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.