Chapter 33 entitled Financial and Budgetary Provisions was opened to negotiations at the meeting of the Intergovernmental Conference in Brussels on June 30 2016.

After two years of standstill in Turkey’s EU negotiation process, the chapter on Economic and Monetary Policy was opened to negotiations last year in December. This was followed this year by the opening of Chapter 33 which constitutes a positive development for the progress of the accession negotiations. As a result of the opening of Chapter 33 to negotiations, the total number of chapter opened so far has reached 16.

What is in Chapter 33?

The chapter mainly covers the rules concerning the financial resources for the contribution of all member states to the EU budget. The Budget resources are mainly composed of the traditional own resources consisting of customs duties on imports from outside the EU, the sugar levies, the agricultural duties; own resources based on value added tax (VAT) and own resources based on growth national income (GNI) of each Member State. All Member States must establish the necessary administrative capacities in order to ensure the necessary coordination for the EU budget, the correct calculation of the contributions regarding their own resources and the collection, payment and auditing of their own resources. 

The chapter 33 does not include any opening benchmark. This chapter is directly linked with the alignment of the relevant part of the EU acquis is directly. The implementation of legislation is expected to take place once the accession to the EU has been realised. Therefore the legislation in question must be transposed into national law following the membership to the EU. It is noteworthy to highlight that the content of this chapter is also closely related to other chapters such as agriculture and rural development, customs union, statistics, taxation and financial control.  

Turkey’s Alignment with Chapter 33

Chapter 33 was one of the chapters blocked by France for a significant period since it was among the four chapters blocked during the Presidency of Nicolas Sarkozy with the argument that the opening of these chapters would facilitate Turkey’s EU accession. After the election of Francois Hollande as the President, an improvement was witnessed in Turkey-France relations which led to the decision of lifting the obstacle regarding the opening of Chapter 33 to negotiations.

Turkey’s alignment with this chapter is considered to be at an early stage in this chapter. Measures leading to stronger coordination structures, reinforced administrative capacity and the establishment of implementing rules would have to be proposed before the realisation of the accession. According to the assessments made within the framework of 2015 Progress Report published by the European Commission, Turkey’s customs legislation is considered to be largely aligned with the acquis in the area of traditional own resources while the preparations for the resource based on VAT to calculate the statistical VAT based have not started yet. It is emphasised that Turkey needs to take additional measures to combat fraud in VAT and in customs duties so as to ensure the appropriate contributions to the EU own resources system upon accession. On the other hand, regarding the GNI-based resource, Turkey continues to align the compilation of its financial and statistical data with the European System of Accounts.

Regarding the administrative capacity, Turkey will need to take new measures to reinforce its administrative infrastructure by the time of its accession. In this regard, stronger coordination structures and the establishment of implementing rules for the accurate collection and efficient monitor of their own resources as well as for the preparation of reports to the EU are required.    

The opening of Chapter 33 bears a critical importance since it indicates that both Turkey and the EU are committed to progress towards Turkey’s EU membership. The lift of the obstacle by France regarding the opening of this chapter to negotiations represents a positive development regarding the revitalisation of Turkey’s EU accession process and it constitutes a good example in pursuing the lifting of the remaining obstacles on the other chapters.