Today's Must-Must-Read: Daniel Davies: Greece--The Next Steps and Scenarios

Must-Must-Read: Daniel Davies: Greece--The Next Steps and Scenarios: "Is there unambiguous political support in Euroland...

for doing what is necessary to keep Greece in the Euro? No. Is there enough goodwill to support a bridging effort to buy time for detailed discussion of how much money Greece needs and how much control the lender countries want to keep? Yes. Is it natural for the Greek side to use that bridging period to create ‘facts on the ground’? Yes. Are the institutions going to let them get away with that? No. That would be my capsule summary.

Because the guts of the political argument are that in the longer term, the lenders need to a) understand that they have to come up with enough budget financing to put Greece back on a sustainable economic path, and write off past debts, and b) to be given confidence that if they provide such financing, it will actually be used to put Greece back onto a sustainable path, rather than spent on propping up clients and passing a few more years in the pretence that the 2007 peak was ‘normality’. And in the short term, the best way of establishing whether b) is true is to find out if the Syriza government are capable of delivering on negotiated promises, or whether they are going to constantly talk about ‘red lines’. So between now and July, we need to find out what the democratic mandate Syriza keeps talking about actually means...

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