Four Turkish opposition parties have agreed to unite in a broad formal alliance to fight President Recep Tayyip Erdogan’s ruling Justice and Development Party (AKP) in what will be the most pivotal elections in modern history for Turkey, various media outlets in the country reported on May 2.

The main opposition Republican People’s Party (CHP), the fledgling Iyi (Good) Party, the Islamist Saadet (Felicity) Party and the Democrat Party are reportedly set to on May 3 announce their alliance to contest the snap parliamentary elections on June 24. The momentum generated in campaigning by the deal will be expected to help Iyi Party leader Meral Aksener in her bid to defeat Erdogan in the parallel presidential contest. Polls have shown that she stands a big chance of at least pushing the incumbent into a run-off. Iyi is only able to run in the parliamentary contest because the CHP enabled it to qualify for participation by allowing 15 of its MPs to switch over to the new party.

Warnings of one-man rule
The opposition alliance will set out to step up warnings to the electorate that votes for the AKP and Erdogan could leave Turkey facing one-man rule for generations to come. The elections will bring to an end almost a century of parliamentary rule in the country and usher in a presidential republic led by a nearly all-powerful executive president. Critics say that if Erdogan wins it will be as if he has undergone a “coronation” after 16 years at the top of Turkish politics. Under the constitutional changes, there will be no prime minister and parliament will play a curtailed role in Turkey’s affairs.

The growing electoral threat to the chances of the AKP and Erdogan, who have dominated Turkish politics partly thanks to the until now fractured state of the opposition, is being felt in the financial markets. The Istanbul stock market is struggling and the Turkish lira (TRY) was on May 2 under renewed heavy pressure—although the losses of the currency seen on the day were much attributed to the announcement from S&P Global Ratings that it has cut Turkey’s credit rating further into junk because its overheating economy is exposed to a hard landing.

The AKP has established its own formal alliance with the Nationalist Movement Party (MHP) for the parliamentary election. The MHP has in the past year been struggling in the polls, but new legislation means that it will no longer have to win 10% of the vote in order to be awarded seats in parliament. When the changed law was passed there was a brawl in parliament as opposition MPs cried foul, but ironically the smaller parties in the fresh opposition alliance may now benefit from the move themselves.

Broadcaster NTV said the opposition alliance deal will be signed at 3pm local time on May 3. A May 6 deadline was set for election alliances to be filed with the High Election Board.

Populist and outspoken Erdogan, widely appraised as a brilliant and charismatic orator, has won nearly a dozen elections since his Islamist-rooted AKP first came to power in 2002. The party in April last year officially narrowly won a referendum backing the switch to an executive presidency, although the result was contested by the CHP which said it was corrupted by the counting of unstamped ballots.

Previously no fan of snap elections
Analysts have previously observed that Erdogan, who likes to project strength at every opportunity, is not a fan of snap elections as he views them as a sign of weakness. In making the surprise announcement that the elections would be brought forward from November 2019, he cited "developments of historical importance in our region as well as the cross-border operation [against Kurdish militias] we’re carrying out in Syria". However, critics were quick to accuse him of rushing to the polls out of fear that voters will soon realise Turkey’s economy is coming off the rails, a theory backed up by the S&P downgrade put out late on May 1. The AKP responds that a new mandate would give it and Erdogan the political stability to deal with Turkey’s substantial political and economic challenges.

Since Turkey came under a state of emergency in July 2016 after the failed coup, Erdogan has had the power to rule by decree. Tens of thousands of people have been jailed and further tens of thousands have been dismissed from their state jobs in purges—including throughout the armed forces—that have taken aim at anybody with an alleged association to the Gulenist network Erdogan and the government hold responsible for the attempted putsch. The UN human rights office, calling for an end to the prolonged emergency regime, says it has had a “chilling effect” on Turkish society by demonstrating that any dissent will be punished.

Under the executive presidency, the president will be made head of the executive branch with the power to issue decrees with the force of law, prepare the budget, dissolve parliament and appoint high-level officials, including ministers and some top judges. Martial law will be abolished, but the president will be able to declare a similar state of emergency, with powers provided to the authorities to restrict basic rights and freedoms.

Pulling out all the stops
Erdogan remains the clear favourite to win in a presidential election run-off and he and the government will be pulling out all the stops in the weeks before polling day. On May 1, it was announced that 12 million Turkish retirees will be receiving cheques from the government just prior to the elections.

The opposition’s best hope might be that global economic conditions might exacerbate Turkey’s economic difficulties at a pace which the government cannot control. Turkey is badly exposed to higher global interest rates and the severe depreciation of the TRY may mean that big Turkish companies with major foreign currency borrowings may struggle to pay their debts, leaving Turkish banks facing cumbersome levels of problem loans.

At 18:25 local time, the TRY stood at 4.1725 to the dollar, having started the day at 4.1061. The currency’s all-time low of 4.1944 was recorded on April 11. The depreciation has continued despite last week’s interest rate hike of 75 basis points introduced by the central bank.