Turkish Crisis Deepens as Premier Said to Demand Autonomy

  • Davutoglu said to be considering emergency party convention
  • Rift between party factions said to be reaching crisis levels

Turkey's Power Struggle and Market Concerns

The power struggle at the top of Turkish politics may come to a head later on Wednesday, with Prime Minister Ahmet Davutoglu planning to tell President Recep Tayyip Erdogan he needs to respect the premier’s office and let him get on with the job, a person familiar with the matter said.

Davutoglu is considering calling an emergency convention of the ruling AK party, in which delegates would vote on the leadership, should he not receive a favorable response, the person said, asking not to be named due to the sensitivity of the matter. Davutoglu has been facing intensifying opposition within the party from a group of hardline Erdogan supporters, the person said.

A party summit could be held in about 45 days should Wednesday’s meeting not end in agreement, the person said. Tensions between the two men, and the rift among their supporters in the party, are more explosive than generally acknowledged, the person said.

Erdogan, who served as prime minister for more than a decade until 2014, has transformed the typically ceremonial role of the president to a new center of power and is seeking to formalize that by rewriting the constitution. Davutoglu, his handpicked successor, is seeking to establish his own credentials as an independent policy maker.

Stocks, Lira

Rising tension between the two is undermining confidence in the $720 billion economy and comes at a time of mounting violence between government forces and the Kurdish PKK group as well as Islamic State militants. Turkish stocks dropped for a fourth day and the lira retreated as investors eyed the outcome of the meeting, scheduled for 6 p.m. local time. The currency was trading 1.2 percent lower at 2.8833 per dollar at 5:38 p.m. in Istanbul.

The meeting between the two leaders, originally scheduled for Thursday, comes less than a week after the ruling party board stripped Davutoglu of the power to name local branch heads. That move was orchestrated by Davutoglu’s rivals in the party’s management while the premier was in Qatar for an official visit, the person said.

On Tuesday, the usually soft-spoken premier angrily told AKP parliamentarians that he would reject “with the back of my hand, any job that a mortal would not think of leaving.”

Unsustainable Split

Without naming names, Erdogan said in a speech at his palace in Ankara on Wednesday that “what’s important is to not forget how you came to where you are, what you need to do there and what your targets are.”

People close to the two leaders have spoken of an unsustainable split in policy making. Areas of disagreement include management of the economy. Davutoglu and allies have argued for more orthodox economic policies, an agenda that Erdogan and those who back him blame for high interest rates and slowing economic growth, according to the person who commented on Davutoglu’s thinking.

While Erdogan and Davutoglu appear keen to deny any disputes between them, things are not going well behind closed doors,” Global Securities chief economist Sertan Kargin said in an e-mailed report.

Asked in a private meeting by AKP lawmakers to clarify his remarks in parliament, the prime minister said that he was evaluating the situation, according to a person present at the discussions. An official with knowledge of the matter, however, said Davutoglu has no plans to resign. Both spoke on condition of anonymity to discuss private deliberations.

Graft Probe

Investors “will be looking for the statement after today’s meeting. A statement on the elimination of snags between the president and the prime minister can calm down the markets. A statement in the opposite direction could deepen the uncertainty,” Is Yatirim, an Istanbul-based brokerage, said in a note.

Rifts between the leaders emerged shortly after Davutoglu took office. The first major public policy split came when Davutoglu proposed a “transparency package” aimed at tackling corruption. Erdogan, who quashed a corruption probe while prime minister, said the measure was premature and it was withdrawn in February 2015.

Erdogan also scoffed after Davutoglu persuaded the European Union to move up its timetable for waiving visas for Turkish citizens to June. He said the agreement had been reached when he was prime minister, and that no one should present a four-month change in the schedule as a political victory.

Many of the country’s leading news outlets published stories on Wednesday speculating over whether Davutoglu would resign. Pro-government columnist Abdulkadir Selvi wrote in Hurriyet newspaper that, when asked whether his speech to the party on Tuesday was a farewell speech, the prime minister said “I haven’t yet decided yet.”

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