The ruling Justice and Development Party (AK Party) won praise and congratulations from the European Union and the United States on Monday after it was re-elected to government with a landslide victory.
The stock market and business circles were also in high spirits on Monday after the AK Party win, which is expected to boost the financial stability and uninterrupted growth that has taken place over the past four-and-a-half years. The İstanbul Stock Exchange (İMKB) hit a record high after opening up 4.84 percent on Monday.
The benchmark İMKB-100 index gained 2,689.69 points on Friday's close to the finish first day of the week at 55,625.44, boosted by the prospect of continued economic stability, and hit an all-time high of 55,912.80 points during the second session.
The Turkish lira appreciated 1.33 percent and, already trading at a more than two-year high, strengthened to 1.2545 against the dollar as bond yields fell. The 1.2465 exchange rate is key, marking a six-year high against the dollar. It would take the lira back to the July 2001 level to which it fell after a currency peg was abandoned during the 2001 financial crisis.
In Brussels the EU saluted the landslide re-election of the AK Party. The election win gave Turkey's supporters in the bloc that the candidate country would remain committed to membership reforms, despite negative signals sent out by new French leader Nicolas Sarkozy over the past few months. Congratulating Erdoğan on his victory, European Commission President Jose Manuel Barroso said: "Prime Minister Erdoğan has given his personal commitment to the sustained movement toward the EU."
"It is essential that the new government will relaunch legal and economic reforms with full determination and concrete results," EU Enlargement Commissioner Olli Rehn said, stressing the need for greater freedom of expression and religion in Turkey. He said the EU could open negotiations in a number of new policy areas by the year-end.
In Ankara the US Embassy congratulated Turkey "on its vibrant democracy and commitment to free and open elections" and said "Turkey's voters have once again demonstrated their confidence in democracy and the rule of law."
Güncelleme Tarihi: 24 Temmuz 2007, 14:23
EU hails poll results, urges Erdoğan to up reform tempo
The European Union saluted the landslide re-election of Turkish Prime Minister Tayyip Erdoğan's center-right Justice and Development Party (AK Party) on Monday and urged him to press ahead with the currently stalled reforms required for EU membership.
"It is essential that the new government relaunch legal and economic reforms with full determination and concrete results," EU Enlargement Commissioner Olli Rehn told reporters at a meeting of EU foreign ministers in Brussels, stressing the need for greater freedom of expression and religion in Turkey.
Congratulating Erdoğan on his victory, European Commission President Jose Manuel Barroso said, "Prime Minister Erdoğan has given his personal commitment to the sustained movement toward the EU."
Swedish Foreign Minister Carl Bildt said he believed the win would bring Ankara closer to the EU and said voters had given Erdoğan an "impressive mandate." British Prime Minister Gordon Brown said he hoped that the stunning electoral victory of Erdoğan's party would "bring Europe and Turkey closer," as his government's Foreign Secretary David Miliband urged the bloc to support Erdoğan's efforts to lead a stable government.
Congratulating Erdoğan on his election victory, Greek Prime Minister Costas Karamanlis said he hoped it would contribute to Turkey "fulfilling all the obligations" for EU membership, in an apparent reference to Ankara's refusal to open its ports and airports to EU member Greek Cyprus.
Italian Prime Minister Romano Prodi telephoned his Turkish counterpart to congratulate him, while he also reiterated Rome's strong support for Turkey's full EU membership. Italy's Foreign Minister Massimo D'Alema sent separate congratulation messages to both his counterpart, Foreign Minister Abdullah Gül, and Erdoğan.
Austrian Foreign Minister Ursula Plassnik, whose country has the highest public opposition to Turkish EU entry, told reporters: "We are all interested in having a modern, dynamic, successful Turkey as a partner for the EU."
Transatlantic US support for the new government appeared via a written statement released by the US Embassy in Ankara. "The United States congratulates Turkey on its vibrant democracy and commitment to free and open elections. Turkey's voters have once again demonstrated their confidence in democracy and the rule of law. We look forward to working with the new government once it is formed and all members of the new parliament on issues of concern to both our countries," the US Embassy's brief statement said.
As of Sunday night, while the counting was still going on, US Deputy Assistant Secretary of State for European and Eurasian Affairs Matt Bryza described Turkey's elections as a "great success."
"Once again the Turkish democracy worked. It's a great success. By all accounts the elections were free and fair, and gave another example of Turkey's constitutional processes and secular democracy. Nobody can question the Turkish democracy," Bryza was quoted as saying by the Anatolia news agency. Ankara Today's Zaman with wires
Capital markets, business world welcome election results
Turkish financial markets rallied strongly on Monday as investors welcomed a resounding general election victory for the ruling Justice and Development Party (AK Party) and anticipated that it would press ahead with its pro-business, reformist agenda.
The İstanbul Stock Exchange (İMKB) hit a record high after opening up 4.84 percent on Monday on assurances of another five years of AK Party government, following the party's stunning win in Sunday's snap elections.
The benchmark İMKB-100 index gained 2,689.69 points on Friday's close to finishfirst day of the week at 55,625.44, boosted by the prospect of continued economic stability, and hit an all-time high of 55,912.80 points during the second session. The Turkish lira appreciated 1.33 percent and, already trading at more than two-year highs, strengthened to 1.2545 against the dollar as bond yields fell. The 1.2465 exchange rate is key, marking a six-year high against the dollar. It would take the lira back to the July 2001 level to which it fell after a currency peg was abandoned during 2001 financial crisis.
A Investment Vice General Manager Murat Salar said the Turkish economy will enter a more positive trend after the election of a new president if the conditions of international markets do not change. "The real rally may start after the presidential election," he said, adding that the single-party government meant stability and that this automatically contributed to capital markets. Salar said the İMKB-100 Index may go up to 60,000 because the main trend was upwards. He also said the dollar may fall below YTL 1.20.
"This result is the one the markets had hoped for, and as a result they are rallying. Unless the AK Party makes some unexpected announcements regarding the presidency, the lira could go toward 1.20," said Beat Siegenthaler, senior strategist at TD Securities in London.
"Initial comments from [Prime Minister Tayyip] Erdoğan suggest that he intends to take this opportunity to further cement his party's reputation, at least abroad, as a responsible, business-minded party," Siegenthaler said.
"An AK Party victory was priced in, but the scale of the victory is larger than most people expected so there may be room to go a bit higher on Turkish asset prices," said Cüneyt Başaran, a bond trader at Commerzbank in London.
Business world ok with results
The results of the election also received positive reactions from economic circles and the business world.
"This is the best-case scenario for markets," said analyst Simon Quijano-Evans. "The AK Party's economic success was the key factor in its victory," economist Eser Karakaş of Bahçeşehir University said.
Goldman Sachs economist Ahmet Akarlı described the election result as the expected market-friendly outcome. "The AK Party has renewed its mandate with a landslide victory and is now in a position to set up a single-party government. This should help secure policy continuity," he said.
Capital Markets Board (SPK) President Turan Erol said Turkey's economy would continue growing. He added that Turkey has entered a long-term foreign investing period, and it is expected that foreign capital will start to come to Turkey by investments through small and medium-size enterprise (SMEs) and that they are expected to prefer SMEs. He pointed out that in this period, foreign investment in the economy's real sectors, including real estate, energy and infrastructure, would significantly accelerate. "The industrial sector and SMEs will get a significant share of this. With foreign investment, Turkey, just as it was in Ireland, will enter more balanced and more lasting growth trend."
Chairman of Independent Industrialists and Businessmen's Association (MÜSİAD) Ömer Bolat said with the election results, the public gave a message favoring the continuation of stability and confidence and an increase in services for the public.
Evaluating the election results, Bolat said the winner of the July 22 elections are stability, democracy and welfare aspirations. Bolat pointed out that the 85 percent voter turnout was very high, although the elections were in the middle of the summer. "After this result, it is satisfying that Parliament will be composed of three parties and independents in terms of representative democracy," noted Bolat.
Bolat said the tension, imposition and crisis created during the presidential election were ended by the public will. "Our citizens have affirmed the policies, economic performance of the government and the stability established by the government."
Bolat also noted it was revealed by the elections that the parties that did not participate in the presidential election quorum were not approved of. "I believe the ruling party and the opposition parties should take lessons from this process," Bolat added. "A new period has been opened with this new Parliament. The government and the opposition parties should carry on economic, social and foreign policies on a common ground with common sense."
Pointing out that the general elections indicate the Turkish people's desire for a single-party government and stability, İstanbul Textile and Apparel Exporters' Association (İTKİB) Chairman Süleyman Orakçıoğlu said: "One of the most important results is that the will of people has shown itself with more than 85 of the electorate participating. This demonstrates the power of the Turkish Parliament."
Orakçıoğlu noted that the election results are not only an important opportunity for the Justice and Development Party (AK Party), but for Turkey as well. Stating that Turkey's most critical need is stability, Orakçıoğlu congratulated Prime Minister Recep Tayyip Erdoğan and the AK Party on their success. "After reforms in the financial market, change hinges on opening the path to the real economy [non-financial sector], production, exports and employment. Our biggest expectation is that production and employment-friendly economic policies will be implemented to increase competition between the exporting sectors of the real economy," Orakçıoğlu said.
Foreign direct investments will continue
Chairman of the International Investors' Association (YASED) Tahir Uysal said the continuation of AK Party policies should be expected and that the market will give positive responses to this. Noting that they do not seek single-party government for stability, Uysal recalled that what mattered most was the rule of operational democracy.
Uysal also noted that there was a global liquidity surplus: "This is luck. In this framework, it is most likely we will see financial flow in the form of foreign direct investment in Turkey." Uysal underlined the amount of foreign direct investment will surpass last year's figure of $20 billion.
Konya Chamber of Commerce President and Turkish Union of Chambers and Commodities Exchanges (TOBB) Vice President Hüseyin Üzülmez said foreign investors would continue to invest in Turkey. He said the people had voted for confidence and stability as opposed to halts in EU relations and regional controversies in the Middle East. Üzülmez said they were expecting some precautions to be taken against low exchange rates.
Gaziantep Chamber of Industry President Nejat Koçer said economic stability cannot be attained in an environment without political stability, "so the results were an indicator of the need for economic stability, confidence and growth," he said. Koçer added that Turkey should continue development and reform without any interruption. "Now an emergency plan should be implemented as soon as possible to increase competitiveness and to remove obstacles to industrial production," he said.
SMEs, the central pillar of the Turkish economy, want a ministry that will represent them. Chairman of Small and Medium-Sized Enterprises Association (KOBİDER) Nurettin Özgenç said single-party rule is a significant advantage. He noted that economic recovery in macroeconomic fields, such as inflation, expansion and privatization, did not reflect on the micro level. Özgenç added: "Many things will change in economic policy. Political stability leads to economic stability and, most importantly, accomplishment." The Young Businessmen's Association of Turkey (TÜGİAD) evaluated the election results in a press release. Peace in social and political aspirations was the main focus of the written evaluation published by TÜGİAD.
The press release said that elections are the fundamental element of democracies. Emphasizing the message given by the public in favor of single-party government, strong democracy and continuation of reforms.
Today's Zaman with wires