The latest situation in the Greece crisis... - ÜNSAL BAN

The latest situation in the Greece crisis...

After the general elections, we entered a period which is very active with regards to the domestic markets. From the U.S. dollar rate to the interest rates and share market, the direction of the financial instrument and indicators can change any moment.

Behind the increasing volatility, there are the raised government scenarios; these things will take too much of our time, so let's hope for the best.

While we have been evaluating the political structure that will be shaped with the general election results inside Turkey, we again see that abroad the debt crisis of Greece has caught fire again.

As it is known, the Tsipras government, having difficulty in paying the debt, in order to solve the crisis, is continuing various negotiations with the EU authorities and creditors. Tsipras who could not meet the reforms imposed by the EU because of the promises he gave before the election, has no alternative other than creditors.

For the release of the credit of 7.2 billion euros remaining in the current financial program, by the end of June, Greece has to reach an agreement with the creditors one way or another. Otherwise, Greece's current shortage of cash will not be able to fulfill its commitment to pay its debt back to IMF and will face a sovereign default.

Against such a risk, we see that Greek authorities are knocking at the door of the creditors with a new budget plan and reform package.

The EU authorities find the new reform draft that Greece presented to the international creditors insufficient for an agreement to provide cash flow to Athens.

This means that the debt crisis Greece is in could not be resolved yet.

How could the deadlock in the debt crisis result?

Not approaching to the reconciliation, on the other hand requesting a deduction in the debts and an extension for the payment term, Greece's job is not as easy as it was in 2012.

In fact, in the deduction in 2012, the party Greece was indebted to turned out to be private investment companies. It is observed that today the party it is indebted to is the other countries.

Since the related countries do not have a positive look on erasing the debts, a solution cannot be reached.

Each day the risk for sovereign default is increasing for Greece that has a total of 313 billion euros ( 336 billion US dollars)

We see that the possibility of Greece's separation from the Euro Zone has already taken its place among the scenarios.

It is seen that various credit rating agencies which are aware of such a possibility downgraded Greece's currently very risky credit rating from the CCC+ level to CCC.

Besides this, we need to determine that with regards to the EU, the problems will not come to an end with Greece's separation from the Euro Zone.

In fact, in case Greece separates from the Euro Zone, we see that with regards to the Euro Zone the beginning of the disintegration is highly possible.

In this context, it should be taken into consideration that together with Greece's leaving the euro, the environment of uncertainty that will be formed will cause the deepening of the recession among the southern European countries, such as Portugal, Spain and Italy, and these countries will look for solutions similar to Greece's.

As a result, if Greece cannot have an agreement with the international creditors till the end of June, we see that it will not be possible for the country to get money either from the IMF, or the EU.

It is essential to point out that this situation will strengthen the possibility of Greece's leaving the Euro Zone and will cause new problems for the EU.


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