Turkey's ongoing financial crisis threatens not only the country's domestic stability, but also a variety of Western economic and strategic interests in the Middle East, Caspian Basin and Central Asia. Despite the high stakes, the Turkish president and prime minister, whose shouting match sparked the country's economic implosion, have been slow to reconcile. Meanwhile, the international organizations, specifically the International Monetary Fund and the World Bank, are scrambling to salvage Turkey's reeling economy.

On March 1, President Ahmet Necdet Sezer and Prime Minister Bulent Ecevit held their first face-to-face meeting since their now infamous row February 19. Neither president nor prime minister commented on the substance of their discussions. Also, on March 1, Kemal Dervis, a Turkish national and deputy head of the World Bank, flew to Turkey to discuss economic reorganization efforts with Ecevit. Many economic observers in Ankara expected Ecevit to offer Dervis the chairmanship of the Turkish Central Bank.

So far, Ecevit has been fiercely resistant to calls for an economic overhaul. Defying opposition calls to step down, Ecevit insists his government will stay on, and that economic reforms remain on track. He has opposed a cabinet reshuffle, which business leaders have called for to restore confidence in his government. Two ranking bureaucrats, Central Bank governor Gazi Ercel and Treasury Undersecretary Selcuk Demiralp, have lost their jobs instead. They have yet to be replaced.

"They are not shoving [aside] the people responsible for the crisis, but the ones who were carrying out the IMF program under their orders," said a senior Western diplomat. "Moral and fiscal accountability clearly does not figure in this government's thinking."

As the Turkish government remains stalemated, the IMF announced March 1 that it would make available billions of dollars in loans to help restore financial stability. The economic crisis has caused the Turkish currency, the lira, to loose approximately a quarter of its value, while forcing massive layoffs and skyrocketing prices. It has also prompted the abandonment of an IMF-supported program to contain inflation.

US President George W. Bush offered his support both in a telephone call and a follow-up letter to Turkish leaders. However, one senior Western diplomat characterized the US administration's stability efforts as insufficient. "It will take more than a presidential phone call to set things right here," the diplomat said.

Turkey's fiscal crisis, the country's second in three months, has sent share prices plummeting in emerging markets from Russia to Argentina. But the threat to regional stability extends far beyond the financial markets. Turkey's economic instability raises fresh concerns about the feasibility of the proposed Baku-Ceyhan pipeline project, which would funnel Caspian Basin oil and gas through Turkey for export to Western markets. The Turkish crisis also may encourage the states of Central Asia to turn increasingly to Russia for assistance in containing Islamic radicalism. Since the collapse of the former Soviet Union, Turkey has provided a considerable amount of military assistance to Central Asian nations, but the crisis may limit Ankara's ability to provide assistance in the future.

Turkey's pivotal location at the heart of the Islamic world, and between the former Soviet Union and Europe, makes it a key member of the North Atlantic Treaty Organization. With an increasingly dynamic private sector and a rapidly growing population hungry for Western consumer goods, Turkey, for all its troubles, remains a highly lucrative market for foreign investors. In short, the West needs the country today as much as it did during the Cold War.

Finally, the crisis would appear to seriously dent Turkey's chances of gaining European Union membership in the near-to-medium term.

The row between Ecevit and President Sezer erupted behind closed doors at a February 19 meeting of the National Security Council, which was attended by the country's top generals, key cabinet ministers and high-ranking bureaucrats. The primary topic of discussion at that meeting was a draft program to better position Turkey for EU membership. Instead, the president and prime minister began arguing. Ecevit stormed out the meeting, and held a press conference accusing the president of insulting him in the presence of his subordinates.

For many Turks, the most depressing aspect of the crisis is that even if Ecevit were to step down, there are no obvious alternatives to the three way coalition between his Democratic Left Party (DSP), the far-Right Nationalist Action Party (MHP) and the conservative Motherland Party (ANAP).

Riven by internal feuds, and reviled by Turkey's staunchly pro-secular generals, the main opposition Islamist Virtue party, is facing closure by the constitutional court over thinly supported charges that it is seeking to introduce Islamic rule. Discredited by a slew of sleaze allegations, Tansu Ciller, the leader of the conservative opposition True Path party is no better placed to take charge of the country.

The undemocratic nature of Turkey's legislation on political parties grants party leaders broad powers, effectively allowing them to run their parties without much accountability. Few respond kindly to criticism and dissenting party members are routinely booted out.

The notoriously prickly Ecevit has proved no exception. It was after Sezer asked Ecevit why he was "so unnerved" by a string of corruption probes implicating a member of his cabinet, that the crisis erupted at the February 19 National Security Council meeting.

The President was clearly alluding to Cumhur Ersumer, the energy minister from the ANAP wing of the government. Both Ersumer and Mesut Yilmaz, the ANAP leader and a deputy prime minister in the coalition, have been linked to the "White Energy" scandal, in which senior energy ministry officials have been accused of receiving kickbacks.

Ecevit, whose own probity has never been in question, has nonetheless been accused of protecting ANAP in order to hold his frail coalition together. "Mr. Ecevit does not eat [is not corrupt] but he allows others to eat [be corrupt]," wrote Hasan Pulur, a conservative commentator for the daily Milliyet.

It was with such concerns in mind that President Sezer recently launched his own investigation into graft ridden state-owned banks. A furious Ecevit is said to have accused the President of overstepping his constitutional role during the now famous National Security Council meeting.

According to some reports, Sezer flung a copy of the constitution at the prime minister saying he knew "nothing of its contents." That is when Mr. Ecevit left the room and Husamettin Ozkan, his most trusted lieutenant and heir apparent, is said to have flung the constitution back at the president and called him "an ungrateful cat."

It was Ecevit who nominated Sezer after parliament voted against his plans to extend the mandate of the former President, Suleyman Demirel. Surveys conducted in the aftermath of the political firestorm show that most Turks are taking Sezer's side. Since assuming the presidency last May, Sezer has won the sympathy of millions of his fellow countrymen with his modest ways and near obsession with probity. At the same time, Sezer angered Ecevit by overruling a series of government decrees. Among the most controversial was a law that would have authorized the government to sack hundreds of civil servants deemed to be overly pious or sympathetic to the country's approximately 12 million Kurdish residents.

In a bid to defuse the crisis, Turkey's ever-influential generals are widely believed to have prodded Ecevit to mend fences with Sezer. But it remains unclear how effectively the president and prime minister will be able to mend fences. Turkey's ability to influence regional developments may greatly depend on the Sezer's and Ecevit's capacity to reconcile.