domingo, 21 de junho de 2015

Tsipras of Athens – a gripping drama entering its final act / Larry Elliott / GUARDIAN

Tsipras of Athens – a gripping drama entering its final act

The scene was set for Greece to default on its debts and perhaps tumble out of the euro. But, like all the best plays, there is more than one possible ending

In the film Shakespeare in Love, one disaster after another befalls the impresario Philip Henslowe. The London theatres are closed by the plague. The voice of the male actor playing Juliet cracks just as he is about to go on stage. Henslowe never despairs, and he insists all will turn out well. Asked how, he has a stock answer: “I don’t know, it’s a mystery.”

Over the last week, those who have said a solution will be found to the Greek crisis have tended to fall back on the Henslowe explanation. Talks have broken down. Summits have come and gone. Insults have flown in all directions. The deadline for Greece to make a 30 June payment to the International Monetary Fund has edged ever closer. There has been nothing but bad news. Yet, through it all, the relative calm in the financial markets has reflected a belief that, despite everything, the drama Tsipras of Athens will have a happy ending.

The plot has moved on rapidly in the past 72 hours. The scene was set for Greece to default on its debts and perhaps eventually leave (or be forced out of) the euro when a meeting of finance ministers from the 19 countries that use the single currency broke down acrimoniously on Thursday. Christine Lagarde, the IMF’s managing director, did not really need to say that it was time for “some grownups in the room”: the lousy body language was clear from the photos of the meeting.

But negotiations in Europe rarely end. Instead, they are resumed at a later date, and so it was agreed that eurozone leaders would hold a summit on Greece on Monday following yet another meeting of finance ministers earlier in the afternoon.

On Friday, Europe turned the screw. The European Central Bank announced for the second time in three days that it was providing emergency finance to prop up the Greek banks. But Frankfurt was not over-generous: the lifeline was only long enough to cover the period up until Monday’s summit. The implied threat was clear: do a deal or we cut off the money and your banks go bust.

This classic example of the iron fist in the velvet glove appears to have worked. Although the three main actors in the Greek crisis have sometimes given the impression that they cannot stand the sight of each other, none actually wants the euro to lose a member. Alexis Tsipras is a conflicted politician: he thinks an end to austerity is needed if Greece is to start climbing out of the deep economic hole into which it has disappeared over the past five years. But he knows that, by a large margin, the Greek people want to stay in the euro. The price of staying in the euro may well involve swallowing fresh austerity measures.

His co-star, Angela Merkel, is also torn. The German people are fed up with writing cheques to bail out Greece but remain committed to the European project. Merkel does not want to be held responsible for the disintegration of the euro. Nor does the main supporting actor, Jean-Claude Juncker, who has just taken over as president of the European commission, and whose reputation as the fixer-in-chief is on the line.

As a result, talks have been going on all weekend to see if a compromise can be reached. These negotiations have been influenced by Russia and the United States, more accustomed to lead roles but on this occasion lower down the billing. Tsipras has been flirting with Putin, something that has not gone down well with Barack Obama. Washington has made its feelings known.

So what might the deal look like? The usual can-kicking exercise, in all likelihood. In Brussels, the talk is of Greece being prepared to offer some compromises on pensions and tax in exchange for enough money to meet its immediate needs, along with the promise of debt relief later provided it sticks to its reform programme. This would resolve little. Greece’s economy will continue to struggle, the government will go slow on reform, and its bailout money will be depleted. Tickets for the new autumn production of the drama will shortly be going on sale.

Tsipras now has a big decision to make. Clearly, the creditors would be getting more out of this game of give and take than he is: they are not demanding the full pound of flesh but something quite close to it. If he folds, he will have big political problems at home. If he remains defiant he will have a bank run to contend with by Tuesday morning. Like all the best plays, there is more than one possible ending to Tsipras of Athens. The stage is set for a gripping final act.

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