- The Washington Times - Friday, July 12, 2002

ISTANBUL Turkey's foreign minister resigned yesterday, pushing the government one step closer to collapse. The economy minister also sought to quit but was persuaded to stay amid fears of panic in the nation's fragile financial markets.

Ismail Cem, the popular foreign minister, was the seventh Cabinet member to resign this week the biggest blow yet to the government of Prime Minister Bulent Ecevit. Dozens of legislators also have left Mr. Ecevit's party.

Calls are mounting from within the government for new elections, amid deep divisions in the ruling coalition over reforms demanded by the European Union. Mr. Cem is expected to form a new party that will seek to accelerate Turkey's bid for EU membership.

Economy Minister Kemal Dervis, who is expected to join Mr. Cem in the new party, also submitted his resignation yesterday in a move that could have rocked Turkey's financial markets. But Mr. Dervis apparently was dissuaded by President Ahmet Necdet Sezer.

During two hours of uncertainty over Mr. Dervis' position, the lira sank to an all-time low, trading at more than 1.7 million to the dollar. But analysts hoped the currency would strengthen after Mr. Dervis confirmed in a written statement that he had agreed for his resignation "not to be put into effect."

Turkey's economy is still struggling to end a crisis that caused it to shrink 9.4 percent last year, amid mass layoffs. Mr. Dervis has close ties to the International Monetary Fund, which has backed his recovery plan with $31 billion in loans.

Mr. Dervis "decided to review his decision at the request of the president," private NTV television quoted Mr. Ecevit as saying. "I am very happy he will stay."

But reports said Mr. Ecevit had earlier told Mr. Dervis he would have to leave the government if he continued to flirt with the idea of a new party.

Mr. Cem, expected to be the planned party's leader, is to hold a press conference today to explain his resignation and outline his plans.

Deputy Prime Minister Husamettin Ozkan, whose resignation Monday triggered the crisis, reportedly is planning to join the new party. It is expected to appeal to a majority of Turks, who want to see the country join the European Union.

In a sign that the political confusion could harm Turkey-EU ties, EU Commission President Romano Prodi yesterday canceled a visit to the nation scheduled later this month, citing the government crisis.

The European Union says Turkey must pass contentious reforms, including abolition of the death penalty and wider rights for minority Kurds, before it can join the bloc. Divisions between the nation's coalition partners over the EU demands had made an early election likely even before the resignations this week.

Mr. Ecevit, whose illnesses over the past two months have largely paralyzed the government, opposes early elections but has conceded they may be inevitable.

The resignations of seven ministers and 34 lawmakers have reduced his party's seats in parliament by a third and left the nationalists as the biggest party in parliament and government. If Mr. Ecevit's party loses 20 more lawmakers, his government will lose its majority.

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