On the ongoing Greece bailout saga...

The Greece's bailout saga is indeed much more amusing to watch than any other reality TV shows (none of which I don't watch). The blow-by-blow update of main media of the negotiations, the constant leaks to the media of details about various various characters involved (and there have been many), are truly fascinating to watch.

A week has gone by, and we have yet another oneupmanship in the negotiation.

The date to watch is 06/30/2015 (Tuesday), two days from now, that's when Greece is due to repay IMF 1.6 billion euro in borrowing. Greece, having no money left, is dependent on another tranche of 7.2 billion euro bailout to come from EU to come through, so that Greece can make the payment. Failing that, Greece will be considered in default, and its membership in euro in peril.

The troika (EU, IMF, ECB) has been in negotiation with Greece to nail down the necessary reforms and implementation plans that they deem necessary in order to bring Greece's economy back to some kind of steady state. Since Greece has been so dismal in collecting taxes, and given that six years have passed, and successive Greek governments are still unable to raise any meaningful revenue through reining in tax collection or implementing any structural reforms, there really is not much credibility left in Greece.

Given more than six years since its economy collapse and two bailouts from the troika that's worth more than three hundred billions of euro, Greece is effectively still on downward spiral. The Greek people, in essence, have thrown up their hands and said, enough is enough. They threw out the previous government and voted in the left-leaning Syriza party, on the basis that Alexis Tsipras (their PM now) promises to end the austerity mandated on Greece. I don't know if anyone in Greece ever thinks about how Syriza could deliver on that promise. But, such is the power of hope and change, never mind the details. This was January 2015.

Fast forward it to 06/27/2015. Syriza has succeeded in antagonizing pretty much everybody whose goodwill Greece would need to grant the next lifeline in the second bailout. The impasse essentially means the creditors from the troika would not budge. Greece has to either take it or leave it, about the creditors proposal on required reforms. Rejecting the creditor proposal by Tsipras outright would mean that Greece will default on 06/30/2015, and it will almost certainly mean ECB will no longer send more ELA funding to prop up Greek banks, and Grexit as well.

Tsipras did yet another stunt. He announced that he would call a 07/05/2015 referendum vote by Greek people to vote (up or down) the creditor's proposal (which deadline would have been 06/30/2015). And Tsipras recommends Greeks to reject the referendum (ie. reject the creditor's proposal).

I almost laugh when I read this latest Tsipras' stunt. What can this possibly accomplish? Being the leader and a democratically elected government of Greece, he effectively did not want to vote the blame for rejecting Greece out of euro (which is not what Greeks want). But he has been unable to deliver on his own campaign promise to push back on the anti-austerity package from the troika, and he would not admit personal defeat. So, he pushes the issue back to the people to vote on something (the creditors' proposal) that is totally meaningless because that same proposal would lapse on 06/30/2015, even if the Greek people voted yes to it.

In other words, Tsipras is not man enough to admit defeat and accept the creditors proposal, because he knows he could not sell the same proposal to the Greeks, thereby breaking his campaign promise. But he is not man enough either, to reject the same proposal because the Greeks would then turn on him and blame him for pushing Greece out of the eurozone.

Tsipras has put himself between a rock and a very hard place, he doesn't want to choose, and he doesn't want to take the blame. So, he's throwing the ball back to the Greeks to make that call. If the Greeks vote to accept the creditors proposal, the Greeks cannot blame him for pushing more austerity measures down their throat. But if the Greeks vote to reject the proposal and Greece is pushed out of eurozone (with the certain disastrous consequence of a near worthless new currency that Greece has to introduce in place of the euro), then the Greeks cannot blame him for Greece losing euro either because, voila, they make the decision, not him!

And even if the Greeks vote yes to accept creditors' proposal on 07/05/2015, the proposal would already have lapsed on 06/30/2015, so the referendum vote is totally meaningless. Tsipras has requested yet another delay of the IMF payment deadline from 06/30/2015 to 07/05/2015 to accommodate his stunt, but as the EU finance ministers (in the EC) have unanimously condemned this stunt, there really is no point for the deadline extension because it's all just a farce.

Why would Tsipras do that, if only to ensure that, win or lose, Tsipras can continue to keep his position in power in the Greek government. He doesn't give a damn about whether Greece is in or out of the eurozone now, because either way, he would stay in power.

Germany and other eurozone member states have all hardened its stance, and rightly so. The way that Tsipras and Greece have played with fire, throwing temper tantrum, and expecting to have their ways cannot and should not be awarded with what they want. If anything, everyone knows full well that even if this latest tranche of 7.2 billion euro in bailout money from the troika is to come through, it won't last that long anyways. A few months from now, they would have to go through the same farce (that they call it "negotiation"), the same reality TV performance.

It's time to wrap it up. Just go, Greece, and leave the eurozone, if you still have an ounce of dignity left in you. Putin might commiserate with you over a glass of vodka.

I'd wager a bet though, that however meaningless this vote on the referendum, the Greek people are going to blink and vote yes to swallow the austerity package in the creditors' proposal in order to stay in the eurozone and buy themselves so more time and even more funding from the troika.

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PS: If Iceland is any guide to a life outside of euro, and how a collapsed economy could restart and come back again, it should provide some light to the end of the tunnel for Greece, that when there's a will, there's a way, and that Greece does not necessarily have to cling onto Germany (while thrashing Germany at the same time, ironic enough) for life support.

On the Greek financial crisis, Grexit, et al...

I know I shouldn't be treating it as a dark comedy, but that déjà vu of the Greek financial crisis since 2008, the endless bailout and numerous deadlines, the slo-mo train wreck, is almost comical in its own twisted way. Seven years and two bailouts later, we are still talking about bailouts, Greece is still asking for more money without so much as a commitment to reforms or concrete plans of it, the troika is still pushing for reform plans and not getting it, Germany is still getting blamed for being too harsh on Greece (and in some instances insinuated as enabler to allow Greece to borrow and live beyond its means).

No wonder no one (not least the Greeks) is taking these threats (of Grexit) seriously. Afterall there will almost always be some last minute, hail-mary pass to allow Greece to kick the can down the road for a few more weeks (or months), and then the whole thing will flare up again, without fail. Suddenly someone would say, let's take Greece's plan "at face value", and everyone can go back to their nightly prayers that the Greeks would do what they say they would do (which almost never happens), and then all the eurozone countries would express dismay, yet again, at how Greece fails, once again, when the next deadline comes along. There will be lots of tsk-tsks, lots of disappointment, the "negotiations" will start again. And so it goes.

All the while, investors would trim their exposure to Greece. Seven years on, it's highly doubtful Grexit would have much contagion to speak of, except that the troika would have to write off those few hundreds of billions of euros that they have collectively poured into the Greece sinkhole. Would they throw more good money after bad into that same sinkhole?

Yes I do get it, that euro (as a general integration project of eurozone, as an experimentation of monetary integration of euro as a currency) is huge and messiness comes with the territory. But if you ask even a 5-year-old, you would get the same commonsense response, "yes, but why can't I have that?" (substitute whatever "that" is, as an alternative, when what they ask for is not working). Therein lies the biggest problem, there is no Plan B. Everyone knows the risks, everyone wants to start the party in 2000 (when euro was introduced), nobody wants to play the devil's advocate of what-ifs. Every country, if only for the sake of "democracy" on paper that each and every country in the eurozone would be treated as the same, both in voting rights and also in their state of economy (the latter of which of course is beyond anyone's wildest fancy to ever be true). And of course the strong economy in Germany is not the same as those in Greece, or Portgual, or Poland, for example. No one wants to point out that obvious fact. So, the whole eurozone is now playing catch-up with the what-ifs, and still no one would accept the possibility that the what-if scenario (of Grexit) could, and probably should, happen. 

I used to say to my kids when they were little, that if they try to do the same thing the same way and get the exact same results, three times in a row, then they need to adapt and learn. Either the way they do it has to be modified, or that the expectation of results should be adjusted. Is this too much to ask for from the eurozone as a whole? Greece would not accept that reality. But as the IMF chief has put it aptly, they need to have dialogue with the adults in the room. Apparently Greece still doesn't have any adult in the room, and they refuse adult supervision. To the Greek PM Tsipras, there is only one line, "I know what I want, I want it now."

And while we're on Tsipras, what kind of idiot or amateur he must be, for on the one hand, push and prod EU to give Greece yet more money, yet on the other hand, thrashing and biting the hand that feeds him (and his nation) by thumbing his nose to eurozone by pledging solidarity with Russia, for example, when Europe is considering imposing more sanction for the Russian invasion of Ukraine. He must be feeling very sore by now, for dancing the PR dance to the Putin tune, yet no money is forthcoming. If there is a sure way to commit suicide, this would be it. Indeed I'm surprised that ECB is still willing to up the ante in propping up the collapsing Greek banks via ELA. If I were German taxpayer, I would have told Tsipras and Varoufakis to go eat dirt.

I know I sound harsh, and I do appreciate the hardship that the Greeks have endured. But as the saying goes, you take the good with the bad. Anyone with an ounce of sanity or sense should realize that they can't be expecting to enjoy the party time when euro was flying high (and Greece and everyone else in PIIGS in particular were borrowing on the credit of the Germans who seemed to be the only one living within its means and not borrowing like there's no tomorrow), without the expectation that there's something called gravity, and whatever that goes up can come down too. Yes yes, hindsight is 20/20, but if the Greeks are idiotic enough not to see through that simple rule in life, no one can help them.

Tsipras and Varoufakis (one of the earlier point man in the Greek negotiations with eurozone) are a prime example of what not to do when it comes to begging aggressively. No one hears Greece complaining about Germany when the latter was effectively underwriting borrowings in euro; afterall who in their right mind would treat the strong economy of Germany and the weaklings like Greece and Portugal to be the same - with it, the same low interest rate - but voila, with the use of the same common currency of euro, they were all treated as "equals" which is most insane. When times are bad, Greece demands $300B from Germany as nazi reparation. History aside, and while Greece might really have a case, asking your creditors to pay you when you're supposed to be paying back in the other direction is not the way to go about it. There was thinking circulating among the Greeks too, that Germany wants to re-enslave other European countries with money. Notwithstanding the fact that Germany had indeed started not just one, but two, world wars, it's hardly a fact that Germany was holding a gun to the Greeks' heads, forcing them to borrow hugely in euro before the 2008 meltdown. This is in fact the same kind of twisted argument by those subprime mortgage borrowers in US and elsewhere, who would blame banks for lending to them, so that they can continue to use their property as collateral like piggy-bank, given the prices-can-only-go-up expectations of the property market.

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For what's worth, I'm getting so tired of reading about Greece, its bailouts, its suffering, and the rest. If I were Merkel, I would have told Tsipras to go right ahead with Grexit. No one is standing there to stop the Greeks. There is no more needs for bailouts, there is no more complaint about subjugation, you are your own man and should stand on your own feet. Be a man, for a change. Afterall Greece has lots of pride to sustain it. We'll see how Tsipras' Plan B (in aligning with Russia and China) would turn out, and see how those totalitarian regimes would give a rat about the suffering in Greece.

As the bargaining chips of Greece are diminishing in value (and the risk of financial contagion of Grexit greatly diminished these days), the moment of truth is fast approaching. Greece, its being the cradle of a great civilization upon which the different cultures in Europe and beyond were nurtured, is fast becoming irrelevant to the rest of the world. If Greece really wants to be taken seriously (not only by its eurozone member neighbors, but by the rest of the world as well), its people really have to show some grit (as others like Spain and Ireland have done in toughing out the financial crisis since 2008). Otherwise they are nothing more than whiny babies.