By Katinka Barysch and Charles Grant

Some of Turkey’s critics say that it has no place in the EU because it is not a European country. Others criticise the quality of its democracy. The first group tends to focus on the Islamist philosophy of the ruling AK party, while the second group complains about the role of the armed forces in public life. The dramatic series of events in Turkey over the past four months should go some way towards reassuring both camps.

In April, the armed forces threatened the AKP over its choice of Abdullah Gul as its presidential candidate. The constitutional court declared the first round of voting in the parliament invalid. Millions marched in the streets in defence of secularism. Prime Minister Recep Tayyip Erdogan called an early election to defuse the crisis. His AK party won enough votes to form another single-party government.

These events show that Turkey’s democracy is maturing fast. Having hinted that it might launch a coup, the army has respected the democratic process and stayed in its barracks. The AKP won voters’ confidence by promoting a moderate brand of Islamism, and by adding more secular candidates and women to its electoral list. Celebrating his re-election, a statesman-like Erdogan called for reconciliation, reform and universal respect for Turkey’s secular constitution.

Erdogan will need all his considerable political skills to get through the challenges of the next twelve months. The election outcome was good for the AKP but it showed a country split down the middle. With 47 per cent of the vote, the AKP did significantly better than in 2002. Then, much of its support was due to voters’ disillusionment with a bickering and self-serving political establishment. This time round, its victory was a reward for good economic management and – despite the occasional backtracking – political moderation.

Some 38 per cent of Turkish voters opted for nationalist parties, if one adds up the votes of the hard-line MHP, the nominally centre-left CHP and Cem Uzan’s radical GP. There is little that unites these parties, apart from their attempts to portray the AKP as radical on Islam and limp-wristed on security. But the scare tactics of the secular establishment and the army obviously failed to convince most Turks.

Three of the 14 parties that ran in the election overcame the 10 per cent vote threshold for parliamentary representation; in the previous parliament it was only the AKP and the CHP. Now they are being joined by 71 MHP members and 28 ‘independents’, most of whom are from the Kurdish party, the DTP. So although the AKP received a higher share of the vote than in 2002, it will have fewer seats in parliament. With 342 MPs, the AKP still has enough votes to pass laws, but not to change the constitution or, importantly, elect a new president.

Turkey will hold a referendum on an AKP proposal to move the presidential election from the parliament to the people, but not until the autumn. So the next president will once again be chosen by Turkey’s 550 MPs. Two-thirds (or 367) of them need to be present to make the first round of voting valid, following a constitutional court ruling in April. If the CHP and the MHP boycotted the presidential ballot to prevent an AKP candidate winning, there would probably be another early election. Erdogan might try to push through his candidate with the help of the ‘independents’. But then the army would decry an Islamist-Kurdish conspiracy and roll back onto the political scene. It will not be easy to find a candidate that looks acceptable to both the secular-nationalist opposition and the more conservative parts of the AKP. But Erdogan should be able to do it. He may placate his own AKP by hinting that he could himself stand in the first popular presidential poll. If, as seems likely, Erdogan finds a compromise presidential candidate, he would undermine the army’s claim that Turkey’s secular order is under threat.

The AKP also faces tricky decisions over Iraq. It was perhaps no coincidence that General Yasar Buyukanit, Turkey’s army chief, asked for a mandate to take action against outposts of Kurdish PKK guerrillas in Northern Iraq, just a few months before the election. The government had little choice but to say No. Such cross-border incursions would wreck what is already a tense relationship with Washington and create considerable strains with the EU. And then there is the risk of the military getting bogged down in a prolonged guerrilla war on foreign territory. Nevertheless, the army’s persistent hectoring made the government look weak on the security front, and probably helped to increase the MHP’s share of the vote. If the PKK is sufficiently provocative – for example letting off big bombs in tourist resorts – the government would have little choice but to endorse a military intervention.

Once the presidential election is out of the way, the new government will have to get down to work. The AKP gets a lot of its legitimacy from its impressive economic record. Markets jumped with joy over the AKP’s re-election. But the government now faces the tricky task of putting its reform successes on a more sustainable footing. This will include continued privatisation (not least to attract the money to finance a current-account deficit that hit a worrying 8 per cent of GDP last year); an overhaul of social security; further improvements in the budget; better infrastructure (two million people a year are moving from the rural areas into already overcrowded cities) and labour market reforms. In this young country, around a quarter of a million jobs need to be created every year, just to keep the unemployment rate constant at 10 per cent.

The AKP will have to navigate these tricky waters at a time when the EU anchor has become loser. Nicolas Sarkozy has vetoed the opening of the chapter on economic and monetary union in Turkey’s accession negotiations, because he says that only full members need to bother with single currency rules. And Turkey, he claims, will not achieve that status so long as he is president. He wants the EU have another big debate about the future boundaries of Europe in December. His views on that are clear.

Erdogan is to be congratulated for his measured response to Sarkozy’s tactics. In the past, Turkish politicians often warned that EU wavering would result in a nationalist backlash and political instability in Turkey. But now Erdogan’s government is promising to soldier on with its EU preparations. “We will be ready in 2014”, he says, “irrespective of what the EU does”.

Much of the AKP’s positive agenda since 2002 has been inspired by the objective of EU accession. The party’s pro-EU credentials helped it to mitigate the deep suspicions it encountered among the urban elites. What would happen to the AKP’s reform plans and its legitimacy if Sarkozy succeeded in ruling out Turkey’s full membership? The new government needs the EU anchor to consolidate its successes.

Katinka Barysch is chief economist and Charles Grant is the Director of Centre for European Reform

by Katinka Barysch

I have recently come back from Turkey, where the mood is a mixture of relief, hope and anxiety: relief that the army has remained in the barracks; hope that the early election in July will result in a workable compromise between the AKP and the secularists; and anxiety that the crisis that started in April has done lasting damage to Turkish society and its political system.

As far as elections go, the parliamentary poll on July 22nd will be fairly momentous. Even seasoned political observers cannot predict the outcome. There have been no reliable opinion polls since the Erdogan government was forced to abort the presidential election and call an early parliamentary one. Moreover, Turkey’s electorate is fickle at the best of times, and recent dramatic events may have swung millions of voters. Finally, the smaller parties are merging, or trying to do so, to increase their chances of overcoming Turkey’s 10 per cent threshold for parliamentary representation.

Few people doubt that the AKP will once again be the strongest force. Its share of the vote could even slightly exceed the 34 per cent it received in 2001. However, its ultimate political strength will depend on how many parties manage to overcome the 10 per cent threshold. Only two did so at the last election (the AKP and the centre-left Republican People's Party, or CHP), while 45 per cent of votes were ‘wasted’ on parties that did not enter parliament.

The CHP has performed badly in opposition, and its leader, Deniz Baykal, has few friends. But the party will benefit from people’s determination not to waste their votes again and from its recent merger with the other centre-left party (Democratic Left Party, DSP). The centre-right parties – Motherland (Anap) and the True Path Party (DYP) – also tried to merge, unsuccessfully. Even if they get their act together before July, the unedifying spectacle of squabbling party leaders will have put off their supporters. Instead, there could be up to a dozen MPs from the Kurdish South-East in the new parliament. Although their party (the Democratic Society Party, or DTP) will not get 10 per cent of the vote nation-wide, its candidates stand a good chance as independents. Another wild card is the ultra-nationalist MHP (Nationalist Action Party) which may gain from blaming any future terrorist attacks on the AKP. If, as seems likely, the Erdogan government does not give the Turkish army the mandate it wants to move against PKK guerrillas in northern Iraq, the MHP will portray the government as weak on security issues.

If the CHP plus more than one other party get into parliament, the AKP would fall short of an absolute majority. Speculation about possible coalitions is already rife. A government led by the AKP and including a centre-right party would probably be good news for economic reforms and EU accession. But mutual distrust and disagreements over the issue of secularism would leave it fragile. An alternative scenario is a left-right (and maybe nationalist) coalition designed to keep the AKP out of power. Many Turks already fear a return to the bad old days of policy paralysis and political infighting.

That would be very bad news. Turkey needs a strong and focused government, to navigate through possible tensions with the EU, to deal with the PKK terrorism threat and to consolidate and build on the impressive economic achievements of recent years.

The first test for the new parliament will be the presidential election. Erdogan’s government wants to shift this election from the parliament to the people. But the required law is now stuck in the constitutional court and will eventually go to a referendum. Meanwhile, following constitutional court ruling in May, the first round of the presidential ballot in parliament now requires a two-thirds quorum to be valid. That means that any party in parliament (or a coalition of parties) can hold the government to ransom. Under these circumstances, Abdullah Gul’s presidential bid looks doomed.

The AKP may face the choice between putting forward a candidate who looks more acceptable to the secularists, or risk yet another round of elections. Or worse. The army has not withdrawn its threat of intervention in case the AKP insists on Gul as their presidential candidate.

Some people say that the current stand-off has done too much damage to Turkey already. It has revealed how deep the divisions still run in Turkish society. The Kemalists accuse the AKP of using the education system, the courts and local administration for a ‘slow motion’ Islamist coup. AKP supporters, in turn, accuse the army of doing much the same.

The fact that there is no trust in Turkish politics makes checks and balances all the more important. It seems that this – not Gul’s personality or faith – was the reason why so many people were upset about his presidential candidacy. The president has traditionally been a counter-weight to the government, so was the army. Neither seeks to run the country but both have intervened at times – be it through vetoing laws or rattling sabres – when they thought that the government was crossing a ‘red line’. Erdogan’s single-party government – so much stronger and more effective than most of its predecessors – did not look like a threat as long as the president and the army retained their independence. The nomination of Gul as presidential candidate raised the spectre of an unusually strong prime minister and a popular president both coming from the same political camp. And since the president is also (nominally) the head of the army and (practically) signs off on senior army appointments (as well as those in the judiciary and education), the army itself feared that it could be ‘infiltrated’ by Islamists.

The army argues that it is needed in politics as long as Turkey’s institutions are weak. But democratic institutions cannot prove their resilience as long as the army sees itself as the ultimate arbiter in Turkish politics. The generals probably took May’s mass demonstrations in Istanbul, Ankara and Izmir (according to some counts, 10 per cent of the electorate marched in the streets) as a sign of approval and support. They are probably wrong. It may just be a sign that Turkish democracy is vibrant, and Turkish voters are willing and able to defend their preferred way of life. Most Turks want neither an Islamist government nor a military one. Democratisation, EU negotiations, reforms and economic growth mean that the Turkish people have a lot to lose if things go wrong now.

Katinka Barysch is chief economist at the Centre for European Reform.