However, they are beyond the scope of my speech today. When the productivity comparison is made between Turkey and the new EU member states, it is seen that the average gross value added per employee was 10.9 in Turkey for the year 2004, while the same figure was 4.1 for Bulgaria, 4.2 for Romania, 10.9 for Poland, 11.5 for Hungary and 11.7 for the Czech Republic.12 Turkey is not lagging behind these countries. It also has to be taken into consideration that some of these countries figures reflect their positions after accession. But, Turkey has just started the negotiations. Most probably, with the reinforcements of the structural reforms during the accession process, Turkey will be even better off in terms of productivity when the date of accession comes.13 In fact in the last four years, as I mentioned before, the cumulative increase in labour productivity has been 35 percent in Turkey. And it is expected that in the upcoming period, increases in total factor productivity will be one of the most important contributors to our growth potential. As a consequence of the envisaged huge productivity increase and according to the baseline scenario on the EU accession process, the Turkish State Planning Organization (SPO) estimates that by the year 2015, the Turkish economy would grow by 82 percent on a sustainable path. This implies an average growth rate of 6.2 percent.14 The other items in the decomposed income per capita equation are employment, dependency ratio and participation rate which are closely related to a country’s demographic factors.

It was clear that advances in information and telecommunication technology had a major impact on the financial services industry, generating various financial innovations and new business methods, such as internet banking, electronic money, on-line broking services and electronic trading systems. For the real economy, however, the impact was much harder to assess, not least due to a lack of reliable statistics and interpretation difficulties regarding “new economy”-related developments in productivity. As Nobel Prize Laureate Robert Solow said in 1987: “You can see the computer age 2 everywhere but in the productivity statistics”. The difficulty in interpreting these developments therefore suggested caution on the part of policy-makers. The interaction of the “new economy” with developments in financial markets Let me now turn to the interaction of the “new economy” with financial markets. It has been long debated what role the development of financial markets played in fostering belief in the “new economy”. In most industrialised nations, on the waves of financial liberalisation and globalisation, capital markets have been growing tremendously over the past two decades, both in terms of volume and value of transactions and in the development of new types of securities. For the euro area, the preparations for and the actual introduction of the euro have undoubtedly been an important catalyst, improving the efficiency of the euro area capital markets and, to some extent, reducing existing information asymmetries, for both the equity and debt markets in the euro area. This has certainly been a very positive development which I wholeheartedly support.