Turkey's Constitutional Court banned the chief opposition party today but stopped short of large-scale expulsions from parliament that would have triggered by-elections and thrown IMF-backed financial reforms into doubt.
The court ruled there were grounds to ban the Virtue Party which controlled 102 out of 550 seats as a focus of Islamic and anti-secular activities. It expelled two members from parliament and imposed political bans on five more. If the 11 judges had expelled 20 or more deputies from parliament this would have taken the number of vacant seats above a 5 per cent threshold and triggered by-elections.
Markets, long jittery over the impending decision, fear elections could undermine Prime Minister Mr Bulent Ecevit's frail three-party coalition and hamper financial reforms demanded by the International Monetary Fund (IMF) in return for $15.7 billion in crisis loans.
Though the cloud of by-elections has been lifted, uncertainty will continue over the allegiance of Virtue deputies.
Many could join new parties expected to emerge from the ruins of Virtue but others could try to defect to Mr Ecevit's nationalist coalition partners, exacerbating tensions in the alliance.