March 31 - After doing well in local elections Turkey's Prime Minister vows to make his enemies pay. The turmoil has unnerved investors in recent weeks but as Sonia Legg reports the prospect of political continuity sent the lira to a two-month high.
Fighting talk from a victorious leader. (SOUNDBITE) (Turkish) TURKISH PRIME MINISTER, TAYYIP ERDOGAN, SAYING: "We will enter their lair. They will pay for this. They will pay the price." "They" are those who have accused Turkey's Prime Minister of corruption and leaking state secrets. And Tayyip Erdogan's call for retribution follows his victory in local polls. He effectively made the election a referendum on his rule. And with most of the votes counted his AKP party had secured close to 46% support. That says Serkan Demirtas from the Hurriyet Daily News will give him powerful ammunition. (SOUNDBITE) (English) HURRIYET DAILY NEWS ANKARA REPRESENTATIVE, SERKAN DEMIRTAS, SAYING: "Erdogan will not reconcile. Erdogan will continue to fight against his opponents in political circles and he will try to consolidate his 50 percent of votes until presidential elections." The election campaign was dominated by a power struggle between Erdogan and a moderate U.S.-based cleric, Fethullah Gulen. He accused Gulen of using followers in the police and judiciary to fabricate accusations against him. Many lost their jobs as a result. The turbulence unsettled investors. Stocks fell almost 9% and in January the lira hit record lows. It recovered after the vote to reach a two month high. But Christian Schulz from Berenberg Bank says Turkey's economic prospects remain damaged. SOUNDBITE: Christian Schulz, Senior Economist, Berenberg Bank, saying (English): "We've seen all these protests in the past and I don't think they will fade just because of an election win for Erdogan so I don't think investors will be particularly reassured - in fact investors would prefer a fresh start - a unifying party that would impose some reforms and so on. I think Erdogan's relatively divisive policies and stands are likely to sow further tensions and that's not good for markets." It's thought the strong showing could encourage Erdogan to run for a fourth term as Prime Minister - or seek the Presidency and change the largely ceremonial role into a more powerful one. Either would involve risks. Erdogan has been the subject of anonymous postings on the internet implicating him in corruption. He's responded by blocking access to Twitter and YouTube - to the annoyance of western governments. Any bid to extend his 12 year rule could well encourage more opposition vitriol and international criticism.