ANKARA (Reuters) - Turkey’s top court closed the only pro-Kurdish party in parliament on Friday for having links to PKK Kurdish rebels in a ruling that deals a fresh blow to the country’s faltering bid to join the European Union.

Pro-Kurdish Democratic Society Party (DTP) leader Ahmet Turk addresses the media in front of his party headquarters in Ankara December 11, 2009. Turkey's top court on Friday closed the country's main pro-Kurdish party for having links to PKK Kurdish rebels in a ruling that could undermine efforts to end a long-running conflict with the separatists.The ruling imposes a five-year ban from politics on 37 members of the DTP, including Ahmet Turk. REUTERS/Stringer

The EU promptly issued a statement of concern, having warned that banning the Democratic Society Party (DTP) would violate Kurdish rights and could set back the government’s drive to end decades of conflict with militant Kurdish separatists.

Turkey’s Constitutional Court voted unanimously to ban the DTP after finding it guilty of cooperating with the Kurdistan Workers’ Party (PKK) separatist guerrilla group.

“The DTP’s closure was decided due to its connections with the terror organization and because it became a focal point of the activities against the country’s integrity,” Constitutional Court Chairman Hasim Kilic said.

The ruling will raise political tensions and could hit sentiment in Turkish financial markets when they reopen.

“Implications ... on Turkish assets will be negative for the short term due to a possible increase in the political risk premium,” said Mehmet Ilgen from ATA Invest.

The decision was announced after markets had closed, but the lira currency slipped and bond yields rose in after-hours trade.

GAMBLE

With EU membership in mind, Prime Minister Tayyip Erdogan’s Islamist-rooted AK Party took a political gamble when he launched reforms to improve Kurds’ cultural rights in the hope of ending a conflict that has cost more than 40,000 lives.

In courting Kurdish support, Erdogan incurred hostility from a conservative establishment, including the judiciary, that historically regards Kurdish aspirations for more autonomy as a threat to the secular state founded by Mustafa Kemal Ataturk.

The PKK has fought for 25 years for a Kurdish homeland in southeastern Turkey. The Kurds, who make up around 20 percent of the population but were for decades forbidden to use the Kurdish language, have long complained of discrimination.

The ruling bans 37 members of the DTP from politics for five years. The DTP is the only Kurdish party in parliament, and controls about 100 municipalities in the southeast.

“Turkey cannot solve its problems by closing down parties,” DTP chairman Ahmet Turk told reporters.

“As long as our goal is a solution to the Kurdish problem, it doesn’t matter who is banned or not from politics, because our determination to find a solution continues.”

He had said all 21 DTP deputies in Turkey’s 544-seat parliament would resign if the party was banned, which could trigger a by-election in Kurdish districts.

Sweden, speaking for the EU, said that while it strongly denounced violence and terrorism, “the dissolution of political parties is an exceptional measure that should be used with utmost restraint.”

It said the EU would monitor further developments closely.

HISTORY OF BANS

Turkey has a long history of banning or overthrowing political parties deemed a threat to national security, including Islamists and Kurdish groups.

Analysts say the ban could strengthen the PKK’s hand by undermining confidence in the democratic process and the government’s Kurdish reform, backed by the United States as a way to help bring stability to neighboring Iraq.

Wolfango Piccoli, analyst at Eurasia, said the ruling would stoke ethnic tensions and hurt support for the AK Party among Kurds and nationalists ahead of a general election set for 2011.

Residents of Diyarbakir, the main city in the mainly Kurdish southeast, which witnessed scenes of violence ahead of the verdict, voiced their disenchantment.

“We think that to ban our political party, which reached its position with our votes, is an attack on democracy,” said Orhan Altun, a Kurd in his 20s watching the announcement of the verdict on television in a cafe in Diyarbakir.

Many non-Kurds were unsympathetic.

“I think this an appropriate decision. What can I say?” said Ali Kaya, a Turk in his late 40s waiting for a bus in rainy Istanbul. “They did their best to split our country.”