A Week of Crisis for Greece and Global Markets
After years of false starts it appears that the ‘Grexit’ is finally in motion. Yet when the dust finally settles, this week will be remembered for its market volatility – not as the time when Greece kicked itself out of the euro zone.
Cooler Heads Not Prevailing
Shrewd negotiating is what brought us to this point. Both sides are in a difficult position, and both would rather salt their own fields than be seen as bending to their opponent’s demands.
Luckily it’s not totally up to the politicians. The Greek people are poised to be the ultimate deciders of this latest act of a seemingly unending drama. Early polling shows clear support for accepting the Eurogroup’s offer in the upcoming July 5 referendum. One poll conducted over the weekend by Alco, a Greek newspaper, found 57% in favor of a deal, and another conducted by Kapa Research found 47% in favor and 33% opposed.
As far as Prime Minister Tsipras is concerned it’s a win-win situation, and this is something that has undoubtedly influenced his negotiating style. Many believe that his Syriza party wanted to default and exit the euro zone from the very beginning, though it had to drop this unpopular platform in order to be voted in by a Greek electorate still largely in favor of remaining in the euro zone. Walking away from the table in the early rounds was never an option; Tsipras had to appear like he was negotiating in good faith. But by driving an exceedingly hard bargain on Greece’s bailout conditions, he could either break the cycle of austerity or induce a ‘Grexit’ under circumstances that would rally Greeks against a cruelly vindictive Brussels establishment.
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