Reports that the Motherland Parry (ANAP) and Refah Party were close to forming a coalition in mid-February have been welcomed by the local business community.

If a coalition is agreed, it will end months of political uncertainty that have damaged the country's economic performance, analysts say.

ANAP chairman Mesut Yilmaz and Refah leader Necmettin Erbakan held talks on 14-15 February to try to reach an agreement.

However, no announcement had been made about the success of the talks as MEED went to press.

Most business people are confident that an ANAP-Refah government will continue the market reforms that began at the start of the 1980s, as the pro-Western ANAP is expected to dominate the economic agenda. However, some analysts are sceptical about how long such a coalition will last.

Refah campaigned during the December elections with a radical economic programme which included scrapping the use of interest rates and renegotiating the customs union with the EU. However, since then Refah leaders have taken a softer line.