Turkey's president vows to choke off businesses linked to the US-based cleric he blames for the coup

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ISTANBUL (Reuters) - Turkish President Tayyip Erdogan vowed on Thursday to choke off businesses linked to the U.S.-based cleric he blames for an attempted coup, describing his schools, firms and charities as "nests of terrorism" and promising no mercy in rooting them out.

Business is the arena in which the network of Fethullah Gulen is still the strongest, Erdogan said in a speech from his palace broadcast live. Those who "financed the shooters" would be treated like the coup plotters themselves, he said.

Erdogan accuses Gulen of harnessing an extensive network of schools, charities and businesses, built up in Turkey and abroad over decades, to infiltrate state institutions and build a "parallel structure" that aimed to take over the country.

The 75-year-old cleric denies the allegations.

More than 60,000 people in the military, judiciary, civil service and education have been detained, suspended or placed under investigation for alleged links to his "Hizmet" (Service) movement since the July 15 coup, prompting fears among Western allies and rights groups of an indiscriminate witch-hunt.

"They have nothing to do with a religious community, they are a fully-fledged terrorist organization... This cancer is different, this virus has spread everywhere," Erdogan told heads of chambers of commerce and bourses attending his speech.

"The business world is where they are the strongest. We will cut off all business links, all revenues of Gulen-linked business. We are not going to show anyone any mercy," he said, describing the detentions so far as just the tip of the iceberg.

Gulen, who has lived in self-imposed exile in Pennsylvania since 1999, has denied plotting against the state and has condemned the coup attempt, in which rogue soldiers commandeered fighter jets, helicopters and tanks, bombing parliament and seizing bridges in a bid to seize power.

More than 230 people were killed, excluding soldiers who were involved in the coup attempt. Many of the dead were civilians.

Before the failed coup, the Turkish authorities had already seized Islamic lender Bank Asya, taken over or closed several media companies and detained businessmen on allegations of funding the cleric's movement.

Although the bulk of the purges in the wake of the putsch have been in the security forces, judiciary and public sector, private firms have also been affected.

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The head of research at a brokerage had his license revoked over a report to investors analyzing the coup plot, while Turkish Airlines, arguably the country's most recognized brand, has fired 211 staff over alleged Hizmet links.

The chairman and several executives from Boydak Holding, a prominent family-run conglomerate with interests from furniture to energy, have also been detained, as has the chief of Turkey's biggest petrochemicals firm Petkim.

Turkey has meanwhile been pressing foreign governments to shut down Gulen-linked schools overseas. The Hizmet movement runs some 2,000 educational establishments in around 160 countries, from Afghanistan to the United States.

EUROPEAN CONCERN

The coup and its aftermath have strained Turkey's relations with the United States, which has said it will extradite Gulen only if Turkey provides evidence of his wrongdoing, and Europe, some of whose politicians have raised concern that Erdogan is using events to further tighten his grip on power.

Turkey's EU Affairs Minister on Thursday criticized comments by Austrian Chancellor Christian Kern suggesting talks on Turkey joining the European Union should be broken off, saying the EU's founding values remain a reference for Ankara.

Kern said on Wednesday he would start a discussion among European heads of government to quit talks on Turkish accession because of its democratic and economic deficits.

"It's disturbing that his statements are similar to those of the far right... Criticism is surely a democratic right but there has to be a difference between criticizing Turkey and being against Turkey," EU minister Omer Celik told reporters.

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A senior EU official involved in accession talks with Turkey said Kern's comments were "too early" and part of "the domestic debate" in Austria, where the far-right Freedom Party attracts around a third of votes in opinion polls. But he did not entirely dismiss them.

"The EU should not, obviously, pursue the road of ending the accession talks with Turkey, but we will have to if Turkey keeps sliding into semi-authoritarianism," the official said.

The purges of Gulen's suspected followers this week extended to the Scientific and Technological Research Council of Turkey (Tubitak), which saw its offices raided on Sunday, and have also included private and military hospitals.

Health Minister Recep Akdag said in an interview on state-run broadcaster TRT that his ministry had taken control of 36 institutions, including some private hospitals, that were temporarily shut after the coup and that military hospitals would now be under the supervision of his ministry.

Investors meanwhile worry that the scale of the crackdown could further weaken Turkey's institutions and threaten its investment grade status, particularly if they spread too widely to commercial firms and financial bodies.

Turkish officials dismiss such concerns, saying the depth of the crackdown is justified by the severity of the threat to the state and that the country is not short of qualified people to replace those who are purged.

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