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Greek Game Theories

1 February 2015

    The widespread prediction that Syriza will ultimately moderate its radical demands rather than risk Greek expulsion from the Eurozone, a product of “rational actor” logic, is based upon a highly questionable assumption. While Syriza’s leaders may indeed be acting in rational self-interest, the consensus assumption that the party’s primary goal is to force major debt concessions is utterly unsupported by its actual statements and post-election actions. If another one of Syriza’s stated goals is instead paramount, such as forcing a full Euro-wide debt conference, Syriza could quite rationally calculate that only by sticking to its demands can it achieve that outcome.  

    Syriza has consistently stated that it flatly rejects the present “bailout” scheme and that its intentions involve far more than Greek debt concessions, but European Union officials have gone out of their way to ignore or minimize both its words and acts.  They would be well-advised to pull their heads out of the sand and stop making vacuous statements in the vain hope of soothing financial markets and their own jitters.  If national and EU leaders like Eurogroup Chairman Jeroen Dijsselbloem have truly not even considered, let alone made any plans for, a possible Greek exit, they are manifestly unfit to lead anyone or any group.  

    The inane statements made by EU officials have become truly offensive in their implied assumption of the stupidity of their audiences.  Speaking on 30 January, 2015 – after the Greek government had summarily reversed Troika-imposed strictures and the same day that Syriza’s Finance Minister had defiantly announced that the government would refuse to meet with Troika representatives – Valdis Dombrovskis, Vice President of the European Commission, reportedly dismissed those actions by stating, “[w]e of course are aware that the first announcements of the new Greek government are not necessarily in line with the commitments which Greece had taken”. Similarly, despite Greek Finance Minister Yanis Varoufakis’ emphatic public pronouncement that Greece will refuse to request any extension of its bailout program, Mr. Dombrovskis suggested that “[t]here is probably also some extension of the program needed to allow more time for negotiations.”

    The new Greek government has already defiantly rejected fundamental commitments that were made by its predecessor, and it has intentionally done so in ways that severely limit the future ability of either side to compromise.  It has publicly taunted EU officials and members, Germany in particular, with highly impolitic statements and targeted actions specifically designed to inflame rather than reassure.  Instead of concentrating on the assumed task of obtaining debt relief for its constituents, it has instead focused its energies on spreading its radical leftist philosophies throughout all of Europe. If today’s demonstration by hundreds of thousands of people in Spain is any indication, those efforts have already paid big dividends. 

    Unassailable “facts on the ground” clearly show that Sryiza has supranational ambitions and intends to break as many eggs as possible, as quickly as possible.  The blithe assumption that Syriza has no choice other than to come to terms with the Troika is patently inconsistent with its actions.  That curious dichotomy might compel a thoughtful person to question the received wisdom and consider some out-of-the-box possibilities, all of which are supported by actual facts:

    •      Syriza means exactly what it says (admittedly a very hard concept for many traditional European politicians to accept);

    •    its repeated statements that it wants Greece to remain in the Euro, doesn’t intend to take unilateral actions, firmly believes the outcome of new direct negotiations with EU countries will be fruitful, etc., are  actually very provocative challenges in which it is saying, “we believe you have more to lose than we do; we fully expect you’re going to be compelled to meet our demands; and we’ll be glad to stay in the Eurozone if you do”;

    •    Syriza has or believes it has an alternative “backstop” – Russia;

    •    Vladimir Putin, who has time and again exhibited uncommon (in this age) geopolitical thinking and maneuvering – could at relatively insignificant cost achieve extremely significant, historic, strategic advantages by serving as an alternative financial “backstop” for Greece; and

    •    aside from obvious tangible advantages like access to warm-water ports, such a move by Russia would cause severe turmoil for the EU, NATO, and the US, all of whom are presently waging financial and public relations wars against Russia.

    The above possibilities will undoubtedly be dismissed by many people who have vested financial and political interests in parroting the party line, but other observers of recent developments might consider that the first representative of a foreign government received by the new Greek government, on the first day that Prime Minister Alexis Tsipras was sworn into office, was the Russian ambassador (an event which had to have been arranged well in advance); that Russia was subject to EU sanctions at the time; that Mr. Tsipras thereafter publicly objected to the EU’s planned issuance of new sanctions against Russia; that the EU was subsequently forced only to extend existing sanctions instead of adding the new ones; that Greece’s new defense secretary previously stated that his party “supports President Putin and the Russian government”; that Syriza’s manifesto calls for Greece to leave NATO; and that in an interview with CNBC News on 30 January 2015, Russian Finance Minister Anton Siluanov gratuitously stated that “Russia would consider giving financial help to debt-ridden Greece” in the event that country asked.

    The mainstream “talking point” – that the consequences of a Greek default and departure from the Eurozone would be so horrific for each side that rational self-interest will eventually compel some face-saving compromise – appears to be based far more upon wishful thinking than actual facts.  Even a cursory review of the record announcements and actions of Syriza will compel most observers to challenge the foundational assumptions for the soothing, “nothing to worry about” statements that continue to be issued by self-interested EU officials, financial concerns, and media outlets. In this observer’s opinion, those assumptions are very likely to be shaken, very soon. 

© 2015 F. Emmett Fitzpatrick, III. All rights reserved.