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On the European Stage
Greek Histrionics After EU Summit

Germany’s Angela Merkel was on a hot streak. At this week’s EU summit, she had managed to secure an agreement (in principle) to extend sanctions against Russia through the end of 2015 at the next European meeting in June, over the reservations of countries such as Cyprus, Greece, Italy, Hungary, Slovakia, Austria, and Spain.

Even more importantly, she had managed to hold a unified line against the pleadings of Greece’s Alexis Tsipras, whose government was running out of cash fast, and who was asking for an advance on the €7.2 billion bailout fund earmarked for his country. Everything looked like it was going according to plan. Tsipras had grudgingly (but, reportedly, amicably) agreed to follow through on the provisions agreed to on February 20, even signing on to a joint statement referring to a “spirit of mutual trust.”

Hours later, however, things had gotten very hostile again. The Financial Times reports:

Angela Merkel, the German chancellor, made clear at a post-summit news conference that the starting point for Alexis Tsipras, Greek prime minister, was a December 10 inventory of incomplete reforms promised by the previous Greek government. “The Greek government has the opportunity to pick individual reforms that are still outstanding as of 10 December and replace them with other reforms if they . . . have the same effect,” Ms Merkel said.

It is a potentially incendiary demand since the document Ms Merkel referred to — a letter written by Greece’s then centre-right prime minister Antonis Samaras and his finance minister Gikas Hardouvelis — was the focus of particular scorn for Mr Tsipras’s far-left Syriza party on the campaign trail.

Mr Tsipras insisted at his own press conference that Ms Merkel was mistaken. “Forget the commitment of the former government. There are no austerity measures. There is no letter of Hardouvelis,” Mr Tsipras argued. “I asked [the other leaders]: do you expect me to . . . go through this evaluation and implement measures that Mr Samaras was not able to implement? The answer was no.”

The essence of hostage-taking is that you have to be willing to kill the hostage if your demands are not met. Last time, the Greeks were making gestures at leaving the euro if they didn’t get their way. The EU called their bluff, and the Greek government climbed down with egg on its face. After you don’t follow through when your bluff is called, of course, future attempts to pull the exact same stunt lose much of their effectiveness. That the Greeks were grandstanding almost exactly like this a month ago to the day adds an especially surreal aspect to today’s happenings.

The only thing that’s certain at this point is that what happens next is uncertain—and making predictions would be a fool’s errand.

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  • Jacksonian_Libertarian

    The Greeks should leave the Euro and the EU, their economy just isn’t viable without a depreciated currency.

    • Pete

      If the Greeks leave the EU, they’ll drop to near Third World conditions. And they know it.

      • gabrielsyme


      • Corlyss

        “Greece is a country where if you take away the corruption, you destroy the social fabric of the entire nation. It’s a banana republic which for a short time had a AAA rating because of the euro.” -David Goldman aka “Schumpeter.”

        Greece is already a 3rd world country. Germany will do whatever it must to maintain the export structure of its economy.

        • f1b0nacc1

          That’s “Spengler”, not “Schumpeter”….though in all honesty I like Schumpeter better….

          • Corlyss

            Dang! You’re right! And I had the book right there! Consequences of late night posting.

          • f1b0nacc1

            Hey, I cannot be wrong every time!
            And remember, we DC alum need to watch out for each other….

          • Corlyss


        • Curious Mayhem

          David Goldman is “Spengler.” Schumpter, Spengler, tomayto, tomahto … Greece is bankrupt and can’t function without euro = 75c or so.

          • Corlyss

            Let’s call the whole thing off . . .
            At one point, Goldman was saying that Greece couldn’t function without the euro be steady at $1.25. Today it’s $1.08-ish.

          • Curious Mayhem

            I think Greece needs about 50-80c. Even $1 is too much. And it does nothing to reduce their old debt.

      • f1b0nacc1

        They will experience losses (“third world conditions” is a bit extreme), and then they will produce more efficiently (the currency change will help here), clear up their debt situation (also helped by a currency change), or (if they don’t make any meaningful changes) continue to decline.
        Greek society is astonishingly corrupt, even in comparison to most other Medsates…why should the rest of the EU be compelled to shield them from the consequences of this?

      • Curious Mayhem

        They’re most of the way there already.

    • Ofer Imanuel

      The Greek people don’t want to leave the Euro. The Greek government may want to, but they will never get re-elected if they do leave.

      • Corlyss

        Why would they want to? They keep getting money now. Once they’re out of the EU, Russia need not pony up the money. They can just put in the Marxist government I’m sure they have mapped out already.

        “they will never get re-elected if they do leave.”

        There’s the rub that has flummoxed all of the EU governments since 2008: “We know what needs to be done. We just don’t know how to get re-elected if we do it.”

  • gabrielsyme

    While it is certainly clear that Greece has very constrained options, it is also shocking to see the anti-democratic implications of the Euro so brazenly worked out. Elections and governments come and go and the prescribed policy remains the same, with almost no room for variation.

    Even leaving aside the baleful economic consequences for Greece remaining within the Euro, it is becoming clear that if Greece wishes to preserve anything more than nominal sovereignty and the facade of democracy, it must exit the Euro.

    • Corlyss

      “anti-democratic implications”
      The divorce of the polities of member nations from the government that controls their daily lives has always been apparent in the EU. Why is only now that so many are noticing it? It never was hidden.

      • Josephbleau

        True, Ireland knows that if you don’t vote properly Brussels will make you keep voting until you get the right answer.

  • Curious Mayhem

    What bluff? Greece needs to leave the euro, now.

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