I will continue to write about the Greek issue, which is essential in determining the future of the EU. Before anything else, the overwhelming "no" vote that emerged from Sunday's referendum is very meaningful. I would like to look at the remarks of Greek Finance Minister Yanis Varoufakis, who stepped down soon after the referendum results were announced. In response to German Finance Minister Wolfgang Schaeuble's statement that Varoufakis lost the trust of the German government, he said, "I have told him that I never had it. I have the trust of the Greek people." Actually, Varoufakis has turned out to be right, as the referendum did not produce the results that were imposed and desired by Germany, but in line with the Greek people's interests. This result is a major development both for Greece and countries like Greece. For me, the Greek referendum has opened two major issues up for discussion. First, the neo-liberal impoverishing policies, which the IMF has imposed on developing countries since the 1970s as a Bretton-Woods institution, have come to an end. It is no longer possible to officially foist these policies on developing countries by the hands of IMF and similar institutions. The second question of debate is Germany's economic and political leadership in Europe. The Greek referendum is the second defeat sustained by Germany, considering that small EU countries did not approve the draft European constitution in the referenda that they held between 2005 and 2007. Indeed, this was an objection to Germany's impositions. This time, Greek people said a strong "no" to economic policies imposed by Germany. I think this result has ushered in a new period both for EU countries and developing countries.
In the long run, referendum results will bring a de-facto end to the monetary system that started with the Bretton-Woods Agreement in 1944. This system was primarily based on the dollar and it was based on the euro-dollar pair after 2000. At present, it is highly likely that Greece will separate from the eurozone, and this is actually what Greek people said 'yes' to. Greece's return to the drachma does not only mean Greece's exit from the eurozone, but also the dissolution of the monetary union of the euro. At this juncture, I need to ask two questions: First, what will replace the euro in the short run as a currency that has weakened and de facto ceased to be a reserve currency? Second, is the dollar powerful enough to fill this gap? To begin with the latter question, under the current circumstances of the United States economy, the dollar cannot continue to be the basic reserve currency of the world economy on its own and as it is used to be. The U.S. cannot clear up its problems of foreign trade deficit, deficit spending and saving-investment gap by printing money. This is because the U.S. is losing its political power as Asian countries are increasingly pursuing policies that are independent from the West. This being the case, the dollar demand of countries like China, which have foreign trade surpluses, becomes unnecessary. Quite the contrary, with China making the yuan a reserve currency, Asia -Pacific countries, Latin American countries and developing countries that are outside of the eurozone will reduce their dollar reserves and dollar demand. Moreover, trade between these countries will be carried out through their local currency swaps that will come along with free trade agreements and local currency swap areas will emerge. For instance, in the case that Greece switches to the drachma, Turkey can issue credit for Greece in the Turkish lira for its imports from Turkey, forming a new de facto trade cycle in the Turkish lira between the two countries. This trade cycle can continue through a strong local currency like the Turkish lira and accept the yuan as a basic reserve currency. Energy exporting countries such as Russia and Iran can also join this trade cycle. This obviously means the de facto end of the Bretton-Woods system. For instance, the trade, which takes the yuan as a basic reserve currency and runs with local currencies, can form a de-facto TL-zone. This might lead to a great number of bilateral trade agreements between developing countries.
Greece's return to the drachma tells us that the local currency clearing system will start from Eastern Europe, pass through Turkey and reach the Caucasus. For instance, small Balkan countries will not demand euros and dollars as they used to in order to purchase the Caspian natural gas that flows through Russia or Turkey through the Southern Gas Corridor (SGC). In the first phase of the local currency clearing system, trade can be conducted with local currencies and eventually central banks can regulate a final accounting balance with the yuan as a basic reserve currency. Here is the answer to the first question asked above: In the first phase, strong local currencies will replace the euro as a currency that has de facto ceased to be a reserve currency. In the second phase, the yuan will be introduced to ensure the final accounting balance. As can be seen, the Greek issue is a perfect case that can be discussed and on which alternative economics, and even a new world can be built. Greek people said "the emperor has no clothes" and the spell was broken.