Last Sunday’s referendum, it turns out, was entirely without substance. It was nothing more than political theater. So too was the past two weeks of hardship in Greece, of closed banks and limits on ATM withdrawals. All of that served no other purpose than for Tsipras to pretend to the Greek public that he was standing up to the EU. Less than a week after the referendum, he turned around and proposed to the Troika almost the same program they proposed to him on June 26. The main difference is that he is asking for €53.5bn of new loans, and they were offering only €50bn. If Tsipras had countered with this proposal two weeks ago, I think it would have been accepted, and Greek banks never would have closed.
Come to think of it, Tsipras’ offer is not really all that different from the Troika’s first offer to him back in February.
I guess one should never be surprised by the brazen duplicity of politicians. But this is so extreme, European leaders are probably having trouble believing their eyes. I imagine politicians across Europe today forwarded Tsipras’ offer to their staffs with virtually the same questions: “What am I missing? Where’s the catch?” Perhaps somebody will find one. I didn’t.
Tsipras has just put European leaders through a hell of a wringer. He insulted and denounced them vehemently in front of the Greek nation. He swore he could never accept their humiliating demands. He urged Greeks to back him in his defiant stance, and received their backing.
And then he turned around and asked European leaders to let him take their old offer, with what appear to me to be minor changes that could easily have been accepted if he had made them two weeks ago. European politicians would normally care more about the fundamentals of any Greek offer than how they are dressed up for the benefit of Greek domestic politics.
But Tsipras may have simply gone too far with this stunt. Europeans may be too insulted and annoyed to let him get away with it. It will be interesting to see.
(UPDATE: Bloomberg is reporting that Tsipras is asking for “debt restructuring and reprofiling of Greece’s long-term debt due after 2022,” which if true could be the catch I missed. I see no such language in the version of Tsipras’ proposal that I linked to above, which was published by Le Monde. A demand for a write-down would be rejected. A demand for some maturity extension might be considered. Le Monde, by the way is reporting that the French government had a big hand in crafting Tsipras’ proposal.)
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