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"Membership of the EU is a strategic aim of our country. We are fully determined to implement the political and economic criteria that will allow our people to attain the highest standards in all fields," Turkey's Foreign Ministry said in a statement. Turkish Foreign Minister Ali Babacan earlier told reporters that Ankara thought some of the criticism was unfair.
Turkey must speed up political and legal reforms if it wants to improve chances of EU membership, EU's executive arm, the European Commission, said in an annual progress report.
The Commission for the first time declared Turkey a functioning market economy, a crucial step for eventual EU membership, but it also said the country's reforms had stalled due to political rows.
"Despite its strong political mandate, the government did not put forward a consistent and comprehensive program of political reforms," an annual progress report said.
PROGRESS INSUFFICIENTWednesday's report listed areas where insufficient progress towards democratic standards had been made, including the military, anti-corruption efforts, human rights, gender equality and respect for minorities.The slow down was due in part to government paralysis caused by attempts to ban the ruling Justice and Development Party (AKP) over complaints that its Islamist roots could undermine Turkey's secular traditions, EU Enlargement Commissioner Olli Rehn told a news conference to give information on progress reports released by the Commission.
Rehn praised Turkey for its role in defusing conflicts in the Caucasus, where a brief war erupted between Russia and Georgia, but urged Ankara to help end the division of Cyprus after the launch of reunification negotiations.
The EU report said high level officials make harsh criticisms against the Turkish press after news on allegations of government corruption and the fight against terror.
The report also said although Turkish Penal Code 301, a law that makes insulting Turkishness a crime, has been amended, the law remains in force to a large extent.
It praised a new law adopted in February 2008 that makes it possible for non-Muslims to own property under the "Foundations Laws".
The EU Commission strongly condemned the terrorist organization PKK for the murder of humans.
More generally, a "lack of dialogue and spirit of compromise between the main political parties had a negative impact on the smooth functioning of the political institutions," the report said.
The report is unlikely to significantly affect the negotiations regarding Turkey's EU membership, Rehn earlier said.
The EU opened entry talks with Turkey in 2005, but there has been little progress amid disagreements over Cyprus and opposition from France, which took over the bloc's presidency from Slovenia on July 1 for six months, among other EU countries, including Austria and Germany.
CROATIA GETS EU BOOST
Croatia could wrap up entry talks with the European Union next year if it steps up preparations, the European Commission also said.
"It is not a blank check for Croatia. The ball is in Croatia's court," EU Enlargement Commissioner Olli Rehn said.
While the report gives no actual entry date, diplomats say Croatia, a former Yugoslav state of 4.4 million, could become the EU's 28th member in 2011 if it concludes accession talks next year and the standard procedures are completed on time.
The Commission said it might propose lifting the travel visa obligation on some Balkan countries next year. Serbia could get EU candidate status then if it increased reform and cooperated with the U.N. war crimes tribunal for former Yugoslavia.
Macedonia -- embroiled in a row over its name with Greece -- has had the status since 2005, but has not begun membership talks. The Commission report did not give Macedonia the green light to start entry talks that it had wanted.