This paper examines the impact of the Turkish macroeconomic crisis. The study discusses the key variable that determines Turkey's vulnerability to shocks, namely the debt-to-GDP ratio and its dynamics. The authors draw attention to external vulnerability and discuss whether Turkey can import capital to accelerate its convergence with the EU without accumulating a crippling foreign debt burden. Finally, the report addresses the quality of the institutions that determine the performance of the Turkish economy in a European context.
