While the EU has been the one to drag its heels in bringing Turkey into the fold, maybe Turkey is the one who should be expressing reluctance in joining into a partnership with a bunch of economic basket cases. Turkey's economy has held up extremely well over the past 5 years of turbulence. When comparing Turkey's stock market to the major players in the EU, Turkey comes across as a model of growth. The benchmark Turkish equity index, the ISE National 100 Index, is up 25% so far in 2012. Here's how it stacks up against the stock markets of Germany, France, Spain and Italy:
If we broaden the time horizon to reach back to 2007 before the beginning of the crisis, the disparity gets even larger:
Now to be fair, we need to check on the performance of the currencies to see if the Turkish authorities artificially juiced growth through currency devaluation. Unfortunately we only have currency data going back to Nov 2010 (if anyone knows of an online source of historical currency data, we'd very much appreciate hearing about it).
The Turkish Lira has weakened a "not insignificant" 30% over the past 21 months. By comparison, the Euro has gone through its own bout of devaluation, albeit half of what the Lira has experienced. Yahoo does have data for the crosses going back to mid 2007 which changes the amounts to 40% and 10% devaluation (vs. the USD) respectively.
The take away from all this is that the differential in normalized growth between Turkey and the rest of Europe is not as significant as initially indicated, but there's still a gap of roughly 25% growth between Turkey and the 4 European majors combined.
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