The Logic of Greece’s Request for a Loan Agreement Extension

Yves here. There’s been a heated debate among members of the commentariat as to whether the latest proposal by the Greek government to the Eurogroup ministers was a significant concession or a carefully worded formulation that did not give much ground. This interview with Dimitri Lascaris, a top securities lawyer in Canada, gives a nuanced discussion of that issue, including the politics on the Greek and German sides.

SHARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I’m Sharmini Peries, coming to you from Baltimore.

Germany rejected a Greek proposal for a six-month extension to its European zone loan agreement on Thursday, saying it was not a substantial solution, because it did not commit Athens to stick to the conditions of its international bailout.

To discuss why, we are joined by Dimitri Lascaris. Dimitri is a partner with the Canadian law firm Siskinds, where he heads the firm’s securities class-actions practice.

Thank you so much for joining us, Dimitri.


PERIES: So, Dimitri, let’s start off by explaining why they rejected Greece’s proposal.

LASCARIS: Well, I think a lot of people in the Eurozone are asking themselves that very question today, because it’s not entirely clear, despite the torrent of heated rhetoric coming out of Berlin. What happened today was that the SYRIZA government did something which it had indicated previously quite clearly it was not going to do, and that is it sought an extension of a loan agreement called the Master Financial Assistance Facility Agreement. And under that agreement, Greece has extended financing on condition that it comply with the 2012 memorandum that stipulated the terms of this rigorous and inhumane austerity regime, which has devastated the Greek economy.

And so, today, when it applied for an extension of that agreement, many people within the Eurozone believed that implicitly, implicitly it was committing to compliance with the 2012 memorandum, something it had said it would not do, at least not completely. It was prepared to comply with something in the range of 70 percent of the measures, but not the most punitive measures. And many people viewed this as a capitulation. In fact, even in the relatively progressive part of the mainstream media–in Europe, for example, The Guardian, the economics editor, published an op-ed upon learning of this, in which he said that Athens has raised the white flag.

However, before the Eurogroup could respond formally to the proposal, the government of Germany issued a heated enunciation of the proposed extension of Greece. And apparently–and it used the words Trojan horse, and it described the agreement or the proposal as being in effect what Greece had been saying it wanted all along, which was a bridge facility or terms of financing that it did not include a commitment to the austerity program.

And I think really, as best as I can tell, what’s rankling the German government is that the Greece, the new Greek government has not explicitly and unequivocally stated in writing that it is going to comply with the terms of the 2012 memorandum. But as I say, many people in the Eurozone think that at least implicitly that’s what the Greek government committed to do today when it applied for an extension of the Master Financial Assistance Facility Agreement.

So the question now is: what is Greece going to do? You know, one government official was quoted in the press after learning of the German reaction that this was Greece’s final offer and that Greece was not going to make any further commitments beyond those stipulated in its proposal today. It will probably find out within the next 24 hours. There’s going to be a key meeting of senior figures within the Eurozone tomorrow. It may be that the German government has overplayed its very strong hand by insisting on an explicit capitulation by the Greek government. Oftentimes in negotiations, people leave some things unspoken because they realize that pushing the other side to the point of explicitly conceding an important point could cause an entire agreement that is, on the whole, satisfactory to one side or the other to unravel. The Germans seem prepared to take that risk, the risk of seeing the entire proposal unravel because of its demand that there be an explicit capitulation by the Greek government.

PERIES: And perhaps they preempted what might be taking place in terms of conversation over the next day in Athens. What do you anticipate that conversation will sound like, given what Germany has just said?

LASCARIS: Well, I think there were some interesting photographs in the press today about what the Greek press has been saying, and it was being contrasted to what the German press has been saying. And on both sides there’s a great deal of inflammatory language.

One Greek newspaper, well-known Greek newspaper, had blazoned on its front page “Jawohl, Kommandant”. And another, a German newspaper, a major German newspaper, had a picture of Putin and Tsipras on the front page and asked the question in German, which of these individuals is more dangerous to the future of Europe? So there’s very inflammatory language being used. I think that the language is going to become increasingly inflammatory. A left-wing party that did not–it’s not aligned with the communists or with SYRIZA. It’s called ANTARSYA–already issued a blistering denunciation of SYRIZA several days ago, because it had already come to the conclusion that SYRIZA was in effect capitulating to the demands of the austerity bloc.

I expect you’re going to see more vigorous and heated denunciations from the left directed at SYRIZA in the days ahead. And from the so-called center, from–or the center-right, which is actually the extreme-right in Greece now, the New Democracy Party and the formerly socialist party, PASOK, you’re going to hear the refrain, I told you so, that this is exactly what we predicted, that in fact nothing was going to change, and SYRIZA is embracing the very reality that we were responsibly coping with before the election. So that’s the kind of language you’re going to hear, I think. And regrettably, I think that message, it may very well gain some traction with the Greek electorate.

PERIES: So, Dimitri, what options does Athens have, does SYRIZA have?

LASCARIS: Well, the problem is it’s boxed itself into a corner. It has removed explicitly the option of an exit from the Eurozone. It’s removed explicitly the option of defaulting on Greece’s debt. It removed explicitly the option of running a substantial deficit, which is precisely what any responsible government would do when it its economy is deeply depressed. It would try to generate demand within the economy through spending. And this government committed to a primary surplus of 1.5 percent of GDP, notwithstanding the extraordinarily depressed economic conditions in the country.

So it from the very beginning–understandably, from one perspective, because it is in a very difficult position in terms of the financing needs of the state, but it took off the table its most powerful weapons. And furthermore, it’s negotiating with people who are, down to their very bones, committed to a radical neoliberal agenda, and furthermore, who quite apart from what their ideology may be, are heavily politically invested in the disaster of austerity. You know, if there were to be an implicit or explicit recognition by the government of Angela Merkel, for example, that austerity has gone too far, it hasn’t worked, or has actually undermined the ability of countries like Greece to service their debts, which it clearly has, these people would go down in infamy as having been the architects of a European disaster. So they’re politically invested, they’re ideologically hostile to SYRIZA, and SYRIZA has taken off the table its most powerful weapons.

So, ultimately, what can it do in the current circumstances? Very little. However, if it were to reconsider its commitment to the euro, which is precisely what it should do, and if it were to put on the table in a responsible and intelligent manner the option of a Grexit, which precisely what it would do, I suspect that it would be able to achieve a much better outcome in this.

PERIES: And those options are really not off the table, even though they have stated that that’s not the preferred option. Those options still remain.

LASCARIS: Well, clearly they could embrace that option. And there are clearly people within SYRIZA who, at least in the past, have embraced that option. One such person, a very able and eloquent economist who’s been on The Real News several times, Costas Lapavitsas, he’s embraced that option, although he’s begun to moderate his tone since becoming an MP for SYRIZA in the most recent election. There clearly is within SYRIZA a significant constituency that favors a Grexit. Within the party now they have the economic sophistication to navigate through the very difficult project of exiting the Eurozone. What remains to be seen is whether the political will to do this is there.

PERIES: Right. So, Dimitri, I want to thank you so much for joining us today and explaining this, but we will be following this over the next 24 hours, so I hope you can come back tomorrow and we can see what the response of the Greek government is.

LASCARIS: It will be my pleasure, Sharmini. Thank you.

PERIES: And thank you for joining us on The Real News Network.

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  1. /L

    Costas Lapavitsas answers your questions on Greece and the eurozone crisis
    June 2012
    “But let us be clear that the current predicament of Greece is not the result of structural weaknesses that have been with us for a long time. The country is on the brink of ruin because it chose to join a flawed monetary union. …
    There is no doubt that Greece needs root-and-branch change, but the necessary reform is unlikely to be delivered by the dominant social layers. They are precisely the people who do not pay taxes, have the closest connections with the state, possess extensive networks of patronage and are desperate to remain in the monetary union.

    From the start of this crisis, it was clear that a likely outcome would be Greek default and exit. The country cannot handle its vast debts, and nor can it successfully restructure its economy within the structures of the monetary union. Default and exit would have been the rational strategy in early 2010. … Default and exit remain the only feasible way out, except that the pain will now be greater for Greece and less for the core of the monetary union.

    [election 2012] Syriza will have a clear choice. It could abandon its pre-election stance and participate in a government that accepted troika policies. This would be catastrophic for Syriza politically but also for the country. Default and exit would not be avoided in the end …”

    1. kristiina

      How is the pain (of default&exit) less for the monetary union now? If that is true, there’s no pain, why not do a debt jubilee straightaway?

  2. wbgonne

    This analysis seems plainly correct. One cannot successfully negotiate with implacable adversaries by publicly surrendering one’s only real leverage. I think that was a grave tactical error by SYRIZA. SYRIZA could have stated its strong preference for not defaulting and for remaining in the EZ, but taking those options off the table entirely was foolish.

    1. Nell

      SYRIZA could have stated its strong preference for not defaulting and for remaining in the EZ, but taking those options off the table entirely was foolish.

      This is a persuasive argument. Perhaps it was born out of mistakenly thinking that they were dealing with reasonable people who were committed to the European integration project. When you are a reasonable person it is very hard to imagine how unreasonable people will behave.

    2. Dan Allen

      Grexit is always implicit. Besides, this is a political game. Who gets blamed in the event of Grexit? In that event, I expect Greece will be blamed for wanting to avoid paying its debts. However perhaps some honest journalists will realize that Greece went to the brink with reforms and wanted to stay in, and if that’s so, a Grexit will show how intractable the eurosone really is.

      For this reason Syriza doesn’t put Grexit on the table.

      If it happens, then Lapavitsas is right. greece should have left in 2010 when private holders had its debt, and it would have avoided the last 5 years of being killed in the press. It would have been Argentina.

    3. Doug Terpstra

      Was it an error? As Lascaris said, Syriza inexplicably boxed itself into a corner at the outset. It’s uncomfortably similar to Obama shutting out single-payer before even negotiating the shape of the table and then conceding even the public option. Perhaps it was a brilliant ploy to provoke the predictable “NEIN NEIN NIEN” response it just got, forcing a default and exit with clean hands or the capitulation/betrayal was preordained as it clearly was in the Obamacare debacle.

      I hope it is the former, in which case the blame for EZ implosion falls squarely on Germany, and Greece can move on with head held high. But Syriza has cover in either case. As Obama showed in the Obamacare disaster, he is still viewed by most Democrats, not as Judas but as flawed messiah. Syriza’s election of a right wing ND-party president is not a promising omen.

      1. wbgonne

        But Syriza has cover in either case. As Obama showed in the Obamacare disaster, he is still viewed by most Democrats, not as Judas but as flawed messiah.

        You may be right, but from what I’ve read, there is a lot of doubt and anger within SYRIZA about how the leadership has handled this. How the Greek people react remains to be seen and, naturally, depends upon the final outcome.

        As for Obama, the Democrats and America: we are deluded fools with a crumbling empire and all its degraded myths to maintain. I assume the Greek people are long past the luxury of self-delusion. But we’ll see.

  3. Alan

    About 80% of Greeks wanted to stay in the EZ “at any cost” by the time of the elections. That’s what makes this such a mess and it should always be in our minds when trying to understand what’s going on.

    But this is changing now pretty fast because a) everyone in Greece, even those who didn’t vote for Syriza, were happy to see a government fight back against the incredible irrationality of continuing the memorandum of economic suicide, and they don’t want to go back to the previous status quo (which is incredibly the only thing “offered” to Greece so far), and b) the more irrational and insulting the German block becomes, the more people realise that there really is no hope for Greece in the EZ of the Euromark. People have had enough and the more they see Tsipras bending backwards for an honourable compromise in vain, the more they realise they have to ponder the unthinkable. At this point, in a very interesting way, the harder the bullying, the more liberating the effect.

    I am confident that if there is no compromise today allowing Greece some room, and a poll is taken during the weekend, Greeks won’t be as supportive of staying in the EZ at any cost, making this a real trend in Greek society. Once this attitude becomes a majority (give it a few weeks), then Varoufakis will have a new weapon, and the only weapon that matters. At this point, he will be able to call the German bluff. For the Greek government, it’s all about surviving and squeezing as much time as possible till they get there.

    I sincerely hope they’ll make it that far.

    1. mike

      Exactly. It’s not unreasonable to see the accommodations proposed to implacable foes as baiting the foes to extremes (aided by the hostile press) and as setting one’s self up internally and externally as having tried one’s best to be the adult. “But they forced us into ________ and made us __________. We didn’t want to, but they’ve shown now that they will not accept us as ruling our own country.” Public opinion swings from support of union to opposition, and you, the acknowledged game theorist, have for years in your public proclamations been setting this up. Yes, this could be BS and the Greeks could really be just naive and stupid, but it’s no less realistic than the interpretations that others with no actual insight or inside knowledge either have been throwing up.

      1. wbgonne

        What you say is true. However — as Yves has repeatedly noted — YV believes Grexit would be disastrous for Greece. I assume YV is sincere in that belief. So if the goal was to fashion a deal Greece could live with then the negotiating strategy was poor, IMO. On the other hand, if SYRIZA’s real goal is orchestrating Grexit, this negotiating strategy may well achieve that. Indeed, it seems SYRIZA’s negotiating stance would predictably lead to only one of two possible outcomes: capitulation or Grexit.

        1. Brooklin Bridge

          I thought there was a third option; do not capitulate leading to default but not Grexit. I’m confused as to why default is no longer viable. Indeed, is it no longer viable?

          Like many, I have a hard time keeping everything in my head at once. And also like many, capitulation, in reality or in appearance, is difficult to deal with after so valiantly standing their ground even if there is simply no other viable alternative. I imagine this is a bitter pill for many Greeks who may not be privy to the fact that every conceivable road is a dead end. But appearances or reality, this seems to be going way beyond any fine line of being reasonable to highlight Germany’s thuggery.

          YV has stated publicly that his “game strategy” is to avoid any and all “game strategy” and simply be honest, and if that is indeed the case, then what looks like and walks like and quacks like capitulation probably is capitulation – tragically inevitable or not.

          1. wbgonne

            I thought there was a third option; do not capitulate leading to default but not Grexit. I’m confused as to why default is no longer viable. Indeed, is it no longer viable?

            I assume, perhaps incorrectly, that default inevitably leads to Grexit. To be honest, I don’t know how default within the EZ would work. I’m sure others here can explain this. It’s a very good question.

            1. Doug Terpstra

              I keep wondering what international banking consultant Lazard is doing for Greece in this. Though not a party to the negotiation, they’ve been strangely mute, especially considering how much political PR factors in this game. It’s another not so promising omen that the same consultant advised the Greeks in the 2012 disaster. A bit like Obama consulting Robert Rubin to pick his economic disaster -response team.

    2. Ulysses

      I think Paul Mason, in his post this morning, has a pretty good analysis of the current situation:

      “In the next few hours, something decisive has to happen. Either the Greeks cave in completely. Or they trip the crisis into a new phase. Varoufakis and his team want to stay in the Euro: they believe, and have sold the idea to their followers, that a “good euro” is possible, in which France, Italy, the ECB boss Mario Draghi and the European left persuade Germany to abandon low growth and austerity. But there is no sentimental attachment to the euro: Varoufakis told me just before the election last month he believed the Euro would collapse within two years if it did not reform.”

      1. hemeantwell

        Aside from my disappointment, I would be astonished if they cave in, to the point that I’d be willing to consider body snatcher theories to explain the shift. To cave would negate their raison d’etre. It wouldn’t be the case that we’re looking at party hacks trying to hold on to sinecures, since Syriza is newly arrived and the state is so impoverished that their sinecures barely come with toilet paper. I think they’ve always maintained a TINA Grexit option in their strategizing, and it will entail an attack on the oligarchs that will be justified by the situation. The Reuters article below gives us a whiff of this, and nb that it quotes a big biz guy sympathizing with Syriza. Hooray for ruling class defectors! Come on down!


        1. Brooklin Bridge

          I would be astonished if they cave in, to the point that I’d be willing to consider body snatcher theories to explain the shift.

          Boy do I hope you are right! This deeply affects all of us. Arm chair participation only seems accurate for those who feel isolated from what’s happening in Europe; the reality is we are all in this up to our necks.

        2. ex-PFC Chuck

          The Reuters link is incorrect. Strip off the leading Double Quote (“) and the trailing Double Quote and Greater Than bracket (“>) and it’s OK. I’d paste the link in here but that might relegate the comment to the moderation queue for a while.

  4. weinerdog43

    I don’t know why the consensus seems to be that Greece can now never say “oops, we changed our mind. A default is on the table.”

    I’ve been in many negotiations where the other party suddenly goes from a previously semi agreeable term, to going the other direction to something completely outlandish. This isn’t a contract. There are no ‘rules’ that must be observed. Whether they actually intend on defaulting is irrelevant. The point is to make the other side think, ‘holy crap, they’re just crazy enough to do it!’

  5. MartyH

    Over the years, I have become too stoopid to predict the actions of various players even in seemingly obvious situations. Where possible, I find it best for my reputation to keep my mouth shut and to take amusement from the often surprisingly ironic actions and positions various parties take. Given the facts as I understand them (nothing to be too confident about or proud of), I can only wish Syriza and Greece well. Beyond that … well, we’ll all see how it plays out.

    Yves and Lambert, thanks for the ongoing great coverage.

  6. alex morfesis

    this too shall pass…

    although on paper one has to accept the notion Syriza was taking the position it would fight the stupid agreements the previous political class of Hellas accepted, I don’t see anywhere that Syriza said they would be able to convert the agreements the first week they were in office. The reason their support has gone up so far so fast is that no one in Hellas expected Minister Varoufakis to do his best Bruce Campbell in the first few weeks…the plan, from what I have been able to guess from taking a post election view of the campaign was and is to point out to the world that Germany can not be trusted to be reasonable and thus should not be at the table as Hegemon…

    that is why I keep saying, game set and match…Germany the brand has just lost value…massive value…

    once the brand of Germany as Hegemon has been reduced to dust, the negotiations proceed…

    schauble is correct, this is a trojan horse…but since he has seen this movie before, he can change the ending…and establish Germany as a benevolent Hegemon…but he is not that bright…he is really just a politician trading chits…and like he let out…in his mind, he asked, what do the greeks want…

    what they want is peace and a chance to succeed…and since the Germans foolishly did not find a way to get this issue off the table, they have now opened themselves up to having every other small nation in the EU challenge their Hegemony…The reason the little man with the Chaplin mustache on November 22, 1940 moved Barbarossa back three months and ordered the German Military to take on Little Moltke, was in the three weeks after Metaxas tricked IL Dunceh into ordering his Italian troops into Greece, everywhere in Europe, resistance suddenly geared up…the great German War machine as occupier was being challenged…and he had to send a message…this is what Metaxas wanted…Metaxas was born on Ithaki Island…like that guy with the bow and arrow that gave us the Trojan Horse…

    and your little dog too…

  7. CSTH

    Let’s keep in mind that this a multi-party negotiation. The goal of Syriza’s ‘concessions’is to drive a wedge between Germany and the rest of Europe.

    1. Glenn

      Yes, but keep in mind. Germany, as well as a few others (Holland, Austria) are running persistent, year after year, current account surpluses. This year it is forecast to be 7.6%. That is just as much a problem for the Eurozone as countries running persistent current account deficits. One obvious solution is to raise the wages and standard of living in the core surplus countries such as Germany. Most of these countries are governed by coalitions and that gives an opportunity to pressure these countries as well.

  8. financial matters

    This reminds me of the saying ‘you pretend to pay me and I’ll pretend to work’. That’s where I think this ‘implicit’ and ‘explicit’ language comes from.

    The ECB/Shauble are saying we will pretend to give you money and Syriza is saying we will pretend to do austerity.

    But I think Syriza is just trying to work with what they have. They really do want to put into effect a program to get their country back on its feet.

  9. mpr

    This is helped me to understand how many people thought the Greek proposal was a big concession. So the Eurocrats believe that the letter implicitly agrees to the conditions in the ‘memorandum’ as this was one of the conditions of MFAFA, whose renewal Greece is asking for.

    But given that the letter contains rather explicit exceptions and carve outs, and given that it will be Syriza implementing their interpretation, what is likely to be the practical effect in terms of compliance ? Given that, isn’t this an attempt to give the Eurogroup a fave saving way out ?

    1. kemerd

      this is also my interpretation. It looks like they accepted to appear defeated in return for some time for developing a strategy without making any concessions that matters for them. Besides, the existing agreement expires in end of march. So a whole new process will start presumably with a better equipped Syriza team. I suspect they also actually deployed Grexit weapon as the change of tone from so many finance ministers is remarkable.

  10. NOTaREALmerican

    I predict that more loot will end-up in the hands of the smart-n-savvy people, regardless of what “option” the sociopaths on either side agree too.

    The Greek sociopaths need more loot to keep their fantasize going, the German/EU/IMF sociopaths need more loot to keep their fantasizes going.

    The peasants only have fantasizes about the sociopaths they just elected not screwing them. This will be replaced in a few months by they realization that they been screwed, followed by new fantasizes that some other groups of sociopaths will lead them to “prosperity” (aka, free loot from someplace unimagined). Repeat forever. The smart-n-savvy people who run Greece, the EU, the banks, the rest of the countries of the world, and the IMF know this.

  11. Chuck Roast

    Several months ago, as I recall, Syriza leaders stated that in line with the views of the majority of the Greek people, Syriza would not, if Syriza were to become the government, abandon the Euro. However, if Syriza believed that they were left no other choice than austerity or Grexit, they would fold their government and call new elections with the specific intent of getting permission from the Greek people to exit the Euro and re-adopt the Drachma.

    These guys are very smart, and appear to very close to the people. They are revealing to the world the total bankruptcy of neo-liberal austerity and German single-minded inflexibility. When they are finally at the edge and capitulation is the only option, Syriza may well adopt currency controls and call new elections.
    YV has explained the specifics of the awful pain to the Greek “social-economy” of a Grexit, but for those of us who don’t have to endure this pain there will be the shadenfreude of watching the Huns bite on the dregs.

  12. Peter Dorman

    Three thoughts regarding Syriza strategy. (1) They are as smart as I am and far better informed, so anything I’ve thought of they have too. That doesn’t mean they’re right, just that, if they’re not, it’s not because of something “they don’t see”. (2) Greece has been so prostrate over the post 2010 period that only a modest amount reversal is needed to convince Syriza’s public that the government is on its side and doing its best. This is the logic of the 70% offer. Full-scale resuscitation can wait for a few months. Politically, the survival of Syriza’s project depends on being able to deliver some visible improvements, even as small-scale as the rehiring of the cleaning staff. (3) I believe Varoufakis when he says his goal is to persuade European public opinion and not simply to outmaneuver other eurozone governments. But this is also a form of realpolitik under the present circumstances. We have subnational elections coming up in Spain, with the likelihood of a political earthquake. Portugal is fluid, and there are signs of life in Ireland. France and Italy have weathervane governments. The political configuration in the EZ may look different by summer than it does today. The reality is that no government in the eurozone can fully reflate on its own; there needs to be a policy shift at the level of zone institutions to get the job done. This is what YV et al.’s modest proposal was about. Not unreasonably, Syriza hoped that Europe would choose to muddle through for a few months, after which Syriza’s position would be stronger internally and externally. This might not work out, but strikes me as at least plausible under the circumstances.

    1. Glenn

      I agree your assessment of point 2 is a very hard one to overcome. The current agreement has Greece going from a primary surplus of 1.5% in 2014 to 3% in 2015 and 4.5% in 2016. SYRIZA, to get your point, has to get the Trioka to forgot about the 2015&6 targets and give a little on the 1.5%. Very hard given the Trioka’s attitude which, probably not incidental, driving their motives and attitude.

    2. Calgacus

      Thanks for the welcome summary. The biggest longterm problem seems to me to be some of Syriza’s & Varoufakis’s doomsaying of inevitable costs of separation from the Eurozone to Greece and to the rest of the Eurozone. Lapavitsas, Weisbrot, Mosler & others are more realistic. Lascaris is wrong on Lapavitsas moderating his tone significantly IMHO – he published a book & interviews urging Grexit in a couple weeks ago. The capitulation seems to be overstated. I believe & hope that Syriza has not changed its overall strategy. For even Varoufakis in 2014, put the probability of eventual separation from the EZ at >50%, and last month said “we’re ready for an austere existence, which doesn’t mean austerity” – many don’t seem to take those words at their natural meaning.

  13. jkiss

    Yanis has so far been perfect fit, i.e. both he and Greek public think leaving is worse than staying. So apparently staying is better while running a 1.5% surplus (as of last year.) Will this be true this year (3%), and/or next year (4.5%)? If not, what surplus, if any, is too much? As an aside, what was Romania’s when Romanians ate chicken feet as they exported chickens? Anyway, who’s view will change first, the population or Yanis?

    Imagine Greece signs whatever Germany wants, the program resumes. Greece population reflects on EZ brotherly love and 3% reduced spending this year, 4.5% next year.
    Then, say next week, Syriza calls a referendum asking if greece should stay or leave. What will EZ do as we wait for vote?
    a) stop funding Greek banks (democracy is not allowed to function)
    b) continue funding banks

    How will the vote go?

    From a tactical perspective, should syriza begin making preparation for grexit, e.g. printing drachmas, suspecting it will not be possible to keep it confidential? Presumably there is nothing illegal within EZ for a country to print old currency, say for souvenirs, so long as it is not distributed?

    I suppose if you wait for all the young people to move to Germany the pensioners that remain would not vote for exit?

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