Let's look at the systemic crisis, not the Greek crisis

Published 26.06.2015 19:52
Updated 27.06.2015 10:52

The European crisis has gone back to square one, in other words, it has been turned into a Greek crisis once again. This, beyond any doubt, is an artificially created perception, since there is no Greek crisis contrary to what is claimed. However, there is a eurozone crisis fomented by Germany. As I mentioned in my previous piece, the debt of Greece is indeed the internal debt of the EU. If the EU is a union in the full sense, it has to acknowledge this reality and approach the Greek issue accordingly. The Greek Prime Minister Alexis Tsipras said, "They do not want to reconcile with us. This tells us that they have different plans." I think Tsipras was right in his statement, since the primary objective is to completely bring Greece to its knees and to force a leftist government to practice ruthless neoliberal policies. The EU does not aim to collect Greece's debt and end the crisis, quite the contrary, it strives to make the Greek people believe that Greece will recover thanks to neoliberal policies, and turn the Greek example into a basic case that can be practiced in all countries. Here, the intention is to impose the choice of a single economic policy to all EU countries. Now, the Syriza government will jump through hoops; either it will give into these vultures, or it will act in line with the popular support it received in the elections. In this regard, the Greek example is an important experience not only for Greece itself, but also for the entirety of the EU.

Meanwhile, very interesting developments are taking place on the other side of the world. Russia and China are developing a silent but deep alliance against the U.S.'s economic hegemony. The trade volume between the U.S. and China is expected to reach $100 billion by the end of this year and to double by 2020. Russia and China are creating a new trade cycle both on new trade routes (the New Silk Road) and new energy lines. At this juncture, the fact that Russian banks borrow heavily from China on a yuan basis is a striking development. On the other hand, Russian energy companies opt for trade that is carried out with the yuan and the ruble, rather than with the dollar. Russia will soon receive yuan-denominated bonds that will be issued by China and it is known that the Central Bank of Russia works to this end. China is very willing and assertive about including the yuan in the Special Drawing Basket (SDR) and is turning it into a preferable reserve currency, which I think will further escalate the eurozone crisis. The EU-induced debt ratio will drop and the EU will face a new euro crisis this time. Today, central banks in the world keep a euro reserve of 22 percent and this will be rapidly replaced by the yuan. This occurrence will not only unsettle the state of the euro, but also the state of the dollar as a reserve currency.

All these developments tell us that we are coming to the end of the Bretton Woods system-based monetary system, the foundations of which were laid after World War II. In parallel with this, developing countries will form a new economic cycle and trade network by rapidly increasing free trade agreements and monetary unions that they will launch among themselves. This, beyond any doubt, means a new economic and financial order. So, we should know that the phenomenon that is narrated to us as a Greek crisis is actually a systemic crisis.

Share on Facebook Share on Twitter
Disclaimer: All rights of the published column/article are reserved by Turkuvaz Media Group. The entire column/article cannot be used without special permission even if the source is shown.
However, quoted column/article can be partly used by providing an active link to the quoted news. Please click for details..