Finance Minister Yanis Varoufakis said Greece won’t seek an extension of its bailout agreement and will not cooperate with Troika on this. He is open to cooperation with the international institutions and EU member states, though, and PM Alexis Tsipras claims that teh will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole. But it all seems as a risky move and it looks like we are in the game who blinks first. So would you say this is a good strategy for Greece, or maybe not, and why? Read few comments.
Nikolaos Zahariadis, Professor, Department of Government, University of Alabama at Birmingham
It is a risky move indeed. I am not sure why he said it. I actually saw the video of this conversation and was surprised in addition to Mr. Dijsselbloem in whose presence he was speaking. It seems like a game of chicken (hence whoever blinks first loses). I understand Greece has until February 28 to ask for an extension, otherwise the bailout is over.
I personally don’t think it’s a good strategy because it forces things to happen knowing full well there will probably be adverse consequences. The only thing I can think of is that he is upping the ante to make the creditors think twice about their own possible losses. In fairness, he did say the government wishes to talk only to European institutions (the term he used was “institutionalized European institutions” meaning those which already exist in treaties), such as the Commission, he specifically mentioned it as an example. Of course, the Commission is part of the troika so I don’t understand what is his logic, other than to score a victory in public and then discuss with the “same guys” in a different forum, so he can declare the troika and the memorandum are over. It sounds more like a statement strictly for domestic consumption as it is something Greek voters dearly wish.
I can see how it will interpreted at home (in Greece). I don’t know whether outsiders (the creditors) will take it as “let me score this victory and we can then talk in private.”
Ángel Ubide, Senior Fellow, The Peterson Institute for International Economics, is Co-director of Global Economics for the D. E. Shaw Group
Not cooperating with Europe is a strategy that will be harmful for the Greek people. There have been many mistakes on both sides, Greece and the Troika, but that is the past. A good future for the Greek people requires an understanding between Europe and Greece, and there is plenty of room to find an understanding that allows both parties to be satisfied. Confrontation is part of the negotiation process, but the longer it last the more negative it will be for everybody. Read also by blog on this.
Alexander Apostolides, Lecturer of Economics and Economic History, European University of Cyprus
Not as risky as you think. The Hellenic Financial Stability Fund had 7.8 bn that they could expropriated, but also the HFSF is bonds of the EFSF so not very easy to turn into cash. What the Greeks are missing is that they will lose due to their banks. The bank run is far too big, making banks sooner rather than later insolvent.
Dimitris Tsarouhas, Assistant Professor, Department of International Relations, Bilkent University
I am not sure this is a “who will blink first” game. The new Greek government has said that they do will cooperate with the ECB, the Commission and the IMF. Where they draw a line is in the continuation of the current programme, which meant that the Troika comes over at regular intervals to supervise the programme’s implementation.
The negotiations is starting just now, and the government is attempting to build alliances with sympathetic (i.e. Socialist or social democratic) governments. They also want to get institutions such as the Commission on their side. If they will succeed remains unknown. They aim at a package deal and will place debt reduction in that package – it is unlikely they will get all they are aiming at; but a negotiation is always a give and take process.