Turkish Prime Minister Ahmet Davutoğlu leaves office: the announcement of his resignation comes after an intense tug of war with the president Recep Tayyp Erdogan. The clash is personal and political, because Davutoglu's moderate line represents an obstacle to the hard and centralizing one of the president. The talks between the two on Wednesday evening were anything but conciliatory: an hour and a half of conversation which was followed this morning by the official announcement. "Not by choice, but by necessity", as he declared today, Davutoglu will not run for the leadership of the party to which both leaders refer.
Davutoglu has led the AKP since 2014, the year in which Erdogan was elected president and left the leadership of the Justice and Development Party, which he founded, vacant after 13 years. In August two years ago, the outgoing prime minister was able to count on Erdogan's support and found no contenders on the road to the premiership. But since then, the differences between the two have become incurable, until today's announcement. “I will return to academic life. After consultations with our president and people I trust, I have come to the conclusion that a change in the position of party leader and prime minister is for the best,” Davutoglu told an audience of party officials, in live TV, confirming that he will not run again for leadership of the party on the occasion of the extraordinary congress to be held on 22 May.
The clash also had aftermaths on the market front. Especially the currency one, even if today the Turkish lira recovered to 3,34 against the euro (+1,7%), after however losing 3,9% yesterday. The Istanbul Stock Exchange also fell sharply, losing 3,5% in the morning. “The sharp surge in political risks will only further shine a spotlight on the country's economic weakness,” the analyst commented. Salman Ahmed, Chief Global Strategist at Lombard Odier Investment Managers who expects significant uncertainty until a new prime minister is appointed, although further consolidation of Erdogan's power is likely a structural fear today. Also to be monitored is what the Turkish central bank will do, which could reverse its monetary policy course in light of the renewed weakness of the lira.
