(Bloomberg) -- Turkey’s government said it’s considering a request from a leading ally to bring forward landmark presidential and parliamentary elections to late August, triggering falls in the lira, stocks and bonds.
Devlet Bahceli said his nationalist MHP party would support any move to advance polls currently scheduled for November 2019, and he suggested doing so by more than a year to Aug. 26. Asked whether the government was surprised by the MHP position, Deputy Prime Minister Bekir Bozdag said the ruling AK Party would evaluate the call and make a statement.
“The AK Party has a tradition of holding elections on time, and we had stated that the vote will take place as scheduled. But authorized party organs should evaluate this and it will be debated,” Bozdag told reporters in parliament. An announcement will be made after discussions chaired by President Recep Tayyip Erdogan, he said. Erdogan, who immediately gathered with Prime Minister Binali Yildirim and senior members of the AK Party, said he would meet Bahceli on Wednesday.
Until now, the government has denied speculation that it wanted to move up the crucial votes, which are intended to abolish the job of prime minister and formally enshrine executive powers in the president’s office. In its almost 16 years in power, the AK Party has never called early elections.
Turkey’s lira weakened and stocks erased earlier gains.
The main opposition CHP accepted the challenge of an early election. “We’re always ready, said Bulent Tezcan, the party’s deputy chairman. “Turkey’s problems can only be solved by the nation’s will.”
Even before the formal shift in Turkey’s power center, Erdogan has been running the country as its sole political authority, using extraordinary powers granted him following a failed coup attempt almost two years ago.
He has overseen a crackdown on political opponents and ordered the army into Syria to hit Kurdish militants there, winning the support of Turkish nationalists but damaging ties with the U.S. and the European Union.
The Aug. 26 date suggested by Bahceli marks the anniversary of a key military victory over Byzantine forces more than 900 years ago, and could be an attempt to capitalize on the rising nationalism that’s greeted the Turkish army’s offensives.
Under the new system, the president will prepare the budget, dissolve parliament and appoint high-level officials, including ministers and some top judges. He or she would also be able to declare a state of emergency restricting basic rights and freedoms, a power currently held by the government.
In the April 2017 referendum that approved an empowered presidency, Erdogan won only narrowly, and most of his parliamentary landslides were secured with less than 50 percent backing. For a first-round victory whenever the next presidential ballot is held, he’ll need a clear majority.
“Early elections have been mooted for some while but they’re only a realistic possibility if Erdogan is assured he can win, and win in the first round,” Nigel Rendell, a senior analyst at Medley Global Advisors in London, said by email. “This looks a high-risk strategy for him at the moment.”
The business world was expecting 2018 to be a “year of structural reforms and a fight against inflation, but early elections would usher in a period of setback” for both objectives, Erol Bilecik, head of the influential business group Tusiad, told Bloomberg by phone.
Umit Ozdag, deputy chairman of opposition Iyi Parti, said Erdogan and Bahceli might be “forced to take an early election decision due to fear of an economic collapse,” according to Hurriyet newspaper.
Investors have warned that the government’s stimulus to spur growth and unemployment in the run up to polls was overheating the economy at a time when the lira is being battered by fallout from the war in neighboring Syria.
Erdogan on Monday accused the Turkish financial industry of exploiting regional turmoil to weaken the currency, calling the efforts “treason.”
On Tuesday, Bahceli said Turkey “urgently” needs to switch to the executive presidential system as he returned to the theme. “It is a must to spoil the game of those who are aiming to stir chaos,” he said. “Time has come to spell the end of speculations on whether there will be an early election or not. There is no other solution left.”
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