Turkey faces a snap election this autumn after talks on forming a coalition government broke down on Thursday, increasing uncertainty in the NATO member state as it battles Islamic State insurgents on its borders and Kurdish militants at home.
Prime Minister Ahmet Davutoglu said a fresh election now appeared to be the only option after last-ditch negotiations between his Islamist-rooted AK Party and the main opposition CHP yielded no deal. He urged parliament to call for a new vote and said he would prefer it was held as soon as possible.
“An understanding has emerged that there are no grounds right now to form a government partnership,” Davutoglu told a news conference after meeting CHP leader Kemal Kilicdaroglu.
“It seems that … the duty of appealing to the national will again once all channels are exhausted, to ensure the permanent stability of our country, has increased greatly as a possibility. Actually it has become the only possibility.”
The news sent Turkish assets tumbling. The lira currency TRYTOM=D3 weakened to a record low and stocks fell as much as three percent. Many investors had hoped for a deal between the AKP and the pro-business, centre-left CHP, and fear another election will serve only to prolong instability.
“From a sentiment standpoint, Turkey needs a snap election right now like it needs a hole in the head,” said Nicholas Spiro, managing director of Spiro Sovereign Strategy in London.
The political uncertainty coincides with almost unprecedented threats to Turkey’s national security.
