In rejecting the Brussels Austerity 3.0 Agreement, Greek Prime Minister Alexis Tsipras surprised everyone last Friday with his call for a July 5 referendum, including myself, who had expected his government to resign if he didn’t choose the poisoned Chamberlain chalice. Is this a brilliant “Flucht nach vorne” (take your pick of “taking the bull by the horns” or “reckless headlong flight”)? Or just the final quixotic round of the game of turkey Greece has been playing with the Eurozone (which needed until Sunday to catch up by issuing a text of their last confidential proposal)?
For, as was to be expected, by Saturday the Eurogroup had turned down Tsipras’s request for an extension of the second bailout program until after the referendum, instead letting it expire on June 30, the date Greece also needs to transfer some €1.6 billion to the IMF, money it has admitted it does not have (no more miracles of the fish and loaves). And on Sunday the ECB, while not terminating its ELA support to Greek banks, did not raise the previous limit, meaning that there will be no additional funding to meet the onslaught of angry customers this week (reportedly, even Greek ministers were desperately withdrawing money from ATMs during the parliamentary vote on the referendum on Saturday). Thus it is not even clear what the Greek people would be voting on July 5 should the referendum still take place, since the Eurogroup offer seems to be already off the table, and their country will have already fallen off a cliff of default and financial collapse by then.
So the Greek tragedy is taking its easy to anticipate course: bank holidays and capital controls, something the Syriza government should have been preparing for for months, if they ever had a Plan B (something which, as part of their public game of chicken, they always denied, and now I really am beginning to think was actually the case).
Faced with an outcome one has been predicting for months (e.g., April Fool’s post, biblical prophecy), does one indulge in Schadenfreude? I think that would be disrespectful and self-indulgent in the face of this very real tragedy for the Greek people. Despair? Whom does that help? The only thing that remains seems to be black humor.
So here is a sampling of recent quotes that I think can only be appreciated as a sublime form of black humor in the face of the unpalatable and inexorable march of history:
Saturday, June 27
[Greek Finance Minister Yanis Varoufakis] declined to say how he thought the European Central Bank should respond to the dire situation facing Greece's banks which saw heavy withdrawals on Saturday on top of the billions that have flowed out in recent weeks, but he said the banks should remain open.
"This smooth transition will require that everybody does their job properly, and that includes the central bank, to keep the banks open and to keep the monetary system functioning as it should," he said [New York Times/Reuters].
The very next day the Greek government closed the banks and imposed capital controls.
Saturday, June 27
When representatives of the three creditor institutions - euro zone governments, the ECB and IMF - met after Greek Finance Minister Yanis Varoufakis had left, participants quoted one senior official as joking that at least they could refer again to the lenders as the "Troika"… [Reuters].
FT (Alphaville blog?), in a recent article I can no longer locate, identified that “senior official” as ECB President Mario Draghi, who as always will have the last word on matters Eurozone. I must admit that, whatever else you can say about this debacle, you have to admire his dry wit and sangfroid.
Sunday, June 28
“I just can’t believe these guys are willing to torch their own country,” one investor with a large holding of Greek bonds lamented in an email. “They thought this was a game. Now, when the supermarkets run out of food, gas stations run out of gas, hospitals have no medicine, tourists flee, salaries don’t get paid because banks shut — what are they going to do?” [New York Times].
Now off to the movies at the Bologna Cinema Ritrovato film festival for some light comic relief and cinematic time-travel.