Expensive lessons
Let’s take a look at the best-case scenario in the talks between Greece and its creditors. We know more or less what to expect: lower primary surplus targets that will be facilitated by an extension of maturities. I am almost certain that Prime Minister Alexis Tsipras could have achieved this concession a year ago, without the referendum, the capital controls and all the other ordeals the country has gone through. Europe’s big powers wanted an honorable compromise with the then-new leftist government and were willing to agree to such terms. Tsipras’s conservative predecessor, Antonis Samaras, did not get the same concessions – not when he achieved a primary surplus nor when the last bailout review should have been wrapped up.
It goes without saying that the above concessions would have been accompanied by all the decorative changes that followed: The troika would still have been referred to as the “institutions” and its representatives would hold their meetings at the Hilton Hotel rather than at the Finance Ministry.
Tsipras, moreover, knew that he could have achieved everything he’s going for now last year. His problem was his party, his MPs and all the pre-election promises he had made. He realized that when he tried to get his parliamentary group to back a temporary extension to the memorandum and hit a wall. Then there were those crazy negotiations that almost pushed Greece off the cliff.
The lessons that have been learned since last year have been very expensive. Many argue that this was a growing-up process, needed so that Greeks could come to accept the fact that the memorandum was the only way forward. They may be right but I think it’s mad that the country has had to pay such a huge price because one politician failed to do his homework before being elected.
Anyway, here we are and Tsipras appears to be convinced that there is no other path. Yet the problems persist and mostly because of the camp within the government who didn’t learn and still believe that we can erase Greece’s debt, defy our partners and achieve a much better deal. This camp consists of a good deal of people and Tsipras has lost his ability to sway them. The refugee crisis, meanwhile, has made them even nuttier than they were before.
I don’t know how Tsipras will be able to convince these people that the deal he is likely to get is a good one. Most likely, a large portion of society will believe that he was sprayed with radioactive isotopes that sapped his strength and clouded his judgement. Oh yes, we’ve already heard that too.
