Turkish govt mandate to return to Erdogan

Erdogan could dissolve Davutoglu's caretaker cabinet and call for the formation of an interim 'election government' if no deal is reached

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Turkish Prime Minister Ahmet Davutoglu was set to formally give up trying to form the next government on Tuesday after weeks of talks with opposition parties failed to produce a coalition, a senior ruling party official said.

Davutoglu had been trying to find a junior coalition partner since his AK Party lost its parliamentary majority in an election in June, leaving it unable to govern alone for the first time since it came to power in 2002.

The NATO member has not seen this level of political uncertainty since the fragile coalition governments of the 1990s: turmoil it could do without as it takes on a front-line role in the U.S.-led campaign against Islamic State insurgents in Syria and battles Kurdish militants at home.

Davutoglu met the leader of the right-wing opposition Nationalist Movement Party (MHP) on Monday in a last-ditch effort to agree a working government, but the nationalist leader refused all the options he presented.

"After yesterday's talks, no coalition option remains for the party. Davutoglu will therefore return the mandate to the president this evening," the official told Reuters, asking not to be named because of the sensitivity of the situation.

Davutoglu was due to meet President Tayyip Erdogan later on Tuesday.

Erdogan could theoretically now hand the mandate to form the next government to the Republican People's Party (CHP), Turkey's second biggest party, although it is also highly unlikely to be able to agree a working coalition before the Aug. 23 deadline.

Under the terms of the constitution, if no government is formed by Aug. 23, Erdogan must dissolve Davutoglu's caretaker cabinet and call on an interim power-sharing government to lead Turkey to a new election in the autumn.

Such a temporary arrangement would theoretically hand cabinet positions to four parties with deep ideological divisions, leaving policy-making paralyzed and deepening the instability that has sent the lira currency to a series of record lows.

But even forming such an interim cabinet is likely to be difficult.

The CHP on Tuesday became the second party to indicate it would not take part, joining the pro-Kurdish Peoples' Democratic Party (HDP) in a planned boycott.

"If HDP doesn't offer members to that election government, we will ... not offer members either," CHP deputy group chairman Engin Altay told Reuters.

The AKP's coalition talks with the main opposition CHP broke down last week, while the HDP has all along ruled out any coalition with the ruling party.

Senior AKP officials had been betting that the nationalists, virulently opposed to greater Kurdish political power, would do anything possible to avoid a scenario in which the HDP held cabinet seats, even temporarily.

But nationalist leader Devlet Bahceli appears to be calculating that the prospect of Kurdish politicians in ministerial positions will so enrage those on Turkey's political right that they will flock to support his party at the next election.

Parliament could in theory also vote to allow the current cabinet to continue working until a new election, but the MHP has already said it would vote against such a move and other opposition parties have little incentive to do any different.