Wednesday, May 24, 2017

German newspaper editor for Die Zeit calls it…Tsipras won. Even if Greece leaves Eurozone, it stays in EU with ‘access to zillions of money’

The editor of a major German newspaper, Die Zeit, believes Tsipras’ “very clever game of chicken” will almost certainly pay off.

Is it game theory at its best?

Is this why Alexis Tsipras and Yanis Varoufakis were so relaxed throughout this whole process?

Perhaps the only reason Tsipras is actually working to strike a deal with creditors is because he has been given a cleat mandate by the people…negotiate a better debt deal, but do not leave the Eurozone.

So Tsipras is negotiating to get a debt deal that, at its best, eases five years of austerity, but at its worst does not mean a Grexit…but even at its worst one fact should be emphasised, Greece will remain in the European Union.

Let’s emphasise this again. Even if Greece leaves the Eurozone (the currency union) it will remain in the European Union, and that means access to all the benefits of the EU without the terror of the currency.

Merkel knows this. Hollande knows this, and this is why German newspaper editor of Die Zeit, Josef Joffe, believes the EU will eventually blink…and even if it does not blink, which is possible knowing the poor calibre of leader Merkel is, Tsipras and Varoufakis may actually have the last laugh.

The free market will ensure that whatever Greece lacks, due to its past Euro import-dependant economy, its future “drachma” economy will find ways to substitute and this will snowball into big time growth.

Via CNN:

…the editor of a major German newspaper, Die Zeit, believes Tsipras’ “very clever game of chicken” will almost certainly pay off.

German Chancellor Angela Merkel “knows she does not want to have a dead body on her hands — not in Europe, not in her Europe,” Josef Joffe told CNN’s Christiane Amanpour on Monday.

“German threats, and everybody else’s threats, are not credible.”

There will be no Grexit, neither enforced nor voluntary,” Joffe said, using the shorthand term for a Greek exit from the eurozone. “The simple reason, which many people don’t understand, is that even with a Grexit, Greece still remains in Europe, and therefore it will have access to all kinds of zillions of money…The only thing that will change is the spigots where the money runs through.”

There appears to be some splintering of resolve among the so-called “institutions” — the Europeans, the European Central Bank and the International Monetary Fund.

French President Francois Hollande took a somewhat softer tone after meeting with Merkel in Paris on Monday, and the IMF has bucked the line by releasing a preliminary report last week that admitted Greece would likely need the debt relief its government is so desperately trying to get.

“They said, listen, boys and girls, Greece cannot pay,” Joffe said. “If the IMF tells you that, that’s a resounding victory for Tsipras.”

European leaders — despite their, by varying degrees, hardline rhetoric — understand that the country will collapse without an injection of money, he said.

“Merkel knows that; Hollande knows it; and, above all, who else knows this? Tsipras.”

“He has told Europeans, ‘You know what? Come and punish us. You’ll punish yourselves even more. Do you really want to collapse your economy? Do you really want chaos in the streets? Do you want another storm on the Bastille? You don’t, do you?’

“Nobody wants to be in the position where he cuts his nose to spite his face.

“And that’s why it is my considered bet that the Greeks have won this game of chicken. Wait a few days and you’ll see.”

References:

http://edition.cnn.com/2015/07/07/world/greece-joffe-amanpour/

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