Erdogan says to start work on new constitution

Turkey's ruling AK Party on Monday celebrated victory in a referendum on constitutional reform likely to boost its chances of winning a third term in power at an election due within 10 months.

No sooner had Prime Minister Tayyip Erdogan declared victory in Sunday's plebiscite than he stoked Turkish secularists' worst fears by serving notice that the AK, whose roots lie in political Islam, would start work on a new constitution.

The outcome boosted financial markets, sending shares to a record high, and the finance minister said it provided an opportunity to deepen Turkey's reform program.

The High Election Board was expected to announce the official results on Monday. But television news channels have reported the government scored a "yes" vote of 58 percent versus 42 percent for the "no" camp. The turnout, among an electorate of just under 50 million, was put at 77 percent.

"'Yes', but it is not enough," said a headline in the liberal Radikal daily, saying the result showed enthusiasm for change and the desire for a totally new constitution.

Turks voted on the 30th anniversary of the 1980 military coup, and Erdogan had whipped up public support to change a charter written during army rule by reviving memories of the brutal repression that followed the generals' takeover.

"Turkey cleans away the shame of the coup," said a headline in the pro-government Sabah daily.

Hidden Islamist agenda

Opponents fear an emboldened AK Party will unleash a hidden Islamist agenda if it wins another term in an election due by next July, though Erdogan denies any plan to roll back modern Turkey's official secularism.

Many reforms approved in Sunday's poll were uncontroversial, but changes to the way senior judges are selected have raised concern that the judiciary will lose its independence.

Critics believe the AK government will push through legislation without fear of the Constitutional Court blocking its way, as it did in 2008 when it struck down moves to lift a ban on women in headscarves attending university.

Coming from Islamist parties that were banned in the late 1990s, AK Party leaders liken their movement to Europe's conservative Christian Democrat parties.

Erdogan's government has won over many Turks by spearheading a drive to join the European Union and overseeing reforms and a period of unprecedented economic growth that have transformed Turkey from a financial basket case to a star emerging market.

Finance Minister Mehmet Simsek told Reuters approval of the reforms reinforced macroeconomic and political stability.

"This will boost confidence in Turkey. This will provide an opportunity to broaden and deepen our reform program."

Turkish shares rose 2 percent, benchmark bond yields dipped below eight percent and the lira currency firmed to 1.49 against the dollar as investors welcomed the outcome.

This will boost confidence in Turkey. This will provide an opportunity to broaden and deepen our reform program

Turkish Finance Minister Mehmet Simsek

'Yes' vote

A deep recession last year reduced AK's election hopes, but a robust recovery has restored voters' faith judging by the outcome of Sunday's plebiscite.

"The comfortable margin of the 'yes' vote is market positive as it indicates that the AKP has good prospects of winning a third tern at the general elections due by July 2011," Wolfango Piccoli, a London-based analyst at Eurasia Group consultancy, said in a note.

The secularist opposition's poor showing was crowned by a mix-up that prevented Kemal Kilicdaroglu, chairman of the Republican People's Party (CHP), from voting.

A CHP statement said its party leader had been unaware of changes to regulations limiting where members of parliament could vote. The CHP has pinned hopes on Kilicdaroglu to galvanize the party of Turkey's founder, Mustafa Kamal Ataturk, before next year's vote.

Many people now expect the fault line between AK supporters and secularists to deepen, as a spirit of compromise remains in short supply in Turkey's democracy.

"Politics will polarize and harden further," said Faruk Logoglu, a former ambassador to the United States.

"The ruling party will become even less receptive to the opposition, and the opposition will use tougher words and approaches to undermine the government," he said.

Among other measures in the reform package were steps to make the military more answerable to civilian courts and remove immunity from prosecution for the leaders of the 1980 coup.

The comfortable margin of the 'yes' vote is market positive as it indicates that the AKP has good prospects of winning a third tern at the general elections due by July 2011

Wolfango Piccoli, Eurasia Group Consultancy