The final Greek bailout talks at Luxembourg have fallen through, and the EU will convene an emergency meetings of the eurozone heads of state in Brussels on Monday in response. The Financial Times quotes the president of the European Council, Donald Tusk, as saying “it is time to urgently discuss the situation of Greece at the highest political level.”
As Walter Russell Mead wrote this morning, “the long running Greek crisis appears to be heading toward some kind of major turning point, and I don’t mean that in a good way.” This is what that turning point looks like. While technically the Greeks have until the end of the month to repay the IMF €1.5bn and reach a bailout extension agreement, today’s meetings were widely regarded as the last chance to get a deal done in time to be fleshed out in detail, written up, and signed before the deadline.
To make matters worse, there’s no sign that the final moment of crisis, now that it has arrived, has produced or will produce a last minute course correction from the Greek leaders. (In fact, in a moment of what would be high comedy if the happiness of millions weren’t on the line, Greek PM Alexis Tsirpas apparently told French President Francois Hollande recently that Mrs. Tsirpas would leave him if he caved to Greece’s creditors).
So what’s next? Earlier this week, the FT ran a useful timeline of how things might play out that’s probably worth a look. If things go poorly on Monday, we are officially in uncharted territory, with capital controls being imposed and a slow-motion asphyxiation of the Greek economy a likely outcome. It’s important to note, however, that if we do get there, there’s no easy going back. Greece may not ultimately default, nor will it necessarily leave the euro even then. But returning to the exact status quo ante becomes next to impossible.
Since the beginning of the Greek debt negotiations, we’ve been using the supertitle “Beware of Greeks Bearing Gifts” for posts about it. (The supertitle is the little red tag line above the posts’s main headline.) A reference to the Trojan War, it was meant in part to convey a sense of the serious, if often unequal, struggle for the future of Greece (and the euro writ large.) If things proceed as expected, we may well have to switch to a tragic, rather than epic, reference. Perhaps to The Trojan Women—a play set in the ashes of a sacked Troy, where nothing remains of the struggle but the sufferings of the innocents.