A subscriber asked in a comment to an earlier post what CC considered to be the implications of the French rejection of the EU Constitution.

CC's broad, simple and possibly philistinic answer is set out below:

Conclusions:

* "emerging market" investor bulls of Turkey may wish to reconsider their accession thesis. The last time Turks got into Europe was 1453 when Sultan Mehmet II was The Man. The resulting exodus of Byzantine intellect to Florence, Ferrara et al from Constantinople spurred the rise of the Renaissance (Mehmet got zero credit for this by the way) and led to an early example of euro-unification amongst the Italian city-states faced with the eastern threat;

* perceptions of insurmountable cultural differences with Turkey remain and are much greater on the ground than has been assumed on planet EU. Different groups have different reasons for holding these perceptions (when Jean-Marie Le Pen and Valerie Giscard d'Estaing agree it is rare day) but held they are.

* the French will always find any compromise involving their socio-economic model difficult to make despite (or for cynics of welfare "because of") persistent high unemployment. At last count this stood at about 10% in total and 22% for those under 25 years old;

* the EU may now look forward to either years of re-negotiation of the Constitution, or years of (fruitlessly) trying to convince citizens of the actual version's worth.

Discussion:
In France the "Non" answer to the Constitution of the debate brought together those:

* who believed France's social model would be weakened;

* that it would impose an "anglo-saxon" model favouring big business at the expense of farmers, workers and public services;

* that it threatened the country's sovereignty and identity; and

* that it would quickly let Turkey into the EU.

These were reactions to two key elements of the proposed Constitution: the EU gaining new powers from member-states over asylum and immigration policies; and the adoption of qualified majority voting.

Clearly, giving the EU new powers was going to sell badly to subscribers of the idea that the EU Council lacks legitimacy and is too distant from the populace. That these new powers included Justice policy (under which asylum and immigration fall) a bare 5 months after having agreed to accession talks with Turkey in December 2004 did not ease the task.

Indeed, the rejection of the Constitution in France arguably most reflects the opposition to Turkey joining the EU. In spite of a spirit of modernism, political secularism and a rich ethnic mix unknown in most EU nations (summed up well here), Turkey getting into the EU at all is doubtful - whatever the supposed irreversibility of the European Council decision on accession talks last December.

On this point, readers may want to cross-reference the views, for example, of the 400,000-odd French voters of Armenian descent; or the result of the Dutch referendum; or the Cypriot government (yes, an EU member) who Turkey refuse to recognise; or those EU citizens who wonder about the wisdom of extending the borders to Iraq and Syria; or EU immigrant-worriers fixated on the long-term unemployment rate of 24% in Turkey (population 68 million); etc.

On the other hand, for profit-seeking investors free of such mundane baggage, the economic case against the Turks (skint and plenty of them) does not stack up. Morgan Stanley have argued that even the poorest accession nations have historically converged with the EU average GDP per capita rate remarkably swiftly and without impacting the Union's overall growth rate.

That said, Turkey would be starting off at the unprecedented low rate of 29% of the EU 25 average. Accession brings with it EU investment (public and private) as well as aid but without these it is a reach to see quantum-leap improvements in the country's real GDP growth rate (3.4% average 2000-2003); or a reversal in the massive declines in foreign direct investment that have occurred over the last 3 years.

But it is not the economic issues that dominate. It is the cultural ones - including the racist and religious arguments - that stand foremost. In such a climate it is difficult envisaging any EU25 head of state wanting to go before his electorate in order to make Ankara's case for accession to the union. That would be a great deal like the proverbial turkeys voting for Christmas.

Sources: Eurostat (unemployment & GDP/capita data); OECD Turkey Country Statistical Profile 2005

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