Re:Behind Germany’s refusal to grant Greece debt relief
by vidarh on Saturday July 11, 2015 @08:55PM
(#9872158)
I don't think you're right that game theory did not work out for them.
Your assumption appears to be that what they could hope for was a reasonable deal. But the way Schäuble has acted, it is by now clear that a reasonable deal is unlikely to be possible. For Germany this is all about ideology, not about economic rationality (amusing they accuse Tsipiras of being too ideological).
In that instance, what could they hope for? Their winning scenario is to demonstrate to their own constituency that they've tried everything. They've stretched extremely far. They've demonstrated to their home audience how Germany wants to humiliate them rather than get a fair deal.
They've further managed to create substantial cracks in the Euro group facade, with France in particular now openly having taken their side.
If they exit, then it is clear the Euro must be reformed if it is to survive.
They may in the end have permanently tarnished Merkel's and Schäuble's political legacies. Justifiably so.
Would any of this have happened if they had played ball and agreed to a toxic, unsustainable deal? The previous Greek government played ball, and what they got was a death sentence for the Greek economy. Playing ball with these opponents is a bad idea, since they seem intent of kicking in your knees first.
> It is a little bit if your wife threatens you with divorce and you say: OK, let's do it.
If you're told that to stay you will need to subject to daily beatings, then divorce is the right choice.
Your assumption appears to be that what they could hope for was a reasonable deal. But the way Schäuble has acted, it is by now clear that a reasonable deal is unlikely to be possible. For Germany this is all about ideology, not about economic rationality (amusing they accuse Tsipiras of being too ideological).
In that instance, what could they hope for? Their winning scenario is to demonstrate to their own constituency that they've tried everything. They've stretched extremely far. They've demonstrated to their home audience how Germany wants to humiliate them rather than get a fair deal.
They've further managed to create substantial cracks in the Euro group facade, with France in particular now openly having taken their side.
If they exit, then it is clear the Euro must be reformed if it is to survive.
They may in the end have permanently tarnished Merkel's and Schäuble's political legacies. Justifiably so.
Would any of this have happened if they had played ball and agreed to a toxic, unsustainable deal? The previous Greek government played ball, and what they got was a death sentence for the Greek economy. Playing ball with these opponents is a bad idea, since they seem intent of kicking in your knees first.
> It is a little bit if your wife threatens you with divorce and you say: OK, let's do it.
If you're told that to stay you will need to subject to daily beatings, then divorce is the right choice.