Turkish court warns ruling party but keeps it open

By Orhan Coskun

ANKARA (Reuters) - Turkey's highest court on Wednesday rejected an attempt to shut down the governing AK Party but imposed financial penalties on it for anti-secular activities, the court's chief judge said.

The verdict ended months of political uncertainty which has hit Turkey's financial markets over fears the democratically elected party would be closed, halting economic and political reforms needed for Turkey to join the European Union.

The AK Party, which has roots in political Islam, has long been at odds with the powerful secularist establishment over the role of religion in the officially secular but predominantly Muslim country.

The court case reflected a polarized country divided between pious Muslims who run the government, their supporters, and secular Turks, backed by the military and judiciary.

The Constitutional Court gave a sharp warning to the AK Party after finding it guilty of anti-secular activities, though not serious enough to merit it being shut down.

"We think that this political party should take the necessary message from this verdict," court chairman and chief judge Hasim Kilic told a news conference.

Kilic said six of the 11 judges voted to close it, four voted to impose fines and only one voted against. At least seven judges had to vote in favor of closure to carry the case.

Prime Minister Tayyip Erdogan, a former Islamist who has boosted Turkey's image abroad and brought about economic and political reforms at home, welcomed the outcome of the case.

Averting closure will not end the standoff, but it has strengthened his hand against his opponents.

"The AK Party, which has never been a focus for anti-secular activities, will continue to stand up for the fundamental values of the Republic," Erdogan told supporters.

Many critics said the court case was a "judicial coup" attempt against an elected party.

A closure could have hurt Turkey's European Union membership chances. In Brussels officials expressed relief at the verdict.

"I encourage Turkey now to resume with full energy its reforms to modernize the country," European Commissioner for Enlargement Olli Rehn said in a statement.

Rehn urged political parties to work together towards reforms based on a broad-based dialogue and called for an alignment of Turkey's rules on parties with European standards.

Financial markets had traded higher on expectations the party would not be banned. The lira was up 2 percent earlier in the day and stocks gained 6 percent. Turkey's benchmark global bond due in 2030 rose sharply after the ruling.