Meanwhile in Turkey during an IMF visit

Turkish PM in row with president, markets shake
By Hidir Goktas

  
ANKARA, Feb 19 (Reuters) - Turkey's prime minister furiously accused his 
president on Monday of trying to undermine the government and demanded a 
public apology for "disrespectful" behaviour at a meeting of political and 
military chiefs. 

A cabinet statement accused President Ahmet Necdet Sezer of going as far as 
to throw a copy of the constitution during a row over the fight against 
corruption at a meeting of the National Security Council (NSC). 

Fears of political instability from the row sent the stock market plunging by 
more than 14 percent at the close, and nervous Turkish banks bought nearly $5 
billion after Prime Minister Bulent Ecevit stormed out within minutes of the 
meeting convening. 

"This is a serious crisis," Ecevit said, clearly shaken. 

Sezer, 58, a former constitutional court judge who took office last May after 
being elected with Ecevit's backing, issued a terse statement which he said 
aimed to set the record straight about "statements that do not reflect the 
truth." 

The clash, which coincided with a visit by three top IMF officials, cast new 
doubts on the stability of the government and IMF-backed financial reform. It 
could scarcely have come at a worse time for a beleaguered economy, with a 
major domestic bond issue set for Tuesday. 

THORNY ISSUE OF CORRUPTION 

"The disrespect that President Sezer showed me today takes the government as 
a target...The president may have complaints about the government or about me 
as prime minister, but this is not the way to voice them," Ecevit said. 

"Nonetheless...we are going to do everything possible to make sure the way is 
not left open for another economic crisis." 

IMF Deputy Managing Director Stanley Fischer and other IMF officials met 
Ecevit and Central Bank Governor Gazi Ercel for around an hour on Monday 
evening but left without any comment. 

The cabinet statement took up the thorny issue of graft. "He (Sezer) was 
trying to give the impression the government isn't up to the task of fighting 
corruption but he himself knows that this government has struggled the 
hardest against corruption." 

Turkey has launched a crackdown on corruption that has resulted so far in the 
charging of several officials in the Energy Ministry. But the problem, 
closely scrutinised by the IMF, is believed to pervade all areas of Turkish 
life. 

Parliament voted last summer not to pursue an investigation of abuse of power 
allegations levelled against deputy Prime Minister Mesut Yilmaz during his 
term as Prime Minister. 

The dramatic row between Ecevit and Sezer took place in the presence of 
powerful military leaders known for their scepticism about Turkey's political 
establishment. 

Worse still, perhaps, it coincided with a visit to Turkey by Fischer, the 
IMF's number two, and its Turkey desk head Carlo Cottarelli. 

The Fund stepped in last December with $7.5 billion in emergency loans to 
rescue an earlier $4 billion financial reform package shaken to the core by a 
liquidity crisis. 

The 75-year-old prime minister appeared to be taking a serious risk in 
confronting Sezer, whose popularity is greater even than that of the powerful 
military. 

But Ecevit and his government appeared to dig in their heels, placing blame 
for the row and its possible consequences squarely on Sezer. 

"What is expected from a president obliged constitutionally to oversee smooth 
functioning of our state apparatus after such a disgraceful affair is an 
apology before the public," the cabinet said. 

Sezer, however, accused one of Ecevit's ministers of acting disrespectfully 
during the meeting. "In the face of this reality for the prime minister to 
hold the president responsible for what happened is, to put it lightly, 
unfair," he said. 

Shares ended down 14.62 percent. Banks said they bought more than $4.8 
billion from the Central Bank, a single-day record. 

Any disagreement over corruption would be sharpened by a personal animosity 
which the two men have not hidden. 

Sezer emerged as Ecevit's candidate for president last May after the prime 
minister failed to persuade parliament to extend the term of veteran 
politician Suleyman Demirel. 

Frictions soon emerged between Ecevit and Sezer, a senior judge with no 
political experience. 

The presidency is largely ceremonial but has powers to limit government 
actions that had scarcely been used by Demirel.