Turkish Prime Minister Ahmet Davutoglu announced his resignation last week. His decision to step down after less than two years in office (and halfway through his term) is the result of a power struggle between Davutoglu and President Recep Tayyip Erdogan and signals the beginning of the next phase in Erdogan’s efforts to consolidate power. His resignation not only portends greater authoritarianism in Turkey but renewed tensions with Europe as well: Erdogan is skeptical of the deal Davutoglu negotiated with the European Union to deal with the continent’s refugee crisis and is likely to reject its key terms.

Davutoglu, a long-serving foreign minister, was handpicked by Erdogan to serve as prime minister, the most important position in Turkey’s government, after he had served three terms — the constitutional limit — as prime minister himself. In August 2014, Erdogan won the country’s first election for president, a largely ceremonial post, but he had made it clear that he sought constitutional reform that would create a powerful chief executive — and he would be it.

Davutoglu apparently enjoyed being the country’s top official and proved reluctant to push the reforms Erdogan sought. On numerous issues, such as relations with the EU, peace talks with Kurdish militants and the treatment of journalists who criticized Erdogan, he challenged the president, staking out a more moderate position, much to Erdogan’s fury.

Erdogan has had no compunction about pushing out former allies, forcing two of the co-founders of his Justice and Development Party (known as AKP) to quit when they disagreed. The final straw for Davutoglu occurred late last month when the party revoked his authority to appoint provincial party officials. Yet, in his speech announcing his resignation, the prime minister said that he would continue to work with the party and promised that he would not “say negative things about the president.”

While it is not clear who will replace him, one thing is certain: the next prime minister will be an Erdogan loyalist, committed to strengthening the president’s power. One candidate is Energy Minister Berat Albayrak, who is also the president’s son-in-law. He has emerged as an efficient and capable soldier, and was reportedly behind media attacks on the prime minister that made his continued presence untenable. His loyalty is beyond question, and there are fears that Erdogan could use him to establish a dynasty.

Regardless of who is named prime minister at the AKP party congress later this month, that person will have their hands full. While the president will be pressing for his cherished constitutional reform, other issues are likely to be higher priorities. The first is rejuvenating an economy that grew about 6.8 percent a year from 2002 (when the AKP first took power) and 2007, but last year expanded at just 4 percent and is expected to fall further to 3.5 percent. Average income has been largely flat and inflation has exceeded central bank targets for most of the last decade.

Turkey’s economic travails are the product of several factors: a falloff in tourism prompted by Europe’s problems and deteriorating relations with Moscow — Turkey was a preferred destination for vacationing Russians — as well as concerns about terrorism. Political turmoil will strangle attempts at reform, especially if politicians are more focused on Erdogan’s agenda. There are fears that the central bank could cut interest rates — Erdogan insists, against all evidence, that high rates cause inflation — to buy support for the government. The prospect of easier money and more political influence over the central bank has some analysts up in arms, although presidential advisers and top government officials say that there will be no change in economic policy.

Davutoglu’s departure is also likely to signal an intensification of the crackdown against domestic dissent, both real and imagined. Erdogan has implemented a harsh offensive against critics, launching nearly 2,000 legal cases against people accused of insulting him and seeking to expand the definition of “terrorist” to include anyone who even vocally supports a terrorist organization, including scholars, journalists and legislators. This hard line has alarmed human rights groups and is a powerful obstacle in Turkey’s relations with Europe.

Davutoglu last week concluded an agreement with the EU that would give Turks visa-free travel in Europe — in exchange for Ankara’s dealing with refugees from Syria — but Ankara must meet 72 criteria the EU imposes on all states exempt from visas and five remain outstanding, one of which requires Turkey to narrow its legal definition of terrorism. Erdogan has said that he will not and demands that Europe instead take a harder line against groups he considers extremists. That relationship will heat up as Erdogan assumes a more prominent role in dealings with Europe.

Western leaders also worry that Erdogan’s focus on Kurdish terrorism will come at the expense of the wider campaign against the Islamic State extremists. Turkey is on the front lines of that battle, but Ankara’s struggle against the Kurds could overtake that contest; there are signs that the Turkish government will see Kurdish extremism when it is in fact the Islamic State group at work. Erdogan has assumed that his allies need him more than he needs them. That assumption will be tested in the months to come.

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