Free movement of capital and technological
developments have increased the
interaction of countries and mobility in
financial markets. While capital flows support
growth and development in emerging
and developing countries, high risk countries
with weak financial markets and fragile
economies are negatively affected from
sudden capital flows. These rapid movements
create risks on their exchange rates
and current accounts, and may destabilize
their economies.
Structural and financial problems in
some EU countries led public deficits and
debt stock in the Euro Area to increase
and resulted in deepening of the crisis in
the Euro Area. The governance crisis that
emerged with this crisis brought up reform
needs to the agenda of the EU again and
increased debates on the EU integration
process. The EU decision-making process
based on unanimity for many issues hinders
rapid decision making in the face of crises.
Reframing the cooperation to a looser
framework or on the contrary reinforcement
of political integration by increasing
national authority transfer are among the
options. Creation of a bilateral EU structure
that includes both options, called
“multi-speed Europe”, is also discussed as a
third option. According to possible results
of these discussions, development of alternative
strategies by Turkey for EU relations
bears significance.