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So, do you think they (Tsipras/Varoufakis) are being naive or playing this game?

I have to say I subscribe to your perspective here completely. So, if they are being naive (i.e. in practice that would mean even more naive than Lapavitsas) then they are taking Greece into a very bad place: either humiliation or catastrophe (in this case by not preparing for the forced exit).

OTOH if they are preparing for this, then they might be taking the only viable step to save Greece...

by cagatacos on Thu Mar 12th, 2015 at 12:23:20 PM EST
I don't know, it is impossible to say for certain.
by Upstate NY on Thu Mar 12th, 2015 at 12:25:00 PM EST
[ Parent ]
"Preparing for an exit" is not a yes/no question. It spans a continuum.

At one end you have "outside their frame of reference."

At the other end, you have "detailed implementation plan on file, with multiple contingency options at each critical stage gate, cadres already mobilized, key institutions suborned, and key stakeholders mapped and scheduled for subvertion or subjugation."

It is clear from Syriza's public record that they do not consider a Grexit unthinkable, so that's already a major improvement over the previous government. It is also clear from their negotiating stance that they do not have a plan that they can go out an execute tomorrow.

But beyond that, as Upstate NY notes, it is not possible to divine from the public record where on the continuum from idle speculation to detailed time table they are.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Mar 12th, 2015 at 06:00:31 PM EST
[ Parent ]
Of course they do not have a plan they can go out and execute tomorrow. They have beenin government for about 6 weeks and spent the first month in negotiations. They would have to put in place some structures using the levers of government in order to ready any plan other than "pull the pug come hell or high water".

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Thu Mar 12th, 2015 at 06:26:11 PM EST
[ Parent ]
The question is not one of time (at least at this stage). It is one of their mindset.

One can only speculate (things like this would have to be kept secret until after the fact), but one can hope that at least they are at least considering being forced out (or even considering getting out by themselves).

If they only thing that they are doing is paying lip service to potential Grexit and are not preparing a plan C or D based on it, then they might be in a very complicated spot soon.

If they are bluffing and the bluff is called, it will be humiliating (the kind of humiliation that can bring lots of demons to the surface).

by cagatacos on Fri Mar 13th, 2015 at 07:02:05 AM EST
[ Parent ]
I was sort of hoping that their plan would involve something like this but they don't seem to be moving on any of the legislation to implement the promised reforms that would enable rollout of an electronic parallel currency.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 13th, 2015 at 07:27:30 AM EST
[ Parent ]
Honestly I don't think this plan is doable in the time frame. Even going the simple tax credit route may not be easy since they don't control the banks (At least I remember threatening noises from the ECB on them changing out management). What does that leave us with? Paper?
Whatever they try they need to keep tax collection as a permanent threat so 100 instalment payment plans and tax spies.
Also I think they underestimated ECB unreasonableness.
by generic on Fri Mar 13th, 2015 at 09:23:46 AM EST
[ Parent ]
I don't think they underestimated it. They have studies from London lawyers and even Citigroup on the ECBs responsibilities vis-a-vis the Bank of Greece. This is part of any contentious Grexit scenario. One might even say they are counting on the ECB's unreasonableness.
by Upstate NY on Fri Mar 13th, 2015 at 09:31:14 AM EST
[ Parent ]
I doubt the Greek state has the administrative capability to that.

Even if under more optimal circumstances they could do it, circumstances are not optimal. After any change of government a new government needs a few months to get a grip on the administrative apparatus. Syriza faces special problems in this regards.

by IM on Fri Mar 13th, 2015 at 10:40:45 AM EST
[ Parent ]
So the slow motion trainwreck continues, and a Greek default within the next 4 months is quite likely.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Mar 13th, 2015 at 10:47:45 AM EST
[ Parent ]
Perhaps. Possible, but I don't think likely. Too damaging to EZ and EU, as Juncker e. g. seems to understand.

But, as you said:

"They have beenin government for about 6 weeks and spent the first month in negotiations. They would have to put in place some structures using the levers of government in order to ready any plan other than "pull the pug come hell or high water"."

So Syriza simply needs time for any grand schemes. If they have grand schemes.

by IM on Fri Mar 13th, 2015 at 11:07:11 AM EST
[ Parent ]
But Juncker is a bit player in this. It only needs a minority in the Eurogroup or a majority in the ECB  to drive this train off the tracks and down a ditch.
by generic on Fri Mar 13th, 2015 at 11:59:36 AM EST
[ Parent ]
Juncker said as much today when Tsipras came to Brussels: the decisions are taken by the Eurogroup.

And that, the primacy of the Intergovernmental over the Community method, is one of the toxic legacies of Merkel's handling of the crisis.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Mar 13th, 2015 at 12:01:16 PM EST
[ Parent ]
True, technically that is none of Junckers business. He intervened anyway; somewhat successfully.
by IM on Fri Mar 13th, 2015 at 12:28:33 PM EST
[ Parent ]
A Commission President he is one of the European Union's appointed general purpose mediators. But he cannot force anything on anyone. And he oversees 1/3 of the Troika.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Mar 15th, 2015 at 05:58:45 PM EST
[ Parent ]
Hmm, apparently the Commission is now out of the Troika, replaced by the ESM. More intergovernmentalism and another insane German in charge (Klaus Regling).

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 05:37:14 AM EST
[ Parent ]
If the plan is to create a scenario where Greece is forced to exit against it's will - and thereby maintain it's Grexit negotiating position - then Greece cannot simultaneously be seen to be planning for Grexit voluntarily. In other words, part of the plan may be to be seen not to have a plan for Grexit.  There is only so much "cadres already mobilized, key institutions suborned" you can do without everyone knowing about it.

Critical to game theory is managing your opponents expectations of your intentions - and keeping them in the dark as to your real intentions as much as possible. At one level Varoufakis et al are playing the game of negotiating the best deal they an for Greece within the EZ.  It would be surprising if they didn't have at least a contingency plan for what to do if that first route failed to produce a feasible result.  But equally that Plan B must not be so public and obvious as to undermined whatever slender chance they have of succeeding with plan A.

There is also the not insignificant matter that the majority of the electorate are not yet resigned to Grexit.  Syriza will take the full blame for all negative consequences if they are seen to have actively sought that outcome.  Less so if it is seen to have been forced on them.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Mar 13th, 2015 at 07:03:16 AM EST
[ Parent ]
If the plan is to create a scenario where Greece is forced to exit against it's will - and thereby maintain it's Grexit negotiating position - then Greece cannot simultaneously be seen to be planning for Grexit voluntarily.

On the contrary. There is nothing wrong with saying "we desire a negotiated agreement, but we are building our portfolio of alternatives in case negotiated agreement turns out to be infeasible."

Greece does need to keep any mobilization it is doing under the radar. But the reason is that until a fairly advanced state of readiness their enemies can make them lose faster than they can mobilize the rest of the way.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Mar 13th, 2015 at 03:09:15 PM EST
[ Parent ]

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