The histrionics haven’t worked. The arrogant strutting and bombast haven’t worked either. Neither has the name calling and claims that Greek “pride” was being wounded by creditors asking that the money they loaned to Greece be paid back.
All the tricks and gambits tried by the Greek government of Prime Minister Alex Tsipras that the far left is famous for have failed because they cannot alter reality to fit their narrative. These are not low information voters they’ve been trying to bamboozle over these last several months. These are hard eyed money men who have loaned Greece $260 billion over the last 4 years and, acting in the name of the taxpaying citizens of Europe, would like it returned with interest, please.
We’ll never know why Tsipras believed he could get the EU, the ECB, and the European Commission to go easy on the Greek government that blew into office in a landslide this past January. He thought he could remove the restraints on the Greek budget, raise spending 7%, tax the rich, nationalize industries, and most importantly, set up a new debt regime that basically delayed paying creditors for 50 years.
He claimed a continent wide mandate while being elected by a nation with barely 2% of the European population. Was he naive or delusional? Probably both.
But now, as Greek slides into chaos, Tsipras has made some additional proposals to the EU that he hopes will stave off disaster.
Greece requested a third bailout from the eurozone Tuesday in a last-ditch effort to secure a debt deal before its financial-crisis-era bailout expires and it defaults on a loan from the International Monetary Fund, one of its three international creditors.
The two-year deal, if accepted, would allow Athens a new bailout from the eurozone’s European Stability Mechanism, its $560 billion rescue fund.
As European finance ministers met Tuesday to discuss the proposal, thousands of Greeks took to the streets of Athens, many of them in support of accepting new bailout terms. A “no” vote would lead to Greece leaving the European Union and abandoning the euro currency.
Tweets from a variety of European finance ministers who were on the conference call indicated that as expected there would be no extension to Greece’s bailout plan, and that the ministers could also be meeting Wednesday to resume discussions around the details of the new bailout terms.
“#Eurogroups ends,” tweeted Finnish representative Alexander Stubb. “Letter of @tsipras_eu includes three requests. Extension of programme or haircut not possible…cont…”
The last-minute development comes as Greek Finance Minister Yanis Varoufakis said Tuesday that his country would not make a debt payment to the IMF by a midnight deadline, setting the stage for a showdown with its creditors ahead of a national referendum Sunday on its membership of the euro currency.
But despite the eleventh-hour overture, an imminent resolution to the crisis isn’t expected. German Chancellor Angela Merkel has repeatedly said there would be no decisions on a new Greek deal until that country’s vote Sunday. And Greek lawmakers have pointed out that once a referendum has been set there is no way to cancel the vote.
Greece is so sick that you have to wonder about the sanity of creditors if they were to contemplate giving Greece tens of billions of more euros. But insanity has been the hallmark of this crisis, so perhaps if there is a “yes” vote on the referendum next Sunday, Merkel, Hollande, and Juncker will swallow hard and try to sell a third bailout to the voters. Indeed, the case is going to be made that Greece must be kept in the bosom of the EU or the entire project will be lost.
If the EU goes that route, they will be playing right into the hands of Tsipras. He has been counting on the indispensability of Greece to the future of the EU, first to get him far more generous terms on debt repayment, and now another bailout.
But a “No” vote on Sunday would probably mean the end of negotiations. And in a twist of irony worthy of a classical Greek tragedy, if the Greeks vote “Yes” they may get a new bailout or financing, but it will almost certainly mean the end of Prime Minister Tsipras, who will almost certainly resign and call for new elections. If they vote “No” they will likely leave the EU but will be stuck with Tsipras in office.
A Hobson’s Choice to be sure.