Next Sunday sees presidential and parliamentary elections in Turkey that have been brought forward. At the same time as the ballot, the still controversial constitutional reform adopted in spring 2017 by referendum comes into force. It strengthens the powers of the president vis-à-vis the Turkish parliament. New elections were not actually scheduled until the end of 2019, but President Erdogan brought them forward to 24 June this year, no doubt not least with the intention of securing his own re-election.
According to current opinion polls it is doubtful whether his plan will succeed. Neither Erdogan nor the election alliance of AKP and the nationalist MHP can at present be sure of gaining an absolute majority of the votes. With a view to the composition of the future parliament, what will above all count is whether the pro-Kurdish HDP manages to poll more than the 10% required for a single party to enter parliament. Should the HDP succeed then it could, together with an alliance of opposition parties (including among others the Republican Peoples Party [CHP] with a social-democratic orientation and the very new national conservative “Good Party” [Ýyi]), garner more votes than the Erdogan faithfuls, so the latest polls suggest.
The President himself could fail to get an absolute majority of the votes cast in the first ballot. While Erdogan’s prospects are far better for a run-off election, Muharrem Ýnce from the CHP as his main opponent will probably do anything to ensure the opposition is firmly behind him for the run-off and as a result the change in mood in the country that Ýnce has been calling for will get an additional boost.
The elections on Sunday are particularly tricky for the Lira. Should President Erdogan and his AKP remain in power, this would probably be “the lesser of two evils” for the currency. While in recent weeks President Erdogan has unsettled investors, this is most probably already largely discounted in the present price of the Lira. Should, by contrast, the opposition gain a majority in parliament or even take the presidency, there will presumably be greater political uncertainty in Turkey, in particular as President Erdogan seems unlikely to simply accept such an election result. The consequence would be increased pressure to sell off Lira.