oreign firms have
hesitated to invest there. It remains heavily dependent on
agriculture and government service, which together employ about half
of the work force. Moreover, the small, vulnerable economy has
suffered because the Turkish lira is legal tender. To compensate for
the economy's weakness, Turkey provides direct and indirect aid to
tourism, education, industry, etc.

Czech Republic:
Basically one of the most stable and prosperous of
the post-Communist states, the Czech Republic has been recovering
from recession since mid-1999. The economy grew about 2.5% in 2000
and should achieve somewhat higher growth in 2001. Growth is led by
exports to the EU, especially Germany, and foreign investment, while
domestic demand is reviving. Uncomfortably high fiscal and current
account deficits could be future problems. Unemployment is down to
8.7% as job creation continues in the rebounding economy; inflation
is up to 3.8% but still moderate. The EU put the Czech Republic just
behind Poland and Hungary in preparations for accession, which will
give further impetus and direction to structural reform. Moves to
complete banking, telecommunications and energy privatization will
add to foreign investment, while intensified restructuring among
large enterprises and banks and improvements in the financial sector
should strengthen output growth.

Denmark:
This thoroughly modern market economy features high-tech
agriculture, up-to-date small-scale and corporate industry,
extensive government welfare measures, comfortable living standards,
and high dependence on foreign trade. Denmark is a net exporter of
food and energy and has a comfortable balance of payments surplus.
The center-left coalition government has reduced the formerly high
unemployment rate and attained a budget surplus as well as followed
the previous government's policies of maintaining low inflation and
a stable currency. The coalition has lowered marginal income tax
rates and raised environmental taxes thus maintaining overall tax
revenues. Problems of bottlenecks, and longer term demographic
changes reducing the labor force, are being addressed through labor
market reforms. The government has been successful in meeting, and
even exceeding, the economic convergence criteria for participating
in the third phase (a common European currency) of the European
Monetary Union (EMU), but Denmark,