A ‘logical’ scenario vs historical accidents (Greece)

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Alexis Papajelas (2)Mr. Alexis Papachelas is a guest editorial writer to The Business Thinker. He is currently the Executive Editor of the long standing and highly respected daily Greek newspaper “Kathimerini”.

The country has reached a point where there is only one “logical” scenario left. By now, Prime Minister Alexis Tsipras understands very well the meaning of bankruptcy, a credit event and a Grexit. He has heard it from responsible officials, both locally and abroad. He is clearly living a nightmare. He has European Central Bank chief Mario Draghi on one phone threatening to pull the Greek banks’ liquidity plug, while on another some official is informing him that the only available cash is destined for fuel supplies for the coast guard and the army. The moment of truth is nearing because the country is on the brink of becoming a failed state.

Tsipras is well aware of the fact that one of these days he will receive an e-mail in the form of an ultimatum. It will resemble an e-mail sent by former Finance Minister Gikas Hardouvelis, which was revealed by Kathimerini, minus about 20 to 25 percent of the proposed measures.

What could possibly make a difference in his case would be a pledge for a reduction of Greece’s sovereign debt. This agreement plan has been the object of secret negotiations over the last few weeks. As soon as the Greek government receives it, the confrontation will begin on the local level. Of course opinion polls show that Greeks would prefer a “bloody” deal with the country remaining in the eurozone, as opposed to a return to the drachma.

The core of leftist SYRIZA, along with others, will react strongly. But at the same time, time will be running out, the consequences of failing to pay back the International Monetary Fund will be visible, as will the closure of local lenders. Tsipras will gather his parliamentary group and read the e-mail to them. Finance Minister Yanis Varoufakis is poised to play the role of Iphigenia, which befits all finance ministers during times of crisis. He will defend the deal by saying that “this is as far as the negotiations go.” What comes next is voting and crunch time. How many will be able to withstand SYRIZA’s and the coalition’s first memorandum crisis? How many will jump ship? If these are more than five or 10, Tsipras will only have one option: to call early elections without the backing of dissenters. He could pass the multi-bill with votes coming from New Democracy, PASOK and Potami, but being afraid that this would tarnish him politically, he would choose to go to the ballot.

This is a very positive scenario for all those who don’t wish to see Greece experience bankruptcy and a return to the drachma. In many respects it’s a “logical” scenario. But given that the election of a president and avoiding snap elections was also considered “logical” back in December last year, it’s best not to anticipate that this is what is going to happen. In Greece, history has not always followed a linear, “logical” course – on the contrary, it has been full of accidents.

This commentary has also been published in ekathimerini.com today

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