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ANKARA (Reuters) - A month after local elections which saw it lose control of Turkeys two largest cities, officials in President Tayyip Erdogans AK Party are questioning an alliance with nationalists which some blame for one of its biggest electoral setbacks.

FILE PHOTO: Turkish President Tayyip Erdogan and Devlet Bahceli, leader of Nationalist Movement Party (MHP), talk on the stage during a rally ahead of local elections, in Ankara, Turkey, March 23, 2019. REUTERS/Umit Bektas/File Photo

Under a deal between Erdogans Islamist-rooted party and the smaller Nationalist Movement Party (MHP), the nationalists fielded no mayoral candidate in the capital Ankara or Istanbul in the March 31 vote, and the AKP stood aside in other regions.

But the deal failed to prevent the secularist Republican Peoples Party (CHP), which had a similar pact with other smaller opposition parties, winning the mayoralty in both cities, ending a quarter century of control by the AKP and its Islamist predecessors.

The AKP is still challenging its narrow loss in Istanbul, Turkeys largest city and business hub where Erdogan himself served as mayor before the party swept to power nationally in 2002. It has dominated Turkish politics ever since.

While the Istanbul appeal drags on, the rare defeat has prompted questions within the party over campaign strategy. Although the alliance helped them win a majority of votes nationwide, AKP officials say it has delivered limited benefits.

The MHP gained a lot from this alliance, more than us, a senior official at the AKP headquarters in Ankara told Reuters.

Another AKP official said the MHPs 71-year-old leader Devlet Bahceli, once a staunch critic of Erdogan, was an unpredictable ally.

The AKP relies on the MHP for its parliamentary majority, meaning any break in the pact would leave it looking for new partners - a significant challenge after Erdogans blistering criticism of his opponents during the campaign.

But that has not stopped talk of a split. The senior official said that if Turkeys electoral board rules against a re-run of the Istanbul vote requested by the AKP, there was little incentive to maintain the alliance.

Depending on the decision, the fate of the alliance will be determined. It is not possible to say where the alliance will go in the short-term, but the fracture has become noticeable now, he said.

An MHP official said that while differences with the AKP were emerging in public, the nationalists would not be the side to end what the parties have called their Peoples Alliance.

Bahceli said he remained committed to the pact. This is our basic choice, our national and strategic goal, he said in a statement on Wednesday. There is undoubtedly no need to search for other alliances.

The stunning setbacks for the AKP in Ankara and Istanbul prompted sharp public criticism last week from a politician once at the heart of Erdogans administration.

Former AKP prime minister Ahmet Davutoglu condemned his partys alliance with the nationalists, saying it was damaging both in terms of voter levels and the partys identity.

Davutoglu, who served as premier between 2014 and 2016, also slammed the AKPs economic policies, media restrictions and the damage he said it had done to the separation of powers and Turkeys institutions.

Since the election, Erdogan has appeared to downplay the significance of the MHP, pointing to its 7 percent share of the vote. Bahceli said the remarks were unfair and unjust, given that his party had chosen not to stand in Turkeys three largest cities.

After CHP leader Kemal Kilicdaroglu was physically attacked at a soldiers funeral last month, Erdogan struck a more conciliatory tone with a call for unity.

On matters that concern the survival of our country, we must move all together with 82 million as the TURKEY ALLIANCE, putting aside our political differences, he tweeted.

Analysts say his reference to national unity may be largely rhetorical, and the opposition says it rings hollow after he repeatedly accused the CHP and its Iyi (Good) Party allies during the election campaign of supporting terrorism.

Some people within the AKP are doing self-critism. This bothers Erdogan. How could a person who cant even tolerate self-criticism within his own party preach democracy? CHP Deputy Chairman Muharrem Erkek said. His own words show he is not sincere in the Turkey Alliance rhetoric.

Writing by Tuvan Gumrukcu and Ece Toksabay; Additional reporting by Ali Kucukgocmen; Editing by Dominic Evans and Gareth Jones

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Istanbul election results divide Erdogan and nationalist ...

ISTANBUL A last-ditch effort by President Recep Tayyip Erdogans governing party to annul the election for mayor of Istanbul has opened wide divisions in the partys rank and file and with its nationalist allies, as even the president has come under unusual attack.

These tensions, including an ugly physical assault on an opposition lawmaker, have underscored just how severe a blow the loss of Istanbul, still to be officially confirmed, has inflicted on Mr. Erdogans once seemingly solid power structure.

For the first time in 25 years, since Mr. Erdogan first won power as mayor of Istanbul in 1994, his Justice and Development Party, or A.K.P., has lost control of his home city and power base, along with four other major cities, including the capital, Ankara.

The party has mounted an extraordinary appeal to have the Istanbul election canceled and a new election held. Yet it remains deeply divided about the best way forward.

Supporters and opponents of the party are warning that an annulment with a new election has steep risks in itself and may in fact only compound the political fallout for the president.

The three-week-long dispute over the election results has brought no reprieve to Turkeys economic woes, and politicians and analysts on all sides predict that a do-over of the election would risk social chaos.

Opposition supporters, whose candidate, Ekrem Imamoglu, has already taken up office as Istanbuls mayor, are still camping out at election counting centers and are expected to protest any redo.

A second election would raise the prospect of further repression and legal wrangles, and a prolonged struggle could spark another crash of confidence in Turkeys economy.

The Turkish lira, which lost 30 percent of its value last year, dipped again toward record lows this week, recording 5.9 to the dollar on Thursday. Unemployment has risen to nearly 14 percent, and the government depleted its reserves propping up the currency in the run up to the March 31 election.

Mr. Erdogan has already come under attack from within his own party, revealing the animosities beneath his increasingly authoritarian presidential rule.

Ahmet Davutoglu, a former foreign minister, in a rare public statement posted on his Facebook page, criticized the governments handling of the economy, as well as the new presidential system that has given Mr. Erdogan enhanced powers.

But he saved his most scathing criticism for the presidents inner circle, which, he said, sees itself above the committees of our party and aims to rule the party like a parallel structure.

Our country cannot be left to the concerns for the future of a narrow and self-seeking group who are slaves to their ambitions, he wrote.

That group is believed to have pushed hardest to redo the election in Istanbul, which has been a source of power, prestige and great wealth for the president, his family and the ruling clique.

The group is led by Mr. Erdogans son-in-law Berat Albayrak, 41, who was promoted to minister of finance and treasury last year. The interior minister, Suleyman Soylu, 49, has also emerged as an aggressive player.

Mr. Davutoglu, a charismatic ideologue who was sidelined after Mr. Erdogan dropped him from his cabinet in 2016, also criticized Mr. Erdogans alliance with the Nationalist Movement Party.

The party provided a critical alliance for Mr. Erdogan in last years presidential and parliamentary elections and in last months local elections.

But since the Istanbul election, its leader, Devlet Bahceli, has stoked emotions further with a speech criticizing the opposition leader and urging the High Election Council to order a rerun as a matter of national survival.

The tensions peaked last weekend when a mob assaulted Kemal Kilicdaroglu, the leader of the opposition Republican Peoples Party, at a funeral for Turkish soldiers.

Mr. Kilicdaroglu was punched and pushed by a crowd after the prayer ceremony in an attack that has shocked many Turks because of the ugly nationalism on display.

The opposition leader, a member of the Allevi minority, was in danger of being lynched, according to his party, corralled in a house as members of the crowd called to burn it down. He had to be evacuated by security forces in an armored vehicle.

The man who punched Mr. Kilicdaroglu was found to be a member of Mr. Erdogans party, which has promised disciplinary action.

Mr. Kilicdaroglu has alleged the attack was planned beforehand and said the aim was to make his party back out of the alliance that brought his party apparent success in the election in Istanbul.

That alliance included a tacit understanding with the pro-Kurdish Peoples Democratic Party, which Mr. Erdogan has often accused of being linked to a designated terrorist group.

The attack against me is an attack against our unity, Mr. Kilicdaroglu said at a rally after the attack. They think, If we attack, will he give up? Whatever you do, I will not give up.

An investigation by his party has found that batons were handed out by one man from a rooftop, that piles of stones and barrels had been placed to block his exit from the funeral, and that the police had evacuated him as they learned of the mob calling in reinforcements from other villages, the opposition newspaper Cumhuriyet reported Thursday.

Ali Sirmen, a columnist with the same newspaper, blamed Mr. Erdogan for stoking the tension by relentlessly accusing the opposition of siding with terrorists during the election campaign.

Those who sow the wind have begun to reap the whirlwind, Mr. Sirmen wrote. Instead of debating who was at fault, now is the time to talk about what needs to be done to prevent a civil war.

Mr. Erdogan and Mr. Soylu, the interior minister, have both said the attack stemmed from the high emotions running at the funeral.

But analysts close to the government said the attack reflected a battle within the ruling alliance, between those who want to maintain tension in order to force a rerun of the election, and senior heads in the party who wanted to calm things down.

Naci Bostanc, leader of the A.K.P. parliamentary group, deplored the attack on Mr. Kilidaroglu as never acceptable in a speech at the parliaments opening session on April 23. Turkey needs to overcome every kind of tension with the line of reason and responsibility, he said.

Those who were stoking the tension were trying to sabotage an idea floated by Mr. Erdogan for a Turkey alliance to unite Turks after a bruising election campaign, wrote Muharrem Sarikaya, a columnist for the news channel Haberturk on Thursday.

A group inside the AK Party is uncomfortable that the masses have been filled with negative energy, he wrote. They are not content that the tension is being carried to such a high level.

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Erdogans Party Is Deeply Divided by Push to Redo Istanbul ...

It's "a source of pressure on the currency as it raises the risk that the government continues to be distracted by the elections" at a time when Ankara should be providing "more details around the fiscal program, plans to boost net (foreign exchange) reserves, transparency around the recap of the banking sector and inflation numbers needed to stabilize sentiment around Turkey," she told CNBC on Wednesday.

Erdogan has espoused keeping interest rates down despite rising inflation, currently at more than 19 percent. Investors fear he will continue to pursue populist monetary policy after his party's unprecedented defeat in the local elections.

But more than the election results themselves, it is the substance of an economic reform package that is needed to calm markets, experts say. That effort has so far not gone well.

Of note, an investor discussion with Turkish Finance Minister Berat Albayrak during the IMF Spring Meetings in Washington DC last week received decidedly negative reviews.

Investors described Turkish officials as unprepared and lacking details, and a J.P. Morgan survey carried out during the event revealed that more than 80% of investors did not have confidence in Ankara's ability to turn things around.

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Turkey's economy is spiraling as Erdogan's AKP requests ...

ISTANBUL The party of President Recep Tayyip Erdogan of Turkey applied to the countrys election commission on Tuesday for a rerun of the Istanbul mayors race, after two weeks of appeals and recounting of ballots still showed the opposition candidate ahead.

The application for a rerun is seen as a last-ditch attempt by the governing party to avoid losing control of Istanbul, Turkeys largest city and financial center. A defeat in Istanbul would deal a significant blow to Mr. Erdogan, who has been in power for 18 years. Party officials on Tuesday delivered three cases of documents in support of their application.

The 15 million residents of Istanbul have been awaiting a result in the closely run mayoral race between a former prime minister and close ally of Mr. Erdogan, Binali Yildirim, and the opposition Republican Peoples Partys candidate, Ekrem Imamoglu.

Mr. Imamoglu remained in the lead by about 13,000 votes with the recounting and inspection of invalid ballots down to a final district in the opposition-held suburb of Maltepe, in eastern Istanbul. The count in Maltepe is expected to be completed on Tuesday or Wednesday, and barring any further developments, Mr. Imamoglu looked likely to be confirmed as the new mayor.

But the appeal by Mr. Erdogans party, Justice and Development, may forestall that. After submitting the application for a do over, Ali Ihsan Yavuz, the partys deputy leader, told reporters outside the headquarters of the High Election Council in the capital, Ankara, that 85 percent of the mistakes detected in the voting were against his party. He added that the irregularities included 16,000 votes for Justice and Development having been erroneously recorded for other parties.

There is complete organized irregularity and complete election corruption, he said. It shows us the will of the nation was snatched away.

Officials from Mr. Erdogans party, Justice and Development, have been saying for several days that as a final resort they would lodge an extraordinary application for a rerun of the race because of what they called numerous and grave irregularities. A decision from the election council could come within days, and a new vote would be held on June 2 if the governing partys application were accepted, officials have said.

Eleven judges sit on the board of the High Election Council, elected by judges of the Supreme Court and the State Council. The judiciary in Turkey has come under increasing government control in recent years as hundreds of judges, prosecutors and lawyers have been imprisoned or purged from their jobs since a failed coup.

At a news briefing on Monday, Mr. Yildirim said he would support a rerun. He compared the vote to rotten meat and said there existed serious irregularities, serious corruption, and serious findings that mar the election.

His opponent, Mr. Imamoglu, said at a news briefing of his own that there were no grounds to support the application for a fresh vote. To declare the election void was to disrespect the law, he said, adding, The invalid ballots are counted, and it is over.

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Thwarted in Istanbul Election Recount, Erdogans Party ...

Ankara (AFP) - President Recep Tayyip Erdogan on Friday accused the US and Europe of "meddling" in Turkey's affairs after statements from Western allies following his ruling party's challenge to local election results.

Erdogan and his AKP suffered an upset in Sunday's ballot when results showed the party lost the capital Ankara and was narrowly defeated in Istanbul, the country's largest city and economic hub.

While the United States has called on Turkey to accept the results, the European Union urged Ankara to allow elected officials to "exercise their mandate freely".

But Erdogan rejected the remarks and told the US and Europe to "know your place".

"America and Europe are... meddling in Turkey's internal affairs," Erdogan said in his first direct remarks to journalists since Monday.

"Turkey gave a democracy lesson to the whole world," he added.

US State Department spokesman Robert Palladino said "free and fair elections are essential for any democracy, and this means acceptance of legitimate election results are essential" during a briefing on Tuesday.

EU spokeswoman Maja Kocijancic on Monday said Brussels expected elected local representatives to be able "to exercise their mandate freely and in line with the principles of the Council of Europe (rights group) to which Turkey is of course party."

Andrew Dawson, head of a delegation from the Council of Europe in Turkey to observe the vote, said on Monday his team was "not fully convinced that Turkey currently has the free and fair electoral environment which is necessary for genuinely democratic elections in line with European values and principles."

- 'Over by weekend' -

The two rival Istanbul candidates both declared victory soon after the vote when initial results showed them in a dead heat. The AKP appealed after electoral authorities later said the opposition's Ekrem Imamoglu had taken a very slim lead.

The Turkish head of state hit out at American and European criticism over his party's push for appeals.

"In your own countries, you have launched appeals."

Erdogan fought hard before the vote, holding rallies across Turkey where he described the election of mayors and district councils as a battle for the nation's survival.

But voters, concerned with the rising cost of living, double-digit inflation and unemployment, opted for the opposition in the country's two biggest cities.

CHP opposition candidate Imamoglu told Fox Haber broadcaster earlier the difference between himself and the AKP's candidate, Binali Yildirim, was now 18,742 votes.

He said nearly 120,000 previously annulled votes had been recounted in 17 Istanbul districts, with 2,184 extra votes being allowed for Yildirim, and 785 for himself.

Imamoglu estimated the final difference could finish between 18,000 to 20,000 once counting ended, probably by Sunday. Nearly 200,000 more votes still need to be recounted, he said.

"It should be over by the end of the weekend," he told the station.

The AKP has said the recount will show its candidate won.

The Pro-Kurdish Peoples' Democratic Party (HDP), meanwhile, said none of its appeals for recounts had been accepted by election boards, even when candidates had won by only a few votes.

The HDP supported the CHP -- to protest the government's "harsh policies" in Kurdish-majority cities -- by not fielding its own candidates and splitting the anti-Erdogan vote in western Turkey.

It said it had challenged the rulings and would "appeal to the Supreme Elections Board if provincial boards, too, reject our appeals".

- Ankara recount -

Election authorities are providing ongoing recount details to observers from both parties to ensure transparency. Political parties have until April 10 to challenge the results.

A defeat in Istanbul would be especially sensitive for Erdogan who made his political career as mayor of the city. The AKP or its predecessors had held both cities since 1994.

Opposition candidate Mansur Yavas of the CHP beat the AKP's Mehmet Ozhaseki in Ankara, according to preliminary results.

AKP officials have said they believe there was a huge discrepancy in both cities between ballots cast at polling stations and the actual data sent to election authorities.

Erdogan on Friday said his party won 24 out of 39 districts of Istanbul, but said: "The final decision will be taken by the Supreme Election Board."

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Erdogan accuses US, Europe of 'meddling' after Turkey vote