‘We cannot afford to miss this train of globalization: we either become a part of Europe or we face total isolation and marginalization.’ These were the words of the then Prime Minister Tansu Çiller (Dünya, 14 April 1995). They were used to justify entry into a Customs Union with the European Union (EU), which was approved in December 1995. This chapter will explain why Turkey’s developmental options came to be seen in such stark terms. What was the role of the state in Turkey in shaping the agenda of relations with Europe? Does the Turkish state consider attachment to the EU as a strategy for development? While there is no doubt that globalization has significantly limited the ability of the nation-states to carry out their regulatory, productive and distributive functions (Cerny 1990; Strange 1996), this chapter will argue that the role of the so-called ‘residual state’ in Turkey was crucial in utilizing and implementing policy options and hence was able to shape the outcome and patterns of regionalist policy interactions with the EU.