The beginning of the end for Greece?

Naked Capitalism has been quite pessimistic on the prospects of Yanis Varoufakis to turn the situation around, despite his considerable skills in economics and game theory. Some links on this (in chronological order):

Syriza Walks Back Initial Defiance

The ECB Ready to Put a Choke Chain on Syriza

Greek Finance Minister Varoufakis Retreats on Debt Writedowns, Public Spending Promises

The ECB now decides to play hardball. The most important thing that Greece needed was time. Time to negotiate, time to build an alternative discourse, time to make connections. The ECB put an end to that hope. The deadline now is the end of the month. Please read: The ECB Tightens the Choke Chain on Greece

With a bank run underway and funds unlikely to return any time soon, Greece is utterly dependent on ECB support unless it is willing to have its banking system collapse. And that blow in an already prostrated economy is something that Syriza cannot responsibly inflict on voters, particularly when it shifted its campaign in the weeks before election to a moderate, pro-Eurozone posture. The ECB has issued its diktat and Greece has no choice but to fold. Varoufakis may still win some concessions around the margin, but the message is clear: he will get no big breaks on any of his major issues. The most he can hope to get is whatever the Troika is willing to trade for the Syriza’s commitment to taking on the oligarchs and reforming its tax system.

This does not end well. Before you know it, there will be a new election, because the ECB crushed the new government, and then the Greek Nazis will come to power. Well played, Europe.

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