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Turkey ordered a re-run of mayoral elections in Istanbul, overturning a rare defeat for President Recep Tayyip Erdogan and sending the lira plummeting as concerns grew over what critics say is the latest assault on the rule of law.

Erdogans AK Party had demanded the revote, and the High Election Board late Monday accepted its allegations that the March 31 balloting was tainted by irregularities in the vote count and the appointment of ineligible people as ballot officials. Erdogans party had lost the initial election in Turkeys largest city and commercial center by a narrow margin to Turkeys main opposition group, in perhaps his worst ballot-box setback during 16 years in power.

The new election will be held June 23, the board decided after voting 7-4 for another poll. Stocks erased this years gains.

Istanbul Mayor Ekrem Imamoglu addresses supporters on May 6

Photographer: Burak Kara/Getty Images

The board came under heavy public pressure from Erdogan, whos been criticized by Turkeys Western allies and domestic opponents for undermining democracy by riding roughshod over independent institutions while amassing unprecedented powers.

The decision is also troubling for investors in Turkeys $750 billion economy. Theyve already pulled money out in the past year as the country slumped into recession, and now they face an extended period of political turmoil.

This is a dirty game about the refusal of those who are elected to power to not leave after an election, said Faik Oztrak, a deputy chairman of the main opposition party, CHP. This is a coup against the last bastion of legitimacy of democracy, the ballot box.

European Union foreign-policy chief Federica Mogherini urged Turkeys government to invite international observers to monitor the revote. Ensuring a free, fair and transparent election process is essential to any democracy and is at the heart of the European Unions relations with Turkey, Mogherini said.

The lira on Monday extended declines on Tuesday morning to almost 2 percent and was trading at 6.1567 per dollar as of 9:48 a.m. in Istanbul. The benchmark XU100 stock index was down 2 percent.

Were in a political twilight zone, where the economy has fallen to the side, said Anthony Skinner, Middle East and North Africa director at risk analyst Verisk Maplecroft. The repeat vote prolongs the electoral cycle, exacerbates negative economic conditions and kicks the can of reform -- to the extent that it exists -- further down the road.

Police guard the High Election Board building in Ankara on May 6.

Photographer: Adem Altan/AFP via Getty Images

The lira has been among the worlds worst performers over the past year. Its most dramatic crash came last August, triggered in part by a standoff with the U.S. over an American pastor who was held in Turkey on terrorism charges. The currency resumed its decline after the local elections as Erdogan challenged the result.

Further losses for the lira could drive inflation -- already running at nearly four times the official target -- even higher. It may also hurt the ability of Turkish companies to service debt. They borrowed heavily in dollars and euros, and have been struggling to make payments since last years currency crash.

The election board canceled the mandate of the CHPs victorious candidate in March, Ekrem Imamoglu, who had assumed office as Istanbul mayor almost three weeks ago. An interim mayor will replace him.

Addressing thousands of supporters in Istanbul late Monday, Imamoglu denounced the election boards decision and said he would try in the election rerun to win over voters who had originally cast ballots for the AKP or other parties.

In the original tally, Imamoglu had defeated the AK Partys Binali Yildirim, a former prime minister and close Erdogan ally, by a margin of about 14,000 votes in a city with more than 10 million voters. Yildirim said he, too, will run again.

In the weeks after the election, Erdogans approach fluctuated. At times he appeared to concede that Istanbul was lost. But he was also gradually turning up the heat on the election board.

His most explicit call for a new vote came this past weekend, when he said election laws had clearly been violated because private-sector employees were enlisted as ballot officials instead of civil servants.

Istanbuls chief prosecutor bolstered the presidents argument, alleging that dozens of officials involved in administering the vote had links to U.S.-based Islamic preacher Fethullah Gulen. Turkey accuses Gulen of masterminding a failed coup attempt against Erdogan almost three years ago, and has jailed or fired tens of thousands of officials for alleged ties to the cleric, who was once an Erdogan ally.

The opposition dismissed the allegations, and accused Erdogans government of looking for any excuse to manipulate the vote.

The highly contentious decision to annul the election demonstrates that that there is not a single institution in Turkey that President Tayyip Erdogan does not dominate and control, said Wolfango Piccoli, co-president of Teneo Intelligence in London. By forcing a rerun, Erdogan has also taken a major risk as elections have been key for the AKP to claim a sense of democratic legitimacy since it first came into power in 2002.

With assistance by Cagan Koc

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Turkey Orders Istanbul Vote Rerun After Erdogan Rejects ...

Has the Middle East lost its biggest democracy?

Turkey's election board canceled the result of a March 31 mayoral vote in Istanbul and will hold a new ballot next month. That tilts the balance towardan outcome favorable to President Recep Tayyip Erdogan after his candidate lost the nation's biggest city.

The annulment raises serious concerns about whether Turkey can have peaceful transitions of power during Erdogan's 16-year rule the nation has plunged down most rankings of democratic governance. There's also a question over whether Turkey can afford it.

In the midst of its first recession in a decade, the government went for broke in the March municipal elections: The central bank blew through foreign reserves, while the state intervened in food markets to shield voters from rampant inflation, pressured banks to keep interest rates artificially low and barred foreigners from shorting the lira, sending overnight swap rates surging above 1,000 percent.

Other shocks loom: If Turkey receives Russian missiles it ordered next month, it's likely to face U.S. sanctions. The last thing it needs is more political turmoil, election-related spending and stop-gap measures to shore up its economy.

With Turkey's credibility on the line, even if Erdogan gets Istanbul back, the country won't be the same.

Erdogan arrivesat Huber Mansion in Istanbul onMarch 31following thelocal elections.

Photographer: BULENT KILIC/AFP

Global Headlines

Just in: U.S. Secretary of State Michael Pompeos plannedvisit to Berlinwas canceled at short notice due to pressing issues. Pompeo had been due tomeetwith German Foreign Minister Heiko Maas before dinner-time talks with Chancellor Angela Merkel, both of whom are critical of U.S. policy under President Donald Trump, from trade tariffs to Iran.

Keeping hope alive | Beijing is signaling it's not ready to give up on a trade pact with the U.S. Chinas lead negotiator Liu He will visit the U.S. this week despite Trump's threat to raise tariffs on Chinese goods. As for what set the president off? Jenny Leonard, Saleha Mohsin and Jennifer Jacobs report that it was word from his own top trade emissary that China was backtracking on a deal.

It's the economy | Jobs are growing at a faster rate in Trump country than in the Democratic-leaning urban and coastal areas that long had been a main driver of U.S. economic expansion. As Mike Dorning reports, the uptick is crucial to Trumps re-election chances in 2020. The White House and many Republicans are counting on the economy to compensate for the churn of controversies in the administration and the presidents low approval ratings.

Crude calculation | The Canadian government's likely decision to proceed with a key oil-pipeline expansion before October's election is a risky gambit, Josh Wingrove writes. Prime Minister Justin Trudeau is deeply unpopular in oil-rich areas and relies on environmentalists as part of his center-left coalition. Developing the Trans Mountain project may make economic sense for a country short on shipping capacity, but the political cost could be high.

Election jitters |South African President Cyril Ramaphosa's prospects of emerging from tomorrow's general election with a strong mandate for reform have investors on tenterhooks. With the ruling African National Congress likely to win a majority but remain riven by factions, one-week implied volatility for the rand against the dollar is now higher than any other emerging-market currency including the Turkish lira.

Restless Russians | Most riders of the gleaming express train between Moscow and St. Petersburg barely notice the stop in Okulovka along the way. But as Henry Meyer and Ilya Arkhipov report, the small town has become a center of protest, one of many springing up across Russia as the Kremlin, squeezed by sanctions, cuts spending on health and other services. Support for Vladimir Putin is taking a hit.

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And finally...Reuters reporters Wa Lone and Kyaw Soe Oo were released from prison in Myanmar under a government amnesty after spending more than 500 days behind bars for allegedly breaking the official secrets act. International criticism was heaped on Myanmar and its de facto leader, Aung San Suu Kyi, after the journalists were jailed for their reporting on atrocities against ethnic Muslims in western Rakhine State, work for which they were awarded a Pulitzer Prize.

Wa Loneand Kyaw Soe Oo outside Insein prison in Yangon earlier today.

Photographer: AFP

With assistance by Kathleen Hunter, and Gordon Bell

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Erdogan Crossed a Line on Turkeys Democracy: Balance of ...

The decision by Turkish authorities to wipe away a stinging defeat for President Recep Tayyip Erdogan and rerun the election for mayor of Istanbul left the opposition angered but determined on Tuesday to win the race a second time.

Ekrem Imamoglu, the opposition candidate who narrowly won the March 31 election, only to have that victory annulled on Monday, announced on Tuesday that he would run again, and rallied his supporters by retweeting a message from his partys Twitter account that said, We will win again.

The move by Mr. Erdogan to overturn the election results quickly reverberated through Turkey and beyond. Sporadic protests broke out Monday evening after the announcement, and the lira, a barometer of the way foreign investors regard the country, declined sharply on Tuesday down 5 percent from earlier in the week.

The decision by the High Electoral Council, which cited irregularities in how officials were chosen to oversee voting at some polling stations, left the opposition with the difficult decision of whether to take part in a new election that it considers illegitimate.

Boycotting the vote would have handed control of the countrys financial capital and largest city back to the president and his party. Instead, Mr. Imamoglu and the opposition made the choice to compete in a new election, scheduled for June 23, even as they denounced it an affront to democratic principles.

Our democracy has been struck a great blow, Mr. Imamoglu told reporters on Tuesday in Ankara. We should all fix this process together.

Early Tuesday, several minor candidates announced that they would withdraw from the race, in an apparent effort to forge a united front and throw their support behind Mr. Imamoglu. That could tip the balance in a race that was decided the first time by a razor-thin margin, less than 0.2 percent of the vote.

Mr. Imamoglus win over Binali Yildrim, the candidate of the governing Justice and Development Party, or A.K.P., was an embarrassing blow to Mr. Erdogan in his home city.

Mr. Erdogan was voted in for another five-year term as president last year, with sweeping new powers, strengthened by recent changes to the constitution. But political analysts say the opposition wins in several cities in March, including Istanbul and the capital, Ankara, infuriated Mr. Erdogan. The president and the A.K.P. alleged irregularities and petitioned for a new vote.

After an initial recount of some contested districts in the city, election officials certified Mr. Imamoglu as the winner, and he entered office in April.

But in a stunning reversal, the High Election Council ruled, 7 to 4, on Monday in favor of the governing party and called a new vote. The move drew criticism in the country and abroad as the latest example of Mr. Erdogans authoritarian overreach and a blow to Turkeys democratic foundation. The governor of Istanbul will act as interim mayor until the election.

Mr. Erdogan addressed lawmakers in Parliament on Tuesday, saying the nation could not ignore unlawfulness in the election.

I believe the people of Istanbul will make the right decision on June 23, he said. We consider this decision that cleaned up the shadow over the Istanbul elections as a step to strengthen our democracy.

On Tuesday, lawmakers from the Republican Peoples Party, the opposition party of Mr. Imamoglu, gathered in Ankara to plot a way forward.

Everything is going to be very fine, the partys leader, Kemal Kilicdaroglu, told reporters outside the party headquarters, according to the Turkish newspaper Cumhuriyet. Despite everything we will bring democracy to this country.

In a televised speech Monday night, Faik Oztrak, a party spokesman, had used similar language as he denounced the decision to rerun the election as an attack on legitimate democracy.

Considering the narrow margin between Mr. Imamoglu and Mr. Yildirim, the withdrawal of the other opposition candidates, who took a combined 2.6 percent of the vote, could make a difference.

The Turkish Communist Party withdrew its candidate, and the Communist Movement and Labour Movement Party, two groups whose candidates ran as independents, announced that they would also withdraw.

One of the biggest points of criticism of the councils decision to invalidate the results was that it applied only to the result of Istanbuls mayoral election, not the many lower offices that were contested at the same time.

Meral Aksener, the head of a nationalist party that supported Mr. Imamoglu, raised that question when addressing lawmakers in Parliament Tuesday.

In those envelopes there were four ballots. Four ballots under the jurisdiction of the same ballot box officials, she said. Choosing only the metropolitan municipality votes and canceling those ones how can you explain it?

Some analysts said Mr. Erdogans decision to dispute the election could damage him in the long term and was likely to increase support for the opposition.

Ozgur Unluhisarcikli, the director of the German Marshall Fund in Ankara, a policy institute, said that Mr. Erdogan was not merely gambling, but playing Russian roulette.

The stakes are very high. The odds are against him, Mr. Unluhisarcikli said. This is a question about whether Erdogan is willing to pay a long-term political price to take Istanbul.

The political turmoil has worsened an already precarious economic situation in Turkey. Inflation is at almost 20 percent, eroding living standards at the same time that growth has stalled.

Mr. Erdogans successful bid to nullify the Istanbul election results is certain to further undercut the confidence of the foreign investors whose money has fueled Turkish growth, but who have become increasingly disenchanted with his management of the economy.

Every decline in the lira amplifies the countrys problems and heightens the danger of a vicious circle of rising prices and sagging growth. When the lira loses value, imported goods become more expensive, feeding inflation. Turkish companies that have borrowed money in dollars, a common practice, have more trouble repaying their loans as the lira they earn in sales decline in value.

Bankruptcies in Turkey are already on the rise, straining Turkish banks. Business people complain that government agencies and courts are tilted in favor of Erdogan cronies.

Yet, with another election pending, Mr. Erdogan is unlikely to impose the austerity measures and other reforms that economists say are needed to tame inflation and prevent a credit bubble from bursting.

Opposition protesters had rallied on the streets of Istanbul on Monday night after hearing the news of the new election, but by Tuesday, the streets were quiet.

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In Istanbul Election Do-Over, Erdogans Opponents Unify

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Istanbul's mayoral election was affected by "organised crime and serious corruption", Turkish President Recep Tayyip Erdogan says.

Mr Erdogan was defending the decision to re-run the 31 March vote, which returned a slim win for the opposition.

Opposition candidate Ekrem Imamoglu, who has been stripped of his duties, described the move as "treacherous".

The European Parliament also said the decision would end the credibility of democratic elections in Turkey.

The decision to hold a new vote, which will be held on 23 June, sparked protests across the city on Monday. Hundreds of people gathered in several districts, banging pots and pans and shouting anti-government slogans.

The opposition sees the move by the electoral authorities as bowing to Mr Erdogan's pressure, says the BBC's correspondent Mark Lowen.

Istanbul's Governor Ali Yerlikaya has been assigned as the acting mayor of the city until the new vote.

Speaking at a parliamentary meeting of his AK Party, Mr Erdogan said that re-doing the vote was the "best step" for the country.

"We see this decision as the best step that will strengthen our will to solve problems within the framework of democracy and law," he said.

He insisted there was "illegality" in the vote and said a re-run would represent "an important step to strengthen our democracy".

The president, who first came to power in 2003, also said "thieves" had stolen the "national will" at the ballot box, adding that if they were not held to account "our people will demand an explanation from us".

An AKP representative on the electoral board, Recep Ozel, said the re-run was called because some electoral officials were not civil servants and some result papers had not been signed.

But CHP deputy chair Onursal Adiguzel said the re-run showed it was "illegal to win against the AK Party".

Mr Adiguzel tweeted that the decision was "plain dictatorship".

"This system that overrules the will of the people and disregards the law is neither democratic, nor legitimate," he wrote.

And in a speech broadcast on social media, CHP's Ekrem Imamoglu, who was confirmed as Istanbul's mayor before being stripped of the title, condemned the electoral board and said they were influenced by the ruling party.

"We will never compromise on our principles," he told the crowd. "This country is filled with 82 million patriots who will fight... until the last moment for democracy."

A supporters' group for Mr Imamoglu urged restraint, saying: "Let's stand together, let's be calm... We will win, we will win again."

The European Union called for Turkey's election body to explain its reasons for the re-run "without delay".

"Ensuring a free, fair and transparent election process is essential to any democracy and is at the heart of the European Union's relations with Turkey," the EU's diplomatic chief, Federica Mogherini, said in a statement.

Germany's Foreign Minister Heiko Maas said the decision was "not transparent, and incomprehensible to us".

The French government also said the Turkish authorities needed to show "respect for democratic principles, pluralism, fairness [and] transparency" in the new poll.

Municipal elections took place across Turkey on 31 March and were seen as a referendum on Mr Erdogan's leadership amid a sharp economic downturn.

Although an AKP Party-led alliance won 51% of the vote nationwide, the secularist CHP claimed victory in the capital Ankara, Izmir, and in Istanbul - where Mr Erdogan had once been mayor.

In Istanbul, more than 8 million votes were cast and Mr Imamoglu was eventually declared the winner by a margin of less than 14,000.

The ruling party has since challenged the results in Ankara and Istanbul, which has prompted opposition accusations that they are trying to steal the election.

President Erdogan was in typically conspiratorial form, slamming what he called "the dark circles, economic saboteurs and so-called elitists" who were attacking Turkey and collaborating to "rob the nation of its will".

He was never going to take the loss of Istanbul lying down. "Whoever wins Istanbul wins Turkey", he has often said. He is determined to win back the country's economic powerhouse.

But it's a strategy fraught with risk. The Turkish lira - which has lost more than 30% over the past year - has slumped again. An economy in recession can hardly cope with more uncertainty. After all, it was economic woes that lost Istanbul for Mr Erdogan in the first place.

What's more, Ekrem Imamoglu, who was formally appointed mayor last month, is gaining popularity, fast. He's reached out beyond his base and has settled into the role with ease. The re-run could widen his win - barring major irregularities against him, which many of his supporters fear.

And Mr Erdogan's own party is deeply split on the issue. His diehard loyalists believe victory was stolen. But other wings of the party accept they lost, and that rejecting the result is another nail in the coffin for what's left of Turkish democracy.

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Turkey's Erdogan defends Istanbul election re-run amid ...

ANKARA, Turkey (AP) Turkish President Recep Tayyip Erdogan insisted Tuesday that rerunning the Istanbul mayoral vote that was won by the opposition will only strengthen democracy, while critics called the decision an outrageous move to eliminate dissent against his government.

Ruling in favor of Erdogans governing party, Turkeys top electoral body on Monday annulled the results of the March 31 vote in Istanbul, which opposition candidate Ekrem Imamoglu narrowly won, and scheduled a re-run for June 23.

The will of the people has been trampled on, said Meral Aksener, leader of a nationalist party in Turkey that had backed Imamoglu.

The loss of Istanbul and the capital of Ankara in Turkeys local elections were sharp blows to Erdogan and his conservative, Islamic-based Justice and Development Party, or AKP.

AKP had challenged the results of the vote, claiming it was marred by irregularities. Critics accuse the AKP of trying to cling to power in Istanbul, a city of 15 million people that is Turkeys cultural and commercial hub, and of exerting heavy pressure on the countrys electoral body to cancel the outcome of the March 31 vote.

The controversial decision has increased concerns over democracy and the rule of law in Turkey, a NATO member that is still formally a candidate to join the European Union. Turkey is also a key Western ally in the fight against terrorism and in stemming of the flow of refugees to Europe.

The move is raising questions about whether Erdogan, who has consolidated power throughout his 16 years in power and is increasingly accused of authoritarianism, would ever accept any electoral defeat or relinquish power.

This outrageous decision highlights how Erdogans Turkey is drifting toward a dictatorship, Guy Verhofstadt, a European Parliament lawmaker and the leader of the Alliance of Liberals and Democrats, said on Twitter.

Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy, described the decision on Istanbul as a seismic event in Turkish history.

Turkey has been holding free and fair elections since the 1950s, he told The Associated Press. Never before has a party refused to accept the outcome of the election... This goes against 70 years of accepted tradition.

(Erdogan) is saying lets vote until the governing party wins, he added.

Manfred Weber, the leading conservative candidate seeking to head the European Unions executive branch, told n-tv television in his native Germany that hed end EU membership negotiations with Turkey if hes elected later this month.

Weber, the center-right European Peoples Party candidate and front-runner to replace Jean-Claude Juncker as president of the European Commission, said Turkeys decision on the Istanbul vote was incomprehensible for many of us in Europe.

In the past years, Turkey has unfortunately alienated itself from the values of Europe, he said. For me, that means ending the accession talks between Turkey and the European Union.

Turkish opposition newspaper Birgun branded the decision a coup and argued that justice in the country has been suspended.

The redo of the Istanbul vote also threatens to further de-stabilize the Turkish economy, which has entered a recession.

The Turkish lira crashed spectacularly last summer over investor concerns about Erdogans policies. It has been sliding again in recent weeks and on Tuesday it hit its lowest level since October.

Europes top human rights and democracy watchdog also expressed concerns about reports of pressure exerted by Erdogans government on the electoral body.

We face the repeat elections in Istanbul with great concern and urge Turkish authorities to do their utmost to restore the safeguards of the electoral process, said Anders Knape, president of the Congress of Local and Regional Authorities of the Council of Europe.

Delivering a speech in Parliament on Tuesday, Erdogan reiterated that the vote was sullied by irregularities we could not ignore. He rejected opposition accusations that his party was trying to win back a key election that it had lost.

He said violations included the alleged improper entering of election data and the fact that thousands of officials overseeing the vote at ballot stations were bankers or teachers and not civil servants, as required by law.

We see this decision as an important step in strengthening our democracy, which will enable the removal of the shadow cast over the Istanbul election, Erdogan said.

The opposition, however, has complained about irregularities at Turkish elections in the past years, but their objections have been ignored.

Imamoglu arrived in Ankara on Tuesday for emergency talks with senior members of the opposition Republican Peoples Party, or CHP. Despite media reports about a possible boycott, CHP made clear that Imamoglu would run again in the Istanbul race.

We extend our hand to all our citizens, the party said. We wholeheartedly believe that this extended hand will be held strong on 23 June, that it will strengthen our democratic struggle and that we will achieve a greater victory than on March 31.

On the other side, Erdogan told reporters that former Prime Minister Binali Yildirim would again run as the ruling partys candidate for mayor.

Also Tuesday, the Interior Ministry appointed Istanbuls governor Ali Yerlikaya as acting mayor of the city. The Istanbul municipality immediately deleted all tweets posted by Imamoglu during his 20 days in office as mayor.

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David Rising in Berlin contributed.

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Erdogan defends Istanbul vote redo, critics see power grab