Davutoglu Set to Hold Coalition Talks as Turkey Countdown Starts

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Turkish President Recep Tayyip Erdogan asked Prime Minister Ahmet Davutoglu to begin forming a new government, starting a countdown that may end in repeat elections if opposition parties won’t join a coalition.

Davutoglu was formally re-appointed prime minister Thursday with the task of finding partners, after his governing AK Party lost its majority in last month’s vote. If he can’t put together a coalition within 45 days, Erdogan can call another election.

After an initial slide following the inconclusive June 7 ballot, Turkish financial markets have rallied on expectations that parties can reach a deal. A key stumbling block may be opposition demands to restrict Erdogan’s powers as president.

In a speech Thursday, Davutoglu ruled out any compromise on the issue. “We won’t allow any debate on the presidential post,” he told lawmakers.

Devlet Bahceli, leader of the nationalist MHP, has said Erdogan’s ambitions must be curtailed. He must move out of a new, $600 million palace he built and into a “fishbowl” in the old presidential residence in Cankaya, Radikal newspaper quoted Bahceli as saying Wednesday.

No Fishbowl

“No one can use a phrase like ‘fishbowl’ for the presidency,” Davutoglu said, accusing opposition parties of “building walls” even before he starts a first round of talks with party leaders next week.

He also accused the pro-Kurdish HDP party, another potential coalition partner, of failing to distance itself from outlawed Kurdish rebels.

“Turkey will either continue on its way with a very healthy government or we will go to the nation’s will,” Davutoglu said.

Initial discussions between the political groups have proved inconclusive. Economy Minister Nihat Zeybekci sought to reassure investors that another election “would not cause a problem in the economy.”

The failure of coalition talks would give “a bit of a shock to the markets,” which “wouldn’t welcome the additional uncertainty,” William Jackson, a senior emerging-market economist at Capital Economics in London, said by e-mail on Wednesday.

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