Empty threats

I may have limited knowledge about the art of bargaining, but this whole thing with Greece’s endless bluffing certainly seems to have gone too far.

The leftist-led government was right to flash the Russia card, which seemed to raise some concern in Washington and Berlin. One could say that Athens pushed things as far as it could without severing the country’s fundamental ties with Europe.

Things got out of control after certain Greek officials said that the country would receive a five-billion-euro deposit for the construction of the new pipeline, which could probably also solve its immediate funding problem. People who knew a thing or two about pipelines and so on said that the scenario was a nonstarter.

Was it a case of strategic bluffing? Perhaps. But it failed to convince Western governments and it may even have irked some officials in Moscow, which does not like to be used in third countries’ bargaining games.

Then there is the endless speculation about a possible referendum or early elections. Every now and then a government official will utter some comment, yet the ultimate objective behind all that remains unclear. In the end, even German Finance Minister Wolfgang Schaeuble said in public that holding a referendum may actually be a good idea. No one is really afraid of the idea anymore.

Then came the supposed threat that Greece will not pay its IMF installment. That worried some but it did not unlock funding for Greece. Most important, Athens made the payment on time, which created the impression that it was bluffing again.

I don’t mean to say that next time we should follow through with our threats. What I am saying, rather, is that the habit of nonstop empty threats is taking a toll on the government’s bargaining power while also cultivating a cynicism among people on the receiving end who say: “They are no different from the others. They too will compromise in the end.”

Greece will reach an interim agreement with its lenders and the country will not default in the coming weeks, that is unless someone commits a serious blunder or SYRIZA proves unable to handle the pressure. Even with regard to the key agreement on the next aid package, there is room for a pragmatic, compromise solution. Dramatizing the negotiations is understandable to some extent so that any final agreement will come to be seen as an unavoidable conclusion. Given the current mood, any agreement will be met with a true sense of relief. Until then, empty threats should be avoided.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.