Krugman vs. Tsipras on the Chances of a Grexit

     Here was Tsipras yesterday after the Troika rejected his latest proposal. 

     "Certain institutions insist in not accepting equivalent measures suggested by the Greek government," Tsipras told his colleagues before departing to Brussels, according to a statement. "The non acceptance of equivalent measures has never happened before. Neither in Ireland nor in Portugal. Nowhere!"

    He added: "This strange stance could be hiding one of two things. They either don't want a deal or they are serving certain interests in Greece."

     http://diaryofarepublicanhater.blogspot.com/2015/06/this-could-have-been-predicted-no.html

     Although that cryptic speculation about 'certain interests in Greece' is a way of saying that he wants a deal but certain elements-some even in his own party-don''t want a deal and the EU is giving them aid and comfort. 

    Krugman sounds very similar to Tspras here. Evidently there is real churlishness about Tsipras on the part of the Troika:

   Talk to IMF people and they will go on about the impossibility of dealing with Syriza, their annoyance at the grandstanding, and so on. But we’re not in high school here. And right now it’s the creditors, much more than the Greeks, who keep moving the goalposts. So what is happening? Is the goal to break Syriza? Is it to force Greece into a presumably disastrous default, to encourage the others?

   "At this point it’s time to stop talking about “Graccident”; if Grexit happens it will be because the creditors, or at least the IMF, wanted it to happen."

     http://krugman.blogs.nytimes.com/2015/06/25/breaking-greece/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body

     While the GOP loves to talk about socialist Europe, the GOP would have no problem with these negotiations it sounds like:

    "This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises. And the Greek government has agreed to what are actually fairly high surplus targets, especially given the fact that the budget would be inhuge primary surplus if the economy weren’t so depressed. But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy."

    "The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity."

     So the IMF is full of supply siders too. 

    P.S. All I can say is that if the IMF is trying to nix a deal-if the goal really is to push Greek out that may still be the best thing to happen to Greece-and the beginning of the end of the euro. Which could itself be a very good thing.