2001 Turkish economic crisis

Throughout the 1980s and 1990s, Turkey relied heavily on foreign investment for economic growth, with trade above 40% of GNP. The Turkish government and banking systems lacked the financial means to support meaningful economic growth. The government was already running enormous budget deficits, and one of the ways it managed to sustain these was by selling huge quantities of high-interest bonds to Turkish banks. Continuing inflation (likely a result of the enormous flow of foreign capital into Turkey) meant that the government could avoid defaulting on the bonds in the short term. As a consequence, Turkish banks came to rely on these high-yield bonds as a primary investment.

In March 1997 a Coalition was formed between the Motherland Party's Mesut Yılmaz and the True Path Party's Tansu Çiller. The plan was for Yilmaz and Cillar to alternate the Prime Ministry. However, there was much public distraction caused by leader of the Welfare Party Necmettin Erbakan's threats to investigate Cillar for corruption. Meanwhile, Erbakan, who had been excluded from the coalition, did everything he could to rally support for an Islamic NATO, and an Islamic version of the European Union.

The Motherland Coalition collapsed in part because of Erbakan's widespread public support. Addition tensions wreaked havoc on the government. Yilmaz was forced to resign on June 6, 1996, with the government having lasted for only 90 days. Erbakan became Prime Minister on June 29 as the head of a Welfare/True Path coalition. The success of the new Welfare-Path Coalition was viewed with hostility by the military. Erbakan's explicitly Islamist politicies resulted in a post modern coup in which the military forced Erbakan to yield power to Demirel who yielded to Yilmaz on June 19, 1997. The political fighting between Yilmaz and Cillar on one side, and Erbakan on the other would continue, making coalitions difficult to create. In addition, corruption was rampant at this time. People were highly disillusioned with their government. This lack of faith and efficacy would cause foreign nations to carefully examine any investment in Turkey.

...
Wikipedia