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I think her conclusions do follow from her premises:

  • Greece is running out of money and needs funding right now.

  • The people who Greece has to convince to get funding is the Eurogroup.
  • If those hold true then yes the memo was total surrender since they conceded the right to evaluate their reforms to the institutions. This also turns their later communication strategy incoherent.

    But do they? On the second point I clearly disagree. I'm more than halve convinced that the Spaniards would advocate blocking the ports and bombing the population centers if they could be seen as doing so. What limits the Euros' action phase is public perception and fear of an exit. At least Schäuble would have no future if he is seen to push Greece out of the Euro and then demands the 300 billion hole in the ECB's balance sheet be filled by fresh tax money. Which he probably would since he is a believer.

    On the second I also disagree. A default in and of itself is no problem, except if used by the ECB to force capital controls. And at least in the case of the IMF the Greek position is that the ECB should just hand over the two billion they owe them to the Fund. If the ECB refuses and than uses the resulting default to murder the payment system they really need to be in control of the media narrative. Because otherwise that looks like a carrier limiting move.

    Finally I think she puts too much importance on the exact language used since in private sector negotiations everything you say can resurface in court. Here the only court that matters is the one of public opinion.

    by generic on Tue Mar 3rd, 2015 at 04:22:23 AM EST
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