The resulting protest from the opposition Republican People’s party led ultimately to the constitutional court declaring the first round of the election invalid and a new set of requirements that almost guarantee that the AK party will need help from another group to secure victory for its candidate. Meanwhile, the army continued its tradition of pro-secularist intervention in political affairs by indirectly threatening a coup on its website should Gul, whose wife wears a headscarf and who is regarded as a less moderate Islamist, win the election.
The election is scheduled for July 22, and although investors have so far seemed unfazed by the turmoil, all market participants will be monitoring the results closely.
"We have been saying since last year that there could be tension," says Jon Harrison, EEMEA strategist at Dresdner Kleinwort, "and we’re now looking at three likely post-election scenarios. The first possibility, if they’re unable to decide on a president, is deadlock and further uncertainty. The second is that a coalition government compromises on a candidate; and the third, which would be most troubling from the market’s perspective, is that the AK party is successful, in which case we can expect further confrontation between them and the army – who are granted some powers of intervention by the constitution."