It appears we may finally be reaching the endgame of the endgame on Greece.
Greece is suffering a bank run and owes just over $2 billion in debt payments due Friday, but shows no signs of having the money or meeting the Troika’s conditions for obtaining more. Quite the opposite. Greece’s left-wing Syriza government is increasingly acting like an erratic heroin addict refusing to check into rehab and howling through the streets at night in search of an angry fix, heedless that there’s an arrest warrant out in his name.
“The International Monetary Fund, one of Greece’s main three creditors, was reported to have called Greece ‘the most unhelpful client’ the Fund has dealt with in their 70-year history.”
“During the teleconference, the Greek representative said his government wasn’t prepared to talk about the country’s finances with technical experts and instead wanted European Union leaders to discuss the issue at a summit in Brussels, one of the European officials said.”
I’m sure telling your bank that you’re “not prepared to discuss my finances” when asking for your fifth bridge loan would go over really well.
Also this: “There was a general feeling that the Greek side is completely out of touch with reality.”
You think? How about the fact that Greek parliament just passed a raft of anti-austerity spending measure, which is rather like a man with stage 4 lung cancer lighting up a couple of stogies in route to the operating room.
Some are wondering if Syriza wants to see Greece kicked out of the Euro.
EU institutions seem far more ready for what lies ahead. “The European Central Bank (ECB) is preparing for a possible Greek exit from the euro zone.” Conversely, EU insiders have also floated the idea of imposing capital controls to prevent Greece from leaving the euro.
And the one person whose opinion matters the most? “German Chancellor Angela Merkel said Thursday that Greece has no choice but to carry out economic reforms if it wants to receive more financial aid, dashing any hopes Athens might have had for a softening in Berlin’s stance.”
Carrying out real reforms (like stop spending more money than the government takes in) is what Greece in general, and Syriza in specific, has steadfastly refused to do. And the reason they refused is that the European cradle-to-grave welfare state has become more sacred to voters than the capitalist economics and fiscal discipline necessary to support it.
This is not a recipe for happiness.
There’s a chance that all of this is posturing on both sides, and that a kabuki compromise involving small reforms in exchange for still more loan extensions may yet kick the can a few more feet down the road. But there is every sign that EU institutions have finally tired of Greece’s show, and are willing to see the final curtain drop. And the Greeks are about to learn that the vengeance of the gods of the copybook headings cannot be delayed indefinitely…