Turkey’s PM says Coalition Talks progressing with Main Opposition

Turkey’s Prime Minister Ahmet Davutoglu raised hopes on Thursday that a grand coalition could be formed, saying talks between his ruling AK Party and the main opposition Republican People’s Party (CHP) were progressing.

Turkey has been without a government since June 7, when Davutoglu’s Islamist-rooted, centre-right party lost its majority for the first time since coming to power in 2002.

The party now needs to find a junior coalition partner or face an election re-run. The political uncertainty has already sapped investor confidence and Finance Minister Mehmet Simsek has warned another election would raise risks to the economy.

“We are currently at a more advanced stage with the CHP,” Davutoglu told broadcaster NTV late on Wednesday. “As we have agreed on the method, the process will advance with the CHP,” he said, referring to a “framework” for a potential coalition partnership, upon which he said the parties had agreed.

Davutoglu has met with the leaders of all three potential coalition partners – the CHP, the rightist National Movement Party (MHP), and the leftist, pro-Kurdish Peoples’ Democratic Party (HDP).

He told opposition parties this week not to question the role of President Tayyip Erdogan in the political process, an issue likely to be a sticking point. Opposition politicians have signalled they want Erdogan, the AK Party’s founder, to keep out of day-to-day politics if they join any coalition government.

Coalition talks are expected to continue into a second round, which is seen as taking place as early as next week.

While the AK Party is closest ideologically to the MHP, the nationalist opposition does not want to share power in an AK Party government, Davutoglu said after meeting its leadership this week.

An alliance with the CHP would be welcomed by financial markets, who see the secular party as potentially able to rein in some of Erdogan’s more authoritarian tendencies.

However, there is a possibility the AK Party might go for a snap election, emboldened by a poll that showed five percent of voters would not back opposition parties again in such a vote, giving the AK Party enough seats to form its own government.