Turkish Islamists maneuver before election

By Ralph Boulton

ANKARA (Reuters): Turkey's chief Islamist opposition is pressing the government for constitutional changes to avert a party ban, but would probably stop short of moves that could destabilize the reforming administration.

The Virtue Party has said if Ankara does not meet its demands it will oppose coalition plans to amend the constitution to allow President Suleyman Demirel to serve a second term.

The smooth election of a president in May is seen in markets as important to avoid inter-party disputes that could destabilize the government coalition and threaten IMF-backed reforms vital to the economy. The issue must be resolved by April 16 when the election process must begin in parliament.

An inter-party commission formed to forge a deal between the government and Virtue, facing possible closure on accusations of undermining the secularist order, failed to agree on Monday.

ABN Amro's Zeynep Korozay said she believed an agreement would be reached next week, during a national holiday. "As long as there is a coalition government there will be this background noise, but we are generally very positive.

"We strongly believe the stability of the coalition will not be threatened by the presidential election issue, as the party that breaks the coalition is likely to be punished by voters," ABN Amro chief economist Ceyla Pazarbasioglu said .

Animosities between opposition parties also helped the coalition government.

"This coalition is likely to survive until general elections scheduled for 2003," Pazarbasioglu said.

Turkish political crises have a record of dissipating as quickly as they flare, driven partly by dramatic newspaper headlines. Disputes over international arbitration and social security have followed a similar pattern of bargaining.

On Tuesday, the "Demirel" issue was markedly absent from frontpage headlines and market sentiment, though not helped by the uncertainty, remained steady.

"I think Virtue has no choice but to vote for the proposal as it now stands," Ismet Berkan, a columnist with Radikal newspaper, said.

"They cannot get any more out of the government and they know it. If they don't take the offer the risk of closure could be increased."

The left-right government of Bulent Ecevit controls 351 seats in the 550-seat parliament and would require a two-thirds majority -- 367 votes -- to pass the presidential amendments.

The government has offered a package combining the "presidential amendments", allowing a president to serve a second, five-year term, with amendments to article 69 of the constitution that would make it more difficult to ban Virtue, or other parties, for unconstitutional activity.

For Virtue, some say, the danger would persist that it could be banned as a simple successor to the banned Islamist Welfare Party. Welfare was banned in 1998, months after the government it led was edged from power under military pressure.

The banning of Virtue, which won 15 percent of the vote in April polls, could cause serious problems for Turkey. The Constitutional Court could accompany a ban order by a decree expelling Virtue deputies from parliament.

Subsequent by-elections could upset the balance in parliament and imperil Ecevit's coalition with the right-wing Nationalist Action Party.

Ecevit, speaking after a government meeting on Monday night, said he was optimistic. "We will secure the continuation of constitutional changes we have already announced," he said.

Berkan said uncertainty could persist up until a vote. "They will press for more. They will give a very hard fight in parliament, but in the end they will give their votes."