Wednesday, July 01, 2015

Baffled by Clear Picture; Sirens of Blackmail; Merkel's Alleged Revenge Will Backfire

Sirens of Blackmail

Having already explained twice what is going on with Tsipris' ever changing statements, I find it amusing that eurozone nannycrats cannot figure things out.

A few snips from the Financial Times article Tsipras Urges Greeks to Defy Creditor' "Blackmail" will explain what I mean.
Greece’s prime minister accused Europe’s leaders of attempting to “blackmail” Greek voters, just hours after apparently holding out an olive branch to the country’s creditors by accepting most of the terms of the economic reform plan they had tabled last weekend.

Eurozone officials said they were baffled by the mixed messages coming from Greece, which this week missed a €1.5bn payment to the International Monetary Fund and has been forced to impose capital controls to avert a financial meltdown.

In a nationally-televised address, Alexis Tsipras, the Greek premier, urged his countrymen to vote No in a referendum on whether they should accept tough terms for bailout aid, and accused EU leaders of threatening to drive Greece out of the euro.

“The sirens of destruction are blackmailing you to say yes to everything without any prospect of exiting the crisis,” Mr Tsipras said.
Baffled by Clear Picture

One has to be really dense to not understand Tsipras is saying and doing exactly what needs to be said and done to help sway a "no" vote on the referendum.

One might argue that eurozone officials do understand but purposely sound like they don't, however, that idea has two major strikes against it.

  1. When stupidity is a clear choice, it is likely the right one. Occam's Razor suggests the simplest answer that works is the most likely answer, and what can be simpler than stupidity?
  2. It could be in the best interest of the eurozone offcials to make a statement that Tsipras is electioneering.

Of course, the eurozone officials are also electioneering, so perhaps they simply feel trapped and have no idea what to do or say about Tsipras' moves.

Merkel's Revenge

Here's an amusing story that is equally clueless in nature: Angela Merkel Takes Revenge on Greek Prime Minister.
Alexis Tsipras stunned Greece’s creditors on Saturday by walking out of rescue talks and calling a national referendum on their last bailout offer. Now German Chancellor Angela Merkel is taking her revenge.

She does not speak it, at least not in public. But with quiet determination she is making the Greek premier squirm — by refusing his desperate efforts to return to the negotiating table.

Reflecting the desperation felt by some of Greece’s creditors, French President François Hollande called on Wednesday for an “immediate accord”.

But Ms Merkel has stood apart, insisting that there can be no more talks until after Sunday’s referendum — a stance she calmly reiterated to the German parliament on Wednesday.

“She is squeezing Tsipras hard because he has tried to squeeze her [by calling the referendum], even if with limited effect,” said Josef Janning, a Berlin-based fellow at the European Council on Foreign Relations think-tank.
Merkel's Alleged Revenge Will Backfire

Reader "AC" hits the nail on the head again today with another well-reasoned thesis. "AC" explains why the alleged "squeeze" is counterproductive.
Hello Mish

Looking at the last developments, it seems to me that Germany is making errors in its negotiation strategy (if they have any).

They basically closed the door to any discussion before the referendum. This is a driver to vote "no".

The message is "we will sit again at the negotiation table after the referendum", but if "yes" wins there is no negotiation to do!

The one that has the most to lose in deleting the the referendum is Tsipras.

Tsipras on his side asked for what he needed the most and what he used the most so far: time. Time gives Greeks and their government ability to multiply the options and the negotiation power.

Let's see what happens.

AC
Merkel Squeezed Three Ways

It appears to me that Josef Janning's think tank is also baffled by a clear picture. The only one who is squeezed here is Merkel.

The chancellor is squeezed between a referendum she does not want, a majority of Germans who are willing to say goodbye to Greece, and her own position of not wanting Greece to leave the eurozone on her watch.

That's a tight squeeze conundrum with absolutely no answer.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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