laundering should be given greater attention. Turkey's alignment concerning financial services is well advanced, and further progress has taken place in 2001, in the framework of the reorganisation of the financial sector. In the field of non-financial services, there has been no progress, and much work still remains to be done in order to align Turkish legislation with the relevant acquis. In the area of company law, efforts have been made concerning the fight against piracy and counterfeiting. Implementation of the legislation should be further pursued and the Turkish Patent Institute needs to be fully independent. In the field of competition policy, the application of anti-trust provisions remains satisfactory. There has been no progress in aligning Turkey's state aid policy with the acquis and an independent State aid authority should be established as a matter of priority.
On agriculture, Turkey has started the registration of land and of live bovine animals. Preparations for a plant passport system have not started. Other elements under the relevant priority of the Accession Partnership have not been addressed. Concerning veterinary and plant health, an alignment strategy is under development. No upgrading of enforcement capacity has taken place. Turkey should focus on the transposition, implementation and enforcement of EC legislation in the veterinary and phyto-sanitary sectors. Overall, progress on alignment with the acquis in the field of agriculture is limited.
On fisheries, no progress has been made in alignment with the Common Fisheries Policy. A modernized fleet registration system needs to be established. Major discrepancies with the main elements of the EC's fisheries policy remain, particularly on resource management, inspection and control and market and structural policies.
As regards transport policy, Turkey should step up the legislative work necessary to adopt the transport acquis. The administrative capacity to apply and implement the relevant legislation in all sectors should be improved. In many sectors (road and maritime transport in particular), alignment is very partial, resulting mainly from the transposition of international Conventions.
On taxation, alignment on excise duties and VAT has started and some progress has been achieved with respect to rates and other exemptions. In the area of indirect taxation, significant further efforts are needed. As for direct taxation, Turkey needs to improve direct tax collection and to eliminate discriminatory measures. Overall, alignment with the acquis in the field of direct and indirect taxation is partial. As regards Customs Union, there is a large degree of alignment on paper, but little effective alignment of practices.
In most fields, Turkey's statistical infrastructure is still very different from that of the EU. Co-operation between the Turkish authorities and Eurostat has started recently. Alignment with the acquis has started and substantial efforts are needed.
Steps have been taken in the field of social policy and employment, but are not always in full conformity with the acquis. There is an urgent need to develop and strengthen the conditions for a genuine social dialogue at all levels. While some progress has been made, in most areas Turkish legislation is still far from alignment with the acquis.
As regards energy, substantial progress has been achieved in the electricity and gas sectors. The two major laws adopted last year have been further implemented and progress has been achieved in establishing an independent regulatory authority for the electricity and gas sectors. Alignment with the acquis is well under way. However, further efforts are needed.
In the telecommunications sector, there has been no progress in liberalisation in mobile and fixed markets and the implementation of the legal framework with respect to the dominant operators. Progress has been achieved in adopting new legislation in the field of licensing, interconnection and to some extent on universal service. Further efforts are needed to improve the administrative capacity of the Telecom Authority, in particular in relation to human resources and training. Overall, alignment with the acquis remains limited.
As regards culture and audio-visual policy, the new law on broadcasting is not in line with the acquis. Overall, alignment with the acquis remains limited.
As regards regional policy, the definition by Turkey of a provisional map for regional development purposes according to NUTS classification criteria has been completed and approved by EUROSTAT. However, the use of this classification for planning and regional policies has not yet started. No effective regional policy strategy in line with the EU standards has been developed. Overall, alignment with the acquis remains limited.
In the environmental field, legislation to align with the Environmental Impact Assessment Directive has been adopted. Steps have been taken to develop a plan for financing investments. The adoption of a new Regulation on Environmental Inspection represents a positive step towards increasing Turkish administrative capacity to implement the acquis. Overall, alignment with the acquis remains limited
On consumers and health protection, alignment is limited and substantial efforts are needed to align the legislation and to reinforce administrative capacity and consumers' awareness.
In the field of justice and home affairs, efforts have been made to raise awareness on the legislation and practices of the EU, in particular in areas such as asylum and illegal migration. Further steps have been taken to strengthen the fight against organized crime, drugs trafficking and corruption. The legal basis for combating trafficking in human beings has been established. Alignment with the acquis has started, in particular on visa policy, but substantial further efforts are needed. The fight against illegal migration needs to be drastically strengthened.
Concerning external relations, the adoption of the Generalized System of Preferences should be pursued.
On financial control, budgetary and financial control mechanisms inside the Turkish administration should be improved. Overall, alignment with the acquis has started and substantial further efforts are needed.
Administrative capacity in different areas needs to be strengthened to ensure that the acquis is implemented and enforced effectively. Significant reform at all levels of the administration is required. In some cases, this will entail the establishment of new structures, for example in the field of state aid and regional development. In some areas, new regulatory bodies have been set up. Their autonomy should be assured while at the same time sufficient staff and financial resources need to be made available.
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(1) In its Report of 1998, the Commission concluded that: "On the political side, the evaluation highlights certain anomalies in the functioning of the public authorities, persistent human rights violations and major shortcomings in the treatment of minorities. The lack of civilian control of the army give cause for concern. This is reflected by the major role played by the army in political life through the National Security Council. A civil, non-military solution must be found to the situation in south-eastern Turkey, particularly since many of the violations of civil and political rights observed in the country are connected with this issue. The Commission acknowledges the Turkish government's commitment to combat human rights violations in the country but this has not so far had any significant effect in practice. The process of democratic reform on which Turkey embarked in 1995 must continue. In addition to these problems, Turkey must make a constructive contribution to the settlement of all disputes with various countries by peaceful means in accordance with international law." Issues such as civilian control over the military, persistent human rights violations, torture as well as lack of protection for cultural rights have been mentioned in the subsequent reports.