Greek negotiating tactics are vacillating between “playing chicken” and bad faith

Another negotiating session ended in failure yesterday – after just 45 minutes. The Greek delegation were the visitors in Brussels. In any negotiation, the home side always has the “time” advantage in that that they can go as slow as they like. To neutralise this home advantage, a visiting side in a negotiation always needs to show more patience and always give the impression that they can sit there for ever. For a negotiating session to end in just 45 minutes would need the “visiting” delegation to actually walk away. And if the Greeks did walk away then it would seem that they are either playing a dangerous game of chicken or else that they are negotiating in “bad faith” with no intention of reaching a settlement. If the latter then they are just waiting for an opportune time – for domestic consumption – to bring this to an end and initiate a Grexit. If the former then they are waiting for a Grexit to appear inevitable such that they get some “final” concessions.

My own view is that any settlement now with Greece will only be a temporary fix – and the sins of past Greek profligacy will not have been fundamentally atoned for. The pension system that the Greeks awarded themselves are unsustainable even with the cuts implemented so far. A Greece forced to continue within the Eurozone will remain under debt pressure for a decade. Tourism will be constrained. No Icelandic type of recovery would be possible. Far better to bite the bullet now, allow a Grexit and begin to limit and later shrink the Eurozone. Both Greece and the Eurozone will eventually benefit.


Greece enters what could be a defining week after last-ditch negotiations between representatives of the Greek government and its creditors collapsed on Sunday.

The euro dropped as the European Commission said the talks in Brussels had broken up after just 45 minutes with the divide between what creditors asked of Greece and what its government was prepared to do unbridged. The focus now shifts to a June 18 meeting in Luxembourg of euro-area finance ministers, known collectively as the Eurogroup, that may become a make-or-break session deciding Greece’s ability to avert default and its continued membership in the 19-nation euro area. …..

……. “The shadow of a Greek exit from the euro zone is becoming increasingly perceptible,” German Vice Chancellor and Economy Minister Sigmar Gabriel wrote in an op-ed to be published in Bild on Monday. “Greece’s game theorists are gambling the future of their country. And Europe’s too.”


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