I personally think that acceptance of the euro in daily life and financial transactions will come faster in Turkey than in other countries, for three reasons: the large numbers of Turkish citizens living in Europe, the large volume of trade and tourism transactions with Europe, and the consistent stability of the deutsche mark for 20 years and more. The introduction of the euro has reduced transaction costs and removed the risks connected with more volatile currencies, increasing the incentives for European capital markets to rely more on direct financing. A deep, liquid, and efficient euro bond market will be welcomed by Turkish sovereign and private bond issuers. Moreover, the volume of transactions in the euro bond market is expected to be much larger than today. 1  BIS Review 109/2000  Increased acceptance of euros in Turkish trade and financial transactions, of course combined with an environment of low inflation, will make direct investments in Turkey more attractive to European firms. Turkey’s presently very small total of direct foreign investments from European investors would surely be encouraged to grow by the disappearance of foreign exchange risks. Under such circumstances, both Turkish and European banks could be expected to increase their merger and acquisition activities. For the short term, the most important goal is to promote the euro as an international currency. Success will crucially depend on the new currency’s acceptance by the people of the EMU countries and other countries as well.
And no doubt the world economy will also have a share in these benefits. 3  BIS Review 109/2000