The IMF Undercuts the Whole anti Tsipras Narrative

     Sumner is declaring himself over the Greece-EU standoff. He's close to ready to do a Pointius Pilate-wash his hands of it. 

      "Chris Giles and Alex Tabarrok each have excellent posts on Greece.  BTW, three days ago I assumed that a yes vote meant Syriza is gone, and a no vote meant Grexit.  Now people are saying that neither assumption is true.  Perhaps soon I’ll just tune out this issue, as I did the Israel/Palestinian issue 20 years ago, when I realized that every single press report about “important new developments” was a lie.  Nothing important has happened in Israel for many decades, and I have no intention of wasting time reading news reports on that country.  If Greece becomes like Israel, I’ll just stop caring."

    http://www.themoneyillusion.com/?p=29832#comments

    In a way this is understandable-the Greek crisis like Israel/Palestine just does on and on day after day, month after month, year after. In another way, it's nice to have the luxury of tuning it out. If you're a Greek person suffering through lower GDP per capita than 1994 you don't have the luxury of stopping caring. 

    Of course, while the analogy with Israel works in the sense that both seem to be relatively interminable debates at interminable impasses the Middle East conflict is very different as well. At least Greece isn't physically at risk every day of a terrorist attack or do people have to worry about becoming collateral damage. 

  The link to Giles-through experience I know I probably won't care for what Tabarrok has to say-was a piece where Giles takes the posture that the Greeks are naughty children who need to be punished for the sins of Tsipras who has become Public Enemy for the Very Serious People who reflexively take the side of the EU over Greece. 

  "In another act of solidarity, creditors have made it perfectly clear that further debt relief will be on offer once Greece implements the lending conditions to which it says it agrees. This is a perfectly sensible attempt to reward good behaviour on the principle that you do not give treats to a misbehaving child."

   "None of this is good enough for Syriza. Mr Tsipras is calling on the Greek people to vote against the offers made by the creditors in Sunday’s referendum, hoping that the terms will magically improve."

    "His explicit threat is to bring everyone else in the eurozone down with him should creditors decline to meet his demands. They will refuse, and rightly so.

     http://www.ft.com/intl/cms/s/0/1f036eb8-209b-11e5-ab0f-6bb9974f25d0.html?siteedition=uk#axzz3elEGiG6e

     Maybe this explains Tsipras' 'childish' demands. He's tired of his people being treated like children. Meanwhile despite the hard line Giles takes here, 'bad behaviour' seems to be being rewarded:

     "The International Monetary Fund waded deeper into European politics on Thursday by urging the eurozone to provide Athens with comprehensive debt restructuring and much of the €60 billion ($66.6 billion) needed to return the country to health in a new bailout."

   "The IMF’s estimated Greek financing needs and strong call for Europe to give the country debt relief could influence the referendum, as it clearly outlines the political and economic sacrifices Germany and other eurozone creditors would have to make simply to meet terms proposed last week."

     http://www.wsj.com/articles/SB10130211234592774869404581083940950708966

     See, you hate to say it, but the lesson here is more or less the opposite of what Giles thinks it should be-Greece is a naughty child who can't have any pudding until it apologizes. Greece just defied the IMF by defaulting on a payment due Tuesday, June 30.

    I mean it's not really defiance just that they lacked the money to pay. So how does the IMF 'reward' this defiance? By demanding they get debt relief. 

    When you look at Greece's incentives they are more or less the opposite of what those warning the Greeks not to vote no on Sunday imagine it is. Let's again consider Sumner's bewilderment:

   "BTW, three days ago I assumed that a yes vote meant Syriza is gone, and a no vote meant Grexit.  Now people are saying that neither assumption is true."

    I think the way to look at it is that Sumner's initial assumption is what the EU pundits want to convince the Greeks of. After all, the Greeks in polls say they don't want to leave Greece. 

    However, they also don't want more austerity or at least want to ease up on it considerably. So Sumner's first assumption is the narrative the Greeks are supposed to believe. The claim that neither is true is Tsipras' argument. 

   He argues that a no vote doesn't necessarily mean Greece is off the euro. If this is true then the Greeks want to vote no. This vote is about who runs their country-the paternalists like Giles' friends in the EU or the Greek people. 

   http://diaryofarepublicanhater.blogspot.com/2015/07/the-eu-and-tsipras-battle-over-framing.html

   For so many years they have been disenfranchised so it will be a real shame if they give back control after so recently getting it. Tsipras then is doing exactly what the Greeks elected him to do: take back control of their own country.