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The Turkish economy has traditionally been characterized by high volatility with periods of significant growth followed inevitably by deep recessions. This volatility has been essentially due to a problem of political governance. The last crisis of 2001 provided the necessary impetus for reforming governance structures. The economy responded positively and Turkey has entered a period of sustained growth. In the long term, economic growth in Turkey will be fueled by the openness of the economy, positive demographic factors and productivity levels which compare favorably with the countries of Central and Eastern Europe. The main challenge will, however, be one of structural transformation addressing the dual structure of the economy and reducing the weight of agriculture.The role of the EU will be essential as an anchor helping to consolidate the reforms and to pave the way for a sustainable and high growth pattern. The EU will also benefit from a Turkey that has become a regional engine of growth.