Greek Game Theories

1 February 2015

The conventional wisdom about Syriza’s goals may be completely wrong.  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 questionable assumption. While its leaders may indeed be acting in rational self-interest, the consensus view that the party’s primary goal is just to obtain a significant loosening of its creditors bit is unsupported by its actual statements and post-election actions. If another goal is actually paramount, such as its repeatedly-stated intent to force the convocation of a full sovereign member conference in order to reconsider all borrowers' debt agreements, 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. (1

The paternalistic assurances offered by EU officials have become offensive in their implied assumption of the stupidity of their audiences.  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, cavalierly 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”.(2)  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.”(3)

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 at the margins.  It has publicly taunted EU officials and members, Germany in particular, with highly impolitic statements and targeted actions designed to inflame rather than reassure. Instead of concentrating on its assumed goal of obtaining debt relief for its constituents, it has instead focused its energies on spreading its radical 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.(4

Multiple facts inconsistent with the mainstream view clearly signal that Sryiza has supranational ambitions and intends to decimate as many of the present debt rules as possible, as quickly as possible.  The blithe assumption that it has no choice other than to come to terms with the Troika of its creditors 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, such as:

• Syriza means exactly what it says and is in reality quite willing to risk expulsion, in which case it reasonably believes it could claim the mantle of victim and seek extraordinary worldwide assistance;

• Syriza's 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 really 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 (for 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 people who have vested financial and political interests in parroting the party line, but objective observers of recent developments might consider that the first representative of a foreign government received by the new Greek government, on the very 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).

Further significant facts bear consideration as well: Russia was subject to EU sanctions at the time of the above meeting; Mr. Tsipras thereafter publicly objected to the EU’s planned issuance of new sanctions against Russia; the EU was subsequently forced only to extend existing sanctions instead of adding the new ones; Greece’s new defense secretary previously stated that his party “supports President Putin and the Russian government”; Syriza’s manifesto calls for Greece to leave NATO; and in a recent interview, Russian Finance Minister Anton Siluanov gratuitously stated that “Russia would consider giving financial help to debt-ridden Greece” in the event that country asked.(5)

The party line that has been offered by virtually every EU politician and repeated without inquiry by most commentators is 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 compromise.  However, even a cursory review of the actual statements and actions of Syriza gives reason to question the validity of the assumptions upon which that soporific assurance rests.  In this observer’s opinion, those assumptions are very likely to be shaken, very soon.  


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

F. Emmett Fitzpatrick, III is an attorney, author, and longtime observer of Europe, based in the suburbs of Philadelphia, Pennsylvania, US.  On occasion he uses this space to comment on matters of particular interest.  

Contact:  feedback@eurnet.com.

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(1) See “Eurogroup Chairman Dijsselbloem: No Plan for Grexit”, Toby Sterling, Reuters.com, 26 January, 2015.

(2) Valdis Dombrovskis, Vice President of the European Commission, as reported in “Europe Hints at Greek Bailout Extension”, Mark Thompson, CNN.com, 30 January, 2015.

(3) Id.

(4) See “Anti-austerity Anger Sweeps from Greece to Spain as Hundreds of Thousands March Through Madrid in Support of Fledgling Radical Leftist Party”, 31 January 2015, Corey Charlton for MailOnline.

(5) See “Greece Misinterpreted Over Russia Sanctions: Minister”, James Mackenzie, Reuters.com, 29 January 2015; “Russia's Sanctions Hand the Advantage Straight Back to Debt-Laden Athens”, Liam Halligan, Telegraph.com, 31 January 2015; “Russia Extends Olive Branch to Greeks”, Geoff Cutmore, Jenny Cosgrave, 30 January 2015, CNBC.com. 

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