Observers say the Turkish prime minister's threats over the media's coverage of the recent political crisis is adding to growing questions about what direction the country is heading.
The financial fallout from Turkey's latest political crisis was the catalyst that resulted in Prime Minister Recep Tayyip Erdogan launching his attacks against the media.
Turkish markets were weakened by days of tension between the government and the secularist military for their role in an alleged military plot against the Islamic-rooted administration.
The market at one point fell 6.5 percent as shareholders moved their investments to what they perceived as safer economic waters.
Addressing his party, the prime minister pinned the blame on the media for fanning the flames of financial fears.
"Nobody has a right to increase tension in this country," he said. "I cannot let such newspaper articles upset financial balances. No one has the right to turn a country's economy on its head. We won't allow it. Please, everyone should be aware of their limits. Don't say tomorrow you haven't been warned."
Threats by the prime minister aren't taken lightly by the media.
The country's largest media organization, Dogan Media Group, is facing a multibillion-dollar fine and bankruptcy for non-payment of taxes. The fine came after the group's newspapers published corruption allegations against the government in connection with the defrauding of a German-based charity.
"It is a pattern, it is a pressure, it is a strong pressure on us," said News Editor Mehmet Ali Birand. "Therefore I fear, I fear the situation."
Such concerns are shared by the European Union. The prime minister's latest outburst has led many EU diplomats in Ankara to voice fears about his increasingly aggressive stance towards the media. The EU in its latest progress report on Turkey's accession progress expressed reservations over the state of press freedom in the country.
Richard Howitt is a member of the European Parliament's committee on Turkey.
"I still really worry about freedom of expression, and part of Turkey conforming to European values, is to relax and to become much more confident in allowing dissident and opposing political views. However offensive they may be, it is part of being a modern European democratic pluralistic country and that's a lesson I still think we have got long way to go in Turkey itself," said Howitt.
Parallels are being drawn between the current controversy and the leadership of former Turkish prime minister Adnan Menderes. Elected in 1950, Manderes was ousted from power in a 1960 coup by the Turkish military and later hanged. Professor of media studies at Bilgi University, Haluk Sahin, says history might be repeating itself.
"We've gone from a similar situation in the past, when Adnan Menderes was emerging as a strong man you might even say," explained Sahin. "He engaged in similar policies to silence the press. Of course this was very bad for Turkish democracy and created a great deal of tension in the country."
The strong criticism of the prime minister from much of the media, including some newspapers that are generally supportive of the government, seemed to have pressured Mr. Erdogan to backtrack. Addressing his parliamentary deputies on Tuesday, he said he had been misunderstood and that he would never threaten the country's media.
Besides its problems with the military, the government is also locked in a battle with the judiciary as it gets ready later this month to introduce judicial reforms. Political columnist Nuray Mert says the country is heading in a dangerous direction.
"Totally against any kind of criticism, they are employing all sorts of pressures on media, directly and indirectly," said Mert. "In this picture I can't see any hope better or more advanced democracy at the end of this struggle. But rather there are prospects, of replacement of one kind of authoritarian political culture with another."
The government refutes such accusations saying it is committed to democratizing Turkey as part of its bid to join the EU. It claims its latest reforms to the judiciary are in line with EU membership requirements. But observers say despite such claims, the prime minister's latest outburst against the media is highlighting how its lingering domestic divisions will reflect on its future relationship with Europe.