Head of Turkey’s nationalist party says has hopes of coalition

The talks come after inconclusive elections in Turkey in June in which the ruling AK party lost its parliamentary majority in the face of the mounting opposition from nationalist and pro-Kurdish parties.

Prime Minister Ahmet Davutoglu and CHP leader Kemal Kilicdaroglu were reportedly engaged in the discussions until late on Monday evening.

“We have not been successful in assuring a favorable base for the creation of a government“, Davutoglu said at AKP headquarters afterwards, insisting the ruling party had “done its best”.

They actually want Erdogan to call early elections.

Reflecting investors’ concerns, the Turkish lira fell to a record low of 2.82 to the dollar. “The country will be put on the right tracks within a few months”, he said.

Opinion polls show that any fresh election, which could be held as early as November, might not deliver the mandate Davutoglu is seeking for the AKP.

Erdogan, 61, has been clawing his way to greater power ever since becoming president in 2014, after 11 years as prime minister.

Davutoglu has until August. 23 to find a junior coalition partner, or Erdogan could call a snap election.

A grand coalition between AKP and CHP would have meant bridging a gaping ideological divide.

The economy cadre of the government instead prefers a broad-based coalition government, arguing the current situation produces instability and eventually influences the country’s economy negatively.

“Turkey has missed a historic opportunity. It is wrong to view early elections as the only alternative”.

“If he [Erdogan] thinks a government may be formed, he may extend this period”, wrote columnist Mehmet Yilmaz in the Turkish daily Hurriyet.

Both the CHP and the MHP feel that such a regulation needs to be introduced or no funds will be given for the upcoming snap election.

While the election authority can cut this by half, it remains unclear whether a snap vote will drastically shake up the electoral makeup of the parliament where no single party won a majority in the June vote. Officials say the party’s grassroots is also opposed to a coalition with the pro-secular party.

The president denies the charges, saying that while a hung parliament presents a “nuisance” he tries to be hopeful about a coalition government.

Last month, the two-year ceasefire ended with Turkey now bombing PKK positions in Iraq and the PKK also carrying out deadly attacks on Turkish security services.

U.S. F-16 fighter jets hit Islamic State targets in northern Syria this week in their first strikes from Turkey’s Incirlik airbase since winning approval to use the facility.