A week ago the Turkish lira was trading at TL 5.30 to the dollar. On Monday it was trading down nearly 40 percent in five days, at a peak of TL 7.2 to the dollar. As of this writing yesterday around 5 p.m., the lira is trading at TL 6.04 to the dollar, meaning the Turkish currency "crisis" may end before it actually becomes a full-blown crisis. The Central Bank of Turkey took important steps to curb speculation in the lira and was joined by the Turkish government in bolstering the embattled currency in order to stop what was thought of – until now – as an unstoppable decline.

With the release of two Greek soldiers that were being held for illegally crossing the Turkish-Greece border and the honorary head of Amnesty International in Turkey, Taner Kilic, Turkey has given the EU a massive wink and nod. While the latter was charged with aiding and abetting a terror organization, he was released yesterday with charges dropped following a January hearing that paved the way for this release. Whether or not the government forced prosecutors to speed up his release under pressure from German Chancellor Angela Merkel is unclear, what is clear however is that this is a win-win situation for both the EU and Turkey. President Recep Tayyip Erdoğan and Chancellor Merkel spoke immediately following the release and point to a sudden thaw in relations between the two countries in response to U.S President Donald Trump's tariffs on both countries. The lowering of tensions with European neighbors couldn't come at a better time for Turkey as both realize a prolonged Turkish financial crisis would be disastrous for both.

Contagion is the word on the lips of economists the world over as markets fear fallout from Turkey's crisis could cause a domino-effect ending with the collapse of emerging markets and a bloodletting in Europe's already fragile economies. European countries such as Spain, Italy, Poland, Hungary and Bulgaria are both heavily invested in Turkish debt and equity markets and also have significant stakes in the banking industry in Turkey. The European Central Bank's (ECB) largest underwriter, Germany, has the most at stake and may already be lending Turkey a hand in its escape from this quagmire. Merkel's call yesterday and her earlier comments about Turkey's economic success being in Germany's best interest only further views that the ECB is actively bailing Turkey out.

With an economy five times that of Greece, a Turkish economic collapse would be five times as bad as the Greek crisis which nearly crippled Europe for the better part of two years.

With the German Finance Minister slated to meet his Turkish counterpart Berat Albayrak in the coming days the European Union led by Germany appears to be stepping in to put the kibosh on any further devaluing the lira might face. This will mean a speedy recovery of the currency to stable labels. Following the November elections in the U.S., the Trump administration will have little use to win political points at Turkey's expense and pre-crisis levels may be reached in the domestic currency.