By Diego Del Priore
The last parliamentary elections in Turkey mark a political and an institutional turning point in the country's history. The importance of the vote derives from two main factors.
Firstly, Prime Minister Ahmet Davutoglu's Party of Justice and Development (AKP) has lost its parliamentary majority, although it remains the largest party in the Parliament with 258 seats and 40.9% of the votes. This is the first time that the party has been in this position since 2002, when the AKP swept to power and retained a majority in the Turkish Parliament. However, the AKP failed to achieve its objective of 350 seats, as the party leader and president of the Republic since August 2014, Recep Tayyp Erdogan, had hoped.
This 350 seats threshold would have allowed Erdogan to introduce a series of constitutional reforms leading to a reinforcement of the presidential system. However, Turkish voters would appear to have baulked at this prospect and have opted to maintain the existing balance of institutional power. The elections were an indirect referendum on Erdogan's constitutional intentions.
Indeed, the electoral campaign went ahead amidst a degree of tension given the issues at stake. Galip Dalay, a senior fellow with the Al Jazeera Center for Studies on Turkey and Kurdish affairs, points out that the main factor contributing to the heated atmosphere remained, above all, the future of the political system: "The whole struggle involves the central question of whether Turkey should have a parliamentary or a presidential system. Unfortunately, all other items on the agenda have taken a back seat with regard to this central electoral question".
Secondly, the entry of the left-wing pro-Kurdish party, the People's Democratic Party (HDP), into the Grand National Assembly represents a development of marked significance. The HDP, led by Selahattin Demirtas, received 6.5 millions of votes (13%) and 80 seats in the Parliament. This political shift opens the door of Parliament to an overtly Kurdish party for the first time in Turkish history and constitutes a strengthening of Kurdish political influence.
As for the other major electoral figures, the Republican People's Party (CHP), gained 132 seats with 25% of votes and has worsened its 2011 result. By contrast, the Nationalist Movement Party (MHP) increased its share of the popular vote to 16.5% and 80 MPs. Institutionally, the new political landscape inevitably entails a period of instability and the country will undoubtedly be confronted with one of three options: a coalition government, a minority government or early elections.
With regard to the Kurdish question, the emergence of the HDP might provide a stimulus for renewed dialogue. In its electoral manifesto, among other measures, the party had pledged to back up self-rule with the introduction of regional assemblies. Since the 1920 Treaty of Sèvres – calling for autonomy for the Kurdish people; a call that remained unheeded –the Kurdish question remains unresolved. After decades of failed attempts at greater self-government, the official opening of negotiations with regard to Turkey's accession to the European Union represented a shift in perspective and, with it, the potential for greater recognition of Kurdish cultural identity.
The latest elections might possibly induce greater momentum towards a definitive settlement as this involves the continued pursuit of peace talks with the outlawed armed Kurdistan Workers' Party (PKK). Only hours after the official announcement of the election results, Selahattin Demirtas, HDP leader and human rights lawyer, declared: “We, as the oppressed people of Turkey, who want justice, peace and freedom, have achieved a tremendous victory today. It’s the victory of workers, the unemployed, the villagers, the farmers. It is the victory of the left”.
The possibility of further progress over the Kurdish question is also, it would appear, intimately linked to a series of regional developments, with the Kurds being directly involved in the armed struggle with the Islamic State (IS). Kurdish resistance – alongside contacts with the United States with a view to combating IS – have contributed directly to the growing legitimacy and visibility of the Kurds, a factor that has not yet been recognized by the Turkish government.
At the same time, the fundamental question of Turkey's economic future continues to attract a great deal of attention. The main focus has been the question of how best to reboot the economy, on one hand, and the relations between the government and the central bank, on the other hand.
After a period of sustained growth, Turkey has emerged as something of a model in terms of economic policies and development strategies. In a recent report, The World Bank stated: "Turkey’s economic success has become a source of inspiration for a number of developing countries, particularly, but not only, in the Muslim world. The rise of Turkey’s economy is admired, all the more so because it seems to go hand in hand with democratic political institutions and an expanding voice for the poor and lower middle classes".
This being said, closer examination of the figures points to a less rosy picture. Economic growth has been slowing since 2008 and it is predicted that it will fall to 2 percent this year. Unemployment is at its highest level in five years and, with growth stagnating, the economy will undoubtedly remain something of a thorn in the side of the new government. Nevertheless Abbas Ameli-Renani – a strategist specialising in global emerging-markets at Amundi in London – remains relatively upbeat. As he pointed out on the eve of the vote, “if the AKP fails to win a majority and is forced into a coalition with other parties, the markets’ reaction is unlikely to be negative for a sustained period. After 13 years of absolute majorities for the AKP, a weaker vote of confidence by the electorate may be exactly what is needed to refocus the party’s attention on the economic reform agenda that defined its earlier years in power.”
Above all since the election of Erdogan as President of the Republic in 2014, the question of the most appropriate economic strategies to pursue has tended to turn around the relations between the government and the Turkish Central Bank. In principle an independent entity, the central bank has come into conflict with the powers that be over high interest rates. Whilst the central bank is in favour of high interest rates, this policy has drawn some harsh criticism from Erdogan.
Despite the apparent deadlock and stagnation in Turkish affairs, the elections have been greeted with satisfaction by the European Union. Europe is the largest trading partner of Turkey, providing the greatest amount of foreign direct investment to Ankara. Against this background, the European Union has hailed the existing balance of power as "a clear sign of the strength of Turkish democracy. The fact that all the major political parties have obtained representation in the new parliament is particularly important".
Diego Del Priore is Research associate at the Institute of Advanced Studies in Geopolitics and Auxiliary Sciences (IsAG)
First published by www.moderndiplomacy.eu
 Umut Uras, Turkey votes amid debate on presidential system, Al-Jazeera, 7 June 2015.
 Mustafa Kutlay, Turkish economy after the elections: In search of a new paradigm, Turkish Weekly, 30 June 2015.
 Onur Ant, Ali Berat Meric, Erdogan Rivals Frame Economy Debate as Turkey Heads to Polls, Bloomberg, 13 May 2015.
 Joint statement by High Representative/Vice-President Federica Mogherini and Commissioner Johannes Hahn on the General Elections in Turkey, 8 June 2015.