The last 48 hours for the “system” in Greece

Greece, having a small share in the total macro size of the European Union, turned into a pile of troubles more complicated than expected with regards to the history of the European Union after the “no” decision, as a result of the referendum on Sunday, July 5. The pioneer experts of the European Union, the economists, analysts of the prestigious finance institutions of the world, respectable academicians, none of them, including those of a certain age, have an idea about how Greece will prevent bankruptcy, where Greece and the creditors will agree on the new economic recovery package, and whether Greece be able to hang on in the Eurozone.

The Greece issue is such a question of debate in the international economic circles that even the Far Eastern and the US exchanges are affected. Of course, this part makes me smile a lot. Because, I find the Greece crisis quite a “force” to affect the Asian and American exchanges.

Meanwhile, the scenarios of the coalition to form the 63rd government in Turkey, the increasing activities and heat on the Syrian border, even the priority issues of Turkey are overshadowed by the “Greece” headline.

It was being said that while we were writing these lines, the Prime Minister of Greece, Tsipras, was making the last touch up in order to give a new proposal package for the meeting which would be held in Brussels where the leaders of the Eurozone countries would come together while you will be reading these lines.

If these things heard don't come true and there is no hope for an agreement, it is said that the economic system in Greece will completely collapse after 48 hours.

Actually, Tsipras who came out victorious after the referendum, contrary to popular belief, now with a reasonable step back, by making a concession, will make it easier to reach an agreement with the creditors. However, the German Chancellor Merkel and French President Hollande coming together both on Monday and yesterday preferred to give a message with a lenient tone. Merkel, besides reporting that time was running out for Greece, repeated that the door for negotiation was open.

However, Hollande, stating that they respected the referendum results, said, “The doors are open to negotiate with Greece.” Even if some EU leaders play the “bad cop”, with the efforts of France which always protects Greece, while you are reading these lines, perhaps a positive progress will be taken between the EU leaders and Greece.

With positive development, parity is again USD 1.10 -1.14.

Before estimating what would come out of the leaders' summit yesterday, in the moments while we were writing these lines, the euro against the US dollar was below 1.10 dollars. As you know, when the US dollar got stronger against the euro, when the euro was even 1.05 dollars below the US dollar, the America's imports lost speed, whereas the importation of initially Germany and the Eurozone countries gained speed.

Since the US authorities, even President Obama, stated that they were not happy that the dollar lost value, the parity declined to the 1.10-1.14 dollar band .

On Sunday, July 5, after the referendum in Greece resulted with “no”, the parity was again below 1.10 dollars.

For the Turkish importers and the tourism professionals, the parity is to be between 1.10-1.14 dollars, and even the evaluation of the euro is very important.

That's why, if a “positive” picture emerges at the negotiation point with Greece after the summit of the Eurozone leaders in Brussels, the parity will again be above 1.10 dollars.

But, the moments we were writing these lines, the dollar index closed the trading day in the same level with 96.30 points just as the first trading day of the week and also yesterday morning was observing trading with 96.30 points.

But, toward the leaders' summit the dollar index rose up to 97 points and in this situation the euro declined below 1.10 dollars. In that case, if a happy picture emerges after the leaders' summit, parity will be again within the 1.10-1.14 dollar band; to the contrary, if the leaders' summit ends with a high tension and, as a result of this, if the dollar index declines below 97.72 and 98.12 points, unfortunately the euro can again come back to the 1.08-1.04 dollar band against the dollar.

Greek economic system can collapse

While writing these lines, another piece of breaking news came. It was learned that Tsakalotos, who took over the duty from the former finance minister Varoufakis who resigned on Monday and was declared “persona non grata” because of his hard-line during the negotiations before the referendum, didn't give a new proposal to the finance ministers of the Eurozone (Eurogroup). In this case, the eyes are on the Greek Prime Minister Tsipras. According to the information the international news agencies collected, it is in the agenda to publish a decree that will provide keeping the Greek banks closed a few days more.

In case the European Central Bank doesn't increase the limit of the “Emergency Liquidity Assistance” (ELA), it is reported that the troubles of the Greek banks which have been closed since June 29 will continue. The Greek Economy Minister announced that the deposits of the banks will be enough for only a few more days, and according to an anonymous bank executive, if there is no agreement, all the country's credit system can collapse.

We will see whether this issue will come to an end at the “headquarters”.