The European Union has floated a significant overture to Turkey by proposing its inclusion in the Single Euro Payments Area (SEPA), a pan-European payments framework designed to streamline euro-denominated transactions and reduce costs for businesses and consumers. This move, pitched last month during high-level talks in Ankara, could generate significant annual savings for Turkish businesses, consumers and the diaspora, according to the EU's envoy in Ankara.
SEPA encompasses 41 countries including all EU member states, the UK, Switzerland, and others, facilitating low-cost, efficient transfers in euros. Participation allows for standardized payments processed quickly, with fees much lower than traditional international wires. A Turkey-Europe transfer of 1,000 to 5,000 euros can cost up to 40 euros. For Turkey, whose economy relies heavily on trade with Europe—Europe is Turkey's largest trading partner with more than 200 billion euros in volume—joining SEPA could sharply cut the fees on such transfers.
KEY TALKS UNVEIL PROPOSAL
The proposal emerged from a meeting last month between European Commissioner for Enlargement Marta Kos and Turkish Foreign Minister Hakan Fidan, as confirmed by Jurgis Vilcinskas, the EU's chargé d'affaires in Ankara. Vilcinskas said SEPA could present a valuable opportunity to strengthen Türkiye’s economic integration as a candidate country and a key trade and economic partner of the EU. It could generate significant savings annually for Turkish businesses, consumers and diaspora by making cross-border transfers in Euros as fast and as cheap as domestic ones.
A Turkish diplomatic source confirmed that during Kos' February 6 visit an offer had been conveyed to Ankara, adding the SEPA issue was under the jurisdiction and coordination of the Finance Ministry. Turkey has been an EU candidate country since 1999. With bloc membership talks effectively stalled for years, both sides say they want to modernize their customs union.
Turkey's lira has weakened significantly against the euro, with the exchange rate around 50 lira per euro.
ECONOMIC IMPACTS FORECAST
SEPA could bring significant savings, especially for the large Turkish diaspora across Europe. Users in far smaller Balkan candidates Albania, Moldova, Montenegro and North Macedonia, which adopted the scheme last year, could save up to 500 million euros. In an interview this month, Odile Renaud-Basso, president of the European Bank for Reconstruction and Development, said SEPA would basically make transactions cost-free.
Yet hurdles remain. To join, Turkey would need to align with EU rules on payment services, anti-money laundering and data protection. The Commission was ready to support Turkey in any SEPA endeavour. Turkish officials have not yet signaled a clear stance.
GEOPOLITICAL CONTEXT
This proposal unfolds against a turbulent backdrop. Turkey was also recently included in the EU's "Made in Europe" industrial policy, Daily Sabah reported.
IMPLEMENTATION ROADMAP
Next steps would involve Turkey complying with EU payment standards.