Friday, February 20, 2015

The Greek Deal

So, they came down to the last day to cut a deal. The best information on it right now is on The Telegraph’s live blog for February 20.

Greece appears to have settled for the same deal they walked away from on Monday. That deal didn’t cut them much of a break, but gave them 4 months of leeway in which to settle the situation. All this for a one page statement of generalities, like this one:

The Greek authorities commit to refrain from any rollback of measures and unilateral changes to the policies and structural reforms that would negatively impact fiscal targets, economic recovery or financial stability, as assessed by the institutions. [emphasis original]

Syriza’s campaign commitment was to not refrain from a unilateral rollback of structural reforms (put in place by the previous government). How do they spin this: we lied all through the autumn to get elected? we lied to the Eurozone this week? we’re not lying, but the Germans are being really mean to us?

My take on this is that the problems with Greek society are deeper than that, and the capability of governments to solve problems is less than people tend to imagine.

So, watch the news in June because they’re going to do the same thing all over again.


There are two reasons they ended up doing this on Friday night.

  1. The most common time to watch news on TV is 6 pm on weeknights (with ratings the lowest on Friday), and the press conference was at 8 pm. By doing this on Friday night, they’re hoping that the media circus will have died down a little by next week. This is pretty common in governments everywhere, but let’s be realistic: if you have to think that way about your policy announcements, they’re probably not popular ones.
  2. Banks are closed on weekends (and ATMs have limited funds). And Monday is a holiday in Greece. So they have 3 days for the news to settle in, and for capital flight to slow down. The thing to watch for on Tuesday is how the banks in Greece look: are they open? are their lines? I do not think I’d put much stock in riots: those are pretty common in Greece, and they’ve weathered many of those over the last few years.

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