The new government formed after the elections was received positively both in financial markets and business circles. During the first five months, it can be said that the AKP government has made significant progress on most of the points listed in their Emergency Action Plan. Yet the upbeat tone in financial markets after the elections has disappeared completely after five months. There were two main reasons for this deterioration : the government proved its commitment to the IMF program through decisive action only after very strong negative reaction to their earlier appearance of lack of commitment and the seriousness of foreign policy challenges on EU integration, Cyprus and Iraq . Adhering to the IMF program and securing economic support from the U.S. or multilateral agencies are obviously necessary for the Turkish economy in the short term. But the longer term prospects depend on administrative and economic reform, aimed at a comprehensive redesign of the Turkish savings framework in both the public sector and the private sector. AKP, as a single party government with a large majority in parliament, is capable, at least on paper, of such decisive action. Whether they will succeed in taking such action remains to be seen...Please click here to read the text in full.