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In politics, the influence of the powerful military was reduced, the rights of the Kurdish minority and women have been strengthened, and the constitution and criminal law have been aligned with European norms. In the economy, privatisation and liberalisation of the economy has made advances, bureaucracy has been reduced, and the reforms of the banking system and social insurance system were pushed forward. The household deficit, which was more than ten percent of the GDP in 2004, fell to below one percent in 2006. The investment law of 2003 cleared away legal restrictions and domestic and foreign investors – at least on paper – were given equal rights.



	Once one of the most important Christian churches, the Hagia Sophia in Istanbul was converted into a mosque at the end of the 15th century. It also symbolises the mercurial history of Turkey between the European and Muslim culture.
	The Topic at EXPO REAL 2007 Tuesday, 9 October 2007 SPECIAL REAL ESTATE FORUM Hall C3 2.00 pm – 2.50 pm Retail Dialogue Focus on regions: Shopping centres in Turkey For detailed information on the programme click here

Important catalysts for reform included the mutual assistance pact with the IWF in 2001 and the goal of EU accession. The start of the membership negotiations between the EU and Turkey in October 2005 was a milestone in decade-long approaches, which began in September 1963 with the Ankara association agreement with the European Community. Even if negotiations take years and results are still pending, the EU perspective alone, with its resulting alignment to European standards and EU structural aid in the form of pre-accession programmes, offers a significant location advantage for Turkey. It will also trigger more reforms. There is still a lot of work to do: inflation and the current account deficit are still high. Reforming the high deficit of social security is still pending, there are looming deficits in the energy sector, and the EU is asking for a faster political and economic alignment to EU standards in general.

Foreign investors are still coming in swarms, mostly from the EU. Foreign direct investments climbed in 2006 to a record high of roughly 18 billion US-Dollars, and more than 80 percent of these investments came from EU countries. The bank sector was the focus again, but also other industries are attracting foreign capital, whether it is the real estate market, retail or energy sector. The Essenbased project developer mfi Management für Immobilien AG wants to invest, for example, one billion Euros in ten shopping centres in the next ten years. Metro will open the first Media Markt in Turkey in the second half of the year, and the EnBW has made a collaboration agreement with the Turkish industry conglomerate Ciner Group in the Turkish electricity market. Whether Axel Springer, Remondis, Rewe, Deichmann or Eurohypo—German companies are active. Exactly 2,725 companies with a German share of capital were registered in February. Even the German- Turkish retail sector is stabile. According to the Federal Statistics Bureau, German exports in Turkey climbed by 12.4 percent to 14.4 billion Euros last year. Imports from Turkey rose by 8.7 percent to 9.1 billion Euros. Thus, German defended its rank as Turkey’s most important trading partner, but lost its position as Russia’s most important supplier because of soaring energy prices.

Managing Director of DTIHK, Marc Landau, notes a growing interest of companies in involvement in the Turkish market. Erdogan’s government reforms have created an “atmosphere of trust”. Turkey’s membership into the EU is just as important for foreign investors, notes Marc Landau, since they can contribute to eliminate non-tariff trading restrictions. The current economic boom is not the only thing attracting companies. Marc Landau also notes that the attractiveness of the Turkish market with its 72 million residents, a young and consumption-friendly population, motivated, fast-learning and well-educated employees, and attractive wages are other causes.