Turkey’s president Recep Tayyip Erdogan praised a decision to repeat Istanbul’s mayoral election, which his party narrowly lost, saying a rerun would remove the pall cast over the March vote by allegations of “organised corruption”.
The Supreme Electoral Council late on Monday nullified the results of the March 31 poll in which the opposition’s Ekrem Imamoglu defeated the ruling party’s candidate by about 13,000 votes. A new election will be held on June 23.
On Tuesday the Turkish lira fell to its lowest level since October while the country’s bonds came under pressure, as the controversial decision to annul the election results sharpened investor concerns.
Mr Erdogan’s ruling Justice and Development party (AKP) had contested the Istanbul poll result, claiming voter fraud and other irregularities. The president told members of his party that he had initially been prepared to accept the result but that a series of recounts in the ensuing weeks revealed that “15,000 AKP voters’ electoral will had been usurped”.
“I sincerely believe there was organised corruption and full illegalities and irregularities in the Istanbul municipality election,” said Mr Erdogan.
The decision to rerun the mayoral election outraged the opposition, with the head of Mr Imamoglu’s Republican People’s party (CHP) accusing the electoral board members of colluding with the AKP. “You are destroying the rule of law and justice. With this decision, they rejected the people’s will. They were unable to prove that a single voter committed fraud,” said Kemal Kilicdaroglu, CHP chairman.
Meral Aksener, head of the opposition Good party that backed Mr Imamoglu, said the decision to nullify the March vote amounted to “theft”.
A number of smaller parties, including the conservative Felicity party which won about 100,000 votes in the disputed poll, also expressed support for Mr Imamoglu, signalling they could withdraw their candidates from the rerun election.
Tusiad, Turkey’s largest business group, said the rerun would distract from efforts to rescue the country’s economy from recession. “During a time when we need to be focused on an agenda of comprehensive economic and democratic reforms, a return to an election environment is worrisome,” it said on Twitter.
Mr Erdogan lashed out at members of the business community for their “strange” remarks after the election body’s ruling. “If you work in the economy or are a businessman, do your job,” he said. “If you are aiming to intervene with the electoral judiciary, then we know where you stand and our view of you will change accordingly.”
Over the past several months, analysts and investors have grown increasingly concerned about Turkey’s economy and finances. Declining foreign currency reserves, doubts about the central bank’s willingness to take further action to fight inflation and its high level of short-term debt have all weighed on sentiment.
The decision by authorities to annul the result of a vote that had installed an opposition figure in a high-profile role in Istanbul has further unnerved investors.
“The ruling inflicts a dramatic blow to the rule of law and weakens democratic standards in Turkey,” said Cristian Maggio, head of emerging markets strategy at TD Securities.
Turkey’s government debt came under pressure on Tuesday. Yields on the 10-year dollar-denominated paper maturing in 2029 climbed 13 basis points (0.13 percentage points) to 8.017 per cent, reflecting a fall in prices.
UK markets, the primary offshore centre for trading in Turkish assets, were closed on Monday for a public holiday, meaning Tuesday was the first chance for many foreign investors to respond to developments in Turkey.
Paul McNamara, an emerging market debt portfolio manager at GAM, said the election body’s decision might “promote a bit of capital flight as the space for people who don’t agree with Erdogan is reduced”. However, he said the news “would not spark a massive change in sentiment” as many investors thought the AKP had “little interest in democracy if they lose elections”.
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