Mesut Yilmaz took over as Turkey's prime minister on 30 June, formally ending the year-long tenure of an Islamist-led government. The staunchly secularist Yilmaz, however, has to win a confidence vote on 12 July and then show that he can solve the country's economic problems in order to survive in office.

Yilmaz could, as of 3 July, muster 12 more votes in the 550-seat parliament than the conservative-Islamist coalition led by former prime minister Necmettin Erbakan. This thin margin was made possible by a string of resignations from former deputy prime minister and foreign affairs minister Tansu Ciller's True Path Party, the partner in Erbakan's coalition government, which resigned under military pressure on 18 June.

Winning the confidence vote will not ensure the Yilmaz government's survival until his preferred date for general elections in autumn 1998. The coalition that was built around the premier's conservative Motherland Party (ANAP) will be dependent on external support from the Republican People's Party (CHP) led by Deniz Baykal, who has been insisting that elections should be held before end-1997.

The new government's programme was scheduled to be completed for reading into parliament by 7 July. But its fundamental objectives, enshrined in the coalition's founding protocol announced on 1 July, clearly revealed how much compromise will be required among parties allied only by their common opposition to the Islamists.

The protocol mainly addressed issues at the heart of the Islamist-secular divide, stressing above all that the secular, democratic and legal foundations of the republic will be safeguarded. The document also pledged the extension of mandatory state elementary education to eight years from five, a key military demand for pruning Islamic schools to the previous coalition, but strongly resisted by Erbakan's Welfare Party (Refah).

However, the protocol's bland economic objectives seem carefully framed not to increase friction points between the coalition members, notably the Democratic Left Party (DSP) led by Deputy Prime Minister Bulent Ecevit. And it is in economic policy that potential rifts seem most apparent.

Fault lines are already demarcated in the allocation of posts in the new cabinet, where ANAP predominates with an economic chief in State Minister Gunes Taner, a party veteran, and the bulk of other key economic portfolios (see cabinet list).

Although the protocol says sustainable growth and economic stability are objectives, it makes no direct reference to bringing down high inflation, the economy's most pressing ill. Indeed, Taner has already promised there will not be an austerity package.

The Yilmaz government has also abandoned its predecessor's allegedly unrealistic goal of a balanced budget. When announcing on 2 July that the government will introduce a TL 2,000 million million ($13,500 million) supplement, Taner nevertheless said the end-1997 budget deficit will probably work out at between TL 1,500 million million- 2,500 million million.

The new administration has been handed an economic chalice poisoned by its predecessor's inflationary blandishments in the shape of high public sector wage hikes and payments to farmers, economists say. But, it also clearly aims to give itself as much room as possible to do the same when deemed necessary, the economists add.

Other points in the protocol seem equally vague, the economists say. They pledge that:

government debts and deficits will be reduced gradually

the country's vast unregistered economy will be kept under control

taxation will be reformed, and the tax base will be widened

corruption will be rooted out

economic measures will also be taken to improve conditions in the country's deprived southeast

However, the protocol fails to make any mention of privatisation, the economists note. Nor does the protocol refer in detail to reform of the country's bloated social security system, although it says precautions will be taken to prevent the system from bankruptcy.

Gunes himself says the new government hopes to generate revenues of around $4,000 million in 1997 from privatisation. But opposition, organised by leading DSP Ankara member Mumtaz Soysal, to legislation for denationalisation has constantly been a thorn in the side of privatising administrations since the early 1990s, the economists say.

Both privatisation and the streamlining of social security are key, long-term restructuring measures sought by Turkey's Western economic mentors such as the IMF and the World Bank. They are also yardsticks of commitment to long- term reform for international risk ratings agencies, whose judgements strongly influence the international lending markets.