Turkey granted EU market status

The revalued lira is a major part of Turkey's economic reforms

Turkey has been granted "market economy" status, a key hurdle on the road to full membership of the EU.

The status, a prerequisite for joining the EU, is expected to boost confidence in Turkey's economy among domestic and foreign investors.

The European Commission said Turkey must continue its economic reforms and abide by a pledge to open its borders to Cypriot trade.

Turkey is expected to include Cyprus in a free trade deal it has with the EU.

Functioning market

"Turkey can be regarded as a functioning market economy, as long as it firmly maintains its recent stabilisation and reform achievements," a report by the European Commission said.

Critics say the pace of reforms in the country has slowed in the past year.

Turkey began EU entry talks just over a month ago and is expected to spend at least 10 years implementing promised reforms and adopting thousands of pages of European law.

An annual progress report is also scheduled to be released on Croatia which started membership talks alongside Turkey on 4 October.

A separate report on the former Yugoslav Republic of Macedonia is expected to recommend giving it official candidate status before the end of the year.