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.

~~~

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.