Greek Finance Minister Yanis Varoufakis has been demoted, evidently because the EuroCrats he was negotiating with hated his guts (a significant drawback when you’re trying to convince creditors to pour more money down the rathole that is the Greek economy).
Will it make any difference to debt negotiations? Maybe, maybe not. It depends on which of two reasons he was fired for:
Option 1.) Varoufakis was the designated Bad Cop in negotiations, and now he’s the symbolic sacrifice. “Golly, that Varoufakis guy was sure a jerk when he asked you to give us more loans without getting any reform in return! Now that I’m here as Mr. Good Cop instead, I’m sure you’ll give us give us more loans without getting any reform in return because we’re asking really, really nicely.”
Option 2.) A lightbulb (or at least a dim, flickering candle) has finally gone off above the heads of the ruling far-left Syrizia Party that they will, in fact, actually have to implement real reforms if they want to shake more dough out of Mean Aunt Angela, and that implementing reform will only mean they’re really boned, while defaulting and leaving the Euro would mean they would be completely and utterly boned.
Arguing for Option 2 is Reality and Logic, which have had very little to do with Syriza policy heretofore. Arguing against it is every single action of the Greek ruling class over the last five years. Best case, probably-too-optimistic scenario is that they’re going to try the God Cop Con first, then, when it fails (and it will), they may actually be dragged kicking and screaming to Option 2. Or at least appear to do so as part of the extend and pretend strategy that has characterized the entire Greek debt crisis since the beginning.
None of it changes the underlying problem: The Greek welfare state is unsustainable, they’ve run out of other people’s money to pay for it, and they refuse to reform it, even at the point of impending national bankruptcy.
Tags: Euro, European Debt Crisis, Foreign Policy, Greece, Syriza, Welfare State, Yanis Varoufakis