Turkey Names Gul New PM

ANKARA (Reuters)–Abdullah Gul–a strong advocate of Turkish European ambitions and close US ties–was installed as prime minister on Saturday as his party announced sweeping plans for economic and social reform to meet EU standards.

Gul–deputy leader and moderate in a party that has its roots in political Islam–takes office with NATO member Turkey facing critical weeks. Its crisis-plagued economy is poised between recovery and relapse and it is pushing hard to win a date for European Union entry talks at an EU December summit.

"It’s time to start work. From this hour onward it’s time to mobilize and work night and day to solve the problems of our people," a smiling Gul said after President Ahmet Necdet Sezer invited him to form a government.

"The government will be ready by Monday,” he said.

Gul was the favorite of financial markets fearful for the future of a $16 billion IMF crisis pact. To the United States–which may soon look to him for use of air bases in any attack on neighboring Iraq–he is also a familiar face. Secularist Suspicions

The pledges of privatization and energy and tax reform Erdogan outlined looked generally set to please the IMF. Some mark departures from the IMF pact but Erdogan said he was sure agreement could be reached with the fund.

He vowed rapid rights reforms including "immediate" new penalties to deter torture–long an obstacle to EU ambitions.

Some proposals hit at the core of Turkish life. He unveiled plans to reform the education system–a sensitive area where Turkey’s secular establishment will be watching closely for any moves that could water down the country’s secular principles.

Immediately after announcing the plan he flew to the Turkish Cypriot north of the divided island of Cyprus for meetings on a UN plan to reunite the island ahead of the EU summit.

Erdogan welcomed the UN plan as a basis for more talks but said efforts to form a government in Ankara and the illness of Turkish Cypriot leader Rauf Denktash made the timetable tight.

"It is not possible to come to an immediate decision since the plan…came at a time when President Rauf Denktash fell ill and at a time when there was a void in leadership (in Turkey)," Erdogan said.

The new government’s energetic action on the EU–including a six-city tour of the Union next week by Erdogan–contrasts with the often painfully antagonistic approach of the outgoing government. But there may still be strong resistance to giving Turkey a talks date until reforms have been clearly implemented.

BABACAN IN ECONOMY JOB

Turkey’s Justice and Development Party (AKP) took office on Monday after the president approved the cabinet list with little to surprise nervous financial markets and Turkey’s Western allies.

The Justice and Development Party (AKP) won a landslide victory in November 3 polls. The government will have to work fast to win the confidence of financial markets and foreign allies as it works to implement the country’s $16 billion IMF rescue pact and bids to join the European Union.

Prime Minister Abdullah Gul said Ali Babacan–a 35-year-old Western-educated former financial consultant–would be economy minister in a move likely to reassure markets.

Yasar Yakis–a career diplomat who has been accompanying AKP leader Tayyip Erdogan on trips to Rome–Cyprus and Greece in the past week to drum up support for Turkey’s EU bid–will be foreign minister.

Tayyip Erdogan–leader of the AKP–cannot be prime minister or a cabinet minister due to a previous conviction for inciting religious hatred.

The defense minister–whose influence is balanced by that of Turkey’s powerful generals–will be Vecdi Gonul–a former Interior Ministry undersecretary known to be a friend of President Ahmet Necdet Sezer.

Observers say the AKP is unlikely to change NATO member Turkey’s policy on Iraq which faces the threat of war from the United States. Turkey is expected to provide support to Washington if the United States does go to war. Babacan Seen Pro-IMF

Turkey’s IMF economic rescue programme is aimed at overcoming the damage caused by the country’s financial crisis in 2001 and markets have been eagerly awaiting the naming of the economy minister who will be crucial to market confidence.

Babacan–who at 35 is one of the youngest AKP deputies–is untried in government. He has been in the private sector since earning an MBA in the early 1990s in the United States–where he also worked as a financial consultant.

"It’s a positive development. He’s one of the masterminds of explaining the party’s economic programme," said Hakan Avci–strategist at Global Securities. "Maybe you could argue that Babacan doesn’t have much experience in state affairs but he’s coming from the private sector."

Observers say Babacan is pro-Western–embracing Turkey’s European Union ambitions–and has said the AKP government would stick by the basic principles of Turkey’s IMF pact.

Babacan–until now AKP’s coordinator for economic affairs–recently pledged the AKP would keep the banking watchdog independent from political influence–saying regulation of the sector that was at the heart of two devastating financial crises was "one of the most important" factors in Turkey’s economic recovery programme.

The government takes office from the moment the president approves the list–though it then needs to win a confidence vote which should be a formality given AKP’s large majority in parliament.

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