Sunday, February 8, 2015

Greece: "Bridge Agreement" versus "Extension"

This evening, I watched a discussion about Greece on Austrian TV. The focus was on today's speech in parliament by Alexis Tsipras. The participants were not senior level but all possible views were represented. There were two key players: an Austrian economist who, in terms of mindset, could be a twin brother of Yanis Varoufakis and a German MEP who, in terms of mindset, could be a niece of Angela Merkel.

The twin brother carried the evening. He displayed a broken heart when lamenting that the EU, which normally gives a new government a friendly reception, had given the new Greek government an ice cold reception (he had apparently forgotten the reception which the new Austrian government received from the EU back in 1999 when the conservative party made a coalition which a socalled populist-right party which, compared to the Greek ANEL, was actually rather center). The niece interjected that this should not have come as a surprise to anyone after the SYRIZA leaders had offended just about everyone in the EU leadership during the election campaign. The twin brother said that this was a petty way of looking at things and my guess is that many viewers agreed with him.

The major - and very convincing! - argument of the twin brother was that it was only fair of the new government to request a bit more time, a bit of breathing space to prepare, present and negotiate their own plans in detail. "Is that really asking so much when one asks only for another 3 months of time?", the twin brother asked. I would guess that 99%+ of the viewers agreed with him.

Strangely, no participant nor the discussion moderator asked the key question: if all SYRIZA wants and needs is more time, why don't they simply request an extension from February 28 to May 31? The EU has already signalled that they would even agree to a longer extension than that.

Of course, SYRIZA's response would be that by requesting that extension, they would formally acknowledge and perhaps even accept an agreement which they reject outright. Formally, that is a correct argument but is this a time to talk about formalities? Aren't there situations where the end justifies the means? If SYRIZA can negotiate by May 31 all the things they want to have, no one will fault them for having formally and temporarily become party to an agreement which they were then able to negotiate away.


  1. Obama is moving... Fear not... The solution will be "neutral".

  2. Sounded like a nice program. Thank you for sharing.


  3. But the Eurozone does not operate in a vacuum, and this is where America comes in. Greece likely won’t default and leave the euro, and Syriza likely won’t come away empty handed. And that has nothing to do with economics. It has everything to do with geopolitics.
    If Syriza defaults, it may not be able to borrow in free financial markets, but it will still be able to borrow in places where the free market does not apply. Countries like China and Russia may bail out Greece in exchange for political favors. And if Syriza is willing to play the auctioneer, losing money on the deal may still be worth it if it buys Greece’s friendship. It’s no coincidence that immediately after Syriza won the election, Vladimir Putin invited Alexis Tsipiras, the victorious Syriza prime minister, to Moscow.
    There is a reason why Greece is in NATO, and there is a reason why Greece was the first country Harry Truman pointed to when he proposed the Marshall Plan. Greece, along with Turkey, occupies an excellent strategic position in Europe. Along with Turkey, it is positioned to control Russian access to the Mediterranean. And during the Cold War, it was one of America’s most important missile bases. Aside from that, the thought of a NATO member being beholden to a country outside of NATO is patently unacceptable.
    America will probably pressure Europe to accept a longer timeframe on Greek debt – in short, a refinancing. Both sides in the conflict will get to say that they got what they wanted – Greece will be able to lessen its austerity, and Europe will avoid writedowns on its debt. America may well have to give some concessions to Europe to make that happen. But I suppose that’s the price for being the leader of the free world.

  4. Greece is not able to ask for an extension because they cannot compromise, everything here is based on the slogans of, "no compromise, no surrender, freedom or death, rather poor than slave, the inalienable rights of the Greeks, Greeks will never carry any yoke". The stupid law about the +50 MP's to the winner was made because otherwise nothing would ever be decided. With that law things do get decided, but not with the consent of the majority. It is a "the winner takes it all" mentality, or a zero sum game, sometimes it's even a negative sum game. We live in exiting times.

  5. Is NATO and USA ready to lose half the eastern Med to Russia?

    Is Mrs. Merkel ready to see Russian vessels and aircrafts from the coasts of Lebanon up to the Adriatic Sea?

    After the cancellation of the South Stream, is Mrs. Merkel ready to see the first european tract of the ENTIRE european gas supply, come under russian influence?

    "Southern corridor promoted as alternative

    In the meantime, the Commission threw its weight behind the Southern gas corridor, a term referring to the project to bring 12 bcm/y of gas from the Shah Deniz offshore gas field in Azerbaijan, via the SCP (South Caucasus) pipeline crossing the territory of Azerbaijan and Georgia, the planned TANAP pipeline via Turkey and the planned TAP (Trans-Adriatic) pipeline via Greece and Albania and an offshore section to Italy."

    "Gazprom CEO Alexey Miller later added that Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey; and Russian Energy Minister Alexander Novak stated unequivocally, "the decision has been made."

    Is Obama ready to see 100% of the European gas supply, to pass through Turkey and then a Russian-dependent Greece?

    I think not!!!

    1. You forget that many Germans are interested in friendly relations with Russia/Putin rather than with the USA. Russian vessels in the Adriatic sea, why not?
      If little Greece becomes a Russian puppet state is not so important in that context, as long as you can go there for vacations. And if Greece becomes a little poorer after Tsipras interlude, so much better for tourism. Many middle class holiday-makers like a little romantic primitivism. Sea, sun and sand, what more do you need? With the drachma everything will become as cheap as in the sixties.
      Moreover, Obama has no money to give to Greece.

  6. The interesting thing with Tsipras' good fortune, aside that his "sworn enemy" (the US) is now his salvation, is he isn't the only one to commit hubris. Several involved parties commited it. But they hadn't realized it, up until Tsipras' rise to power.