Larry Elliott Economics editor Wednesday 1 July 2015
Greek prime minister understands that the next few days are a matter of winning hearts and minds and that he needs to rally support for a no vote
Ballot paper for 5 July referendum, in Athens, Greece. Many Greeks are worried about the prospect of going back to the drachma: Tsipras’s latest proposals are designed to show that he doesn’t want that either. Photograph: Simela Pantzartzi/EPA
Alexis Tsipras chose his moment well. What better way to shift attention from the fact that Greece was about to miss a debt payment to the International Monetary Fund and lose its financial lifeline from its creditors than to come up with a new crisis-resolution plan?
It little mattered that the new blueprint from Athens had a shelf life of only a couple of hours before Angela Merkel said there could be no fresh negotiations until after Greece’s referendum on Sunday.
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The plan put forward by Tsipras was actually pretty clever. It involves extending Greece’s current second bailout, which expires on 30 June, so that it can solve its pressing cash flow problems, and then having a third bailout lasting two years that would include debt relief.
But the letter from Tsipras to the chairman of the Euro group of finance ministers, Jeroen Dijsselbloem, made no mention of whether Greece was prepared to accept any of the harsh measures demanded by the European Commission, the European Central Bank and the IMF, and he must have known it was only a matter of time before Merkel said nein. She did not wait long.
Somehow or other, Greece’s debt burden will be reduced. It can happen through a deal in which Athens gets debt relief for economic reform. Or it can came through a default that would swiftly follow Greek exit from the single currency. Everybody knows this, and it is bizarre that an explicit proposal for debt relief was not formally made to Tsipras in last week’s talks. There was too much stick and too little carrot.
But events have moved on. Greece’s Euro group partners want to see the result of the referendum before starting new talks. They believe there is a good chance Tsipras will lose the vote, and that his government will fall as a result.
So why did Tsipras bother? Simply, he understands that the next few days are a matter of winning hearts and minds and that he needs to rally support for a no vote. One way of doing this is to be the man with a plan seeking to find a solution even at this late hour. Many Greeks are worried about the prospect of going back to the drachma: Tsipras’s latest proposals are designed to show that he doesn’t want that either.
His task is made easier by the approach taken by the other side. Jean-Claude Juncker, the president of the European Commission, had nothing to offer in his press conference on Monday. Leading politicians in Germany, Spain, Italy and France have lined up to warn Greeks that if they vote no it will mean leaving the euro. There were reports from Greece on Monday that businesses were threatening employees with the sack if they refused to go on a rally in Athens organised by the yes side. Faced with Project Fear, Tsipras wants to be seen as Mr Reasonable.
It might not work. Project Fear, after all, secured a victory for the anti-independence camp in the Scottish referendum on independence. But what Tsipras has done is seize the initiative, something he has proved adept at doing in the five months since he won the Greek general election in January. He has run rings round the troika and continues to do so.
Alexis Tsipras: Mr Reasonable seizes the initiative from Project Fear | Business | The Guardian
