by DoDo
Fri Mar 20th, 2015 at 05:08:30 PM EST
Over the past week, the conflict between Greece and the creditors escalated again. On one side, the ECB and the IMF exposed Greece to a liquidity crunch, further boosted by the inflammatory statements and Grexit speculation of German finance minister Wolfgang Schäuble and the capital controls speculation of Eurogroup president and Dutch finance minister Jeroen Dijjselbloem; all the while lower-ranked representatives of the Troika openly expressed their hope of forcing the Syriza government to fall in line. On the other side, the Greek government set on a collision course by putting Troika technocrats in their place and pushing through its first poverty-alleviating measures in open defiance of calls for prior consultation and approval by the institutions, seemingly excluding any possibility of getting ECB funds released.
Now, after the mini-summit-within-the-Council-summit on the night from Thursday to Friday, the sides mended fences (somewhat). What were the results? I claim that, in spite of no immediate alleviation of the credit crunch and the continued rhetoric from the creditors, all the significant changes are wins for Greece:
- Commission President Jean-Claude Juncker declared that there is a humanitarian crisis in Greece, a recognition earlier refused by the Eurogroup. This is also an effective after-the-fact approval of the 'unilateral' anti-poverty package.
- Greece got explicit approval for not going through with reforms agreed by the previous government (drawing up its own instead), breaking with pacta sunt servanda.
- Reportedly, Tsipras wanted his colleagues to talk down the chances of Grexit rather than talk it up like Schäuble and Dijsselbloem. In subsequent press conferences the participants seemed to heed that call.
What happened? To me it seems like the Greek government played hardball because they expected the hawks to blink first. This is supported by a week-old Spiegel article, which, in spite of lots of anti-Syriza rhetoric, claims that neither Mario Draghi of the ECB nor Juncker of the Commission wanted to threat the Greek government with Grexit, and Juncker in particular continued his subversive war for influence against German chancellor and European Council alpha dog Angela Merkel.