TURKEY'S CRISIS OPTIONS

MANY distinguished sources believe that Turkey will tilt back towards the European Union, where its bid for membership has all but expired.

Ankara has high hopes that Germany, which Erdogan visits this month may lead European efforts to shore up Turkey financially.

But any EU aid is unlikely to be enough.

A PLEDGE by Qatar, Turkey's closest Arab ally. to invest $15 billion has had little impact.

''The economy is a big concern because people are getting poorer'' the source close to AKP said.

''In all these years we didn't invest, except in construction, and we cannot eat that. We missed trains like investing in technology and industry.''

As inflation spikes, the central bank s signalling a rise in interest rates next week to break the lira's free fall.

But given Erdogan's belief that interest rates, which he calls the ''mother and father of all evil'' - are a cause of inflation, any may be too little and too late.

That increases the likelihood that Turkey may have to go to the IMF for the size of the bail-out it needs. The government rules this out as an unacceptable surrender of sovereignty.

''I have need of the IMF,'' Finance Minister Berat AIBbayrak told Reuters on Sunday. The minister is Erdogan's son-in-law.

''Going to the IMF would be a very big challenge,'' said the source, ''since we use to bash it frequently in our campaign slogans and we were very proud of ridding ourselves of the IMF burden'' after 2000-01 financial crisis shortly before the AKP came to power.

However the source said is good in explaining things to the nation and has near total control of the media

The government may ''muddle through'' for a while, one academic says, but mass unemployment and unrest may result if Erdogan does not take action.

''This country is too big to sink with him,'' said the Liberal critic who requested anonymity. ''But his power base will shrink with this depreciation .

Erdogan's emphasis on foreign plots ''translates into votes for the [ultra nationalist] MHP not the AKP.''

''I think it's impossible for him maintain this level of support in the face of economic collapse,'' said a former AKP activist. [Agencies]