The key players in Greece’s increasingly acrimonious bailout negotiations haven’t yet come to blows. But if they keep talking like this, fists may fly.
In recent days, officials have dispensed with carefully worded legalese and impenetrable financial jargon to hurl invective and insults instead. And they aren’t doing it surreptitiously, via anonymous backbiting in the press. Some of the key players in the negotiations are on record calling each other liars and criminals, among other things. In this environment, compromise seems a distant prospect, however urgent it may be.
Here is a collection of some of the sharpest barbs so far this week:
Greek prime minister Alexis Tsipras let loose with both barrels yesterday, telling a parliamentary group that the IMF bore “criminal responsibility” for his country’s plight. The austerity demanded by the institution in return for loans was part of a conspiracy “to humiliate an entire people” that had suffered enough “through no fault of its own.” But what do you really think, Alexis?
Pierre Moscovici, European commissioner for economic affairs, told a Belgian radio station today that Greece’s creditors weren’t asking for “crazy things” from Athens. More reforms are necessary, he said, because Greece “can’t remain on the margins, like a make-believe economy.” In other words: get real, guys.
A sneak preview of the final report by a so-called “Truth Commission” created by the Greek parliament was delivered today, and pulled few punches. The Greek government’s debts are “illegal, illegitimate, odious, and unsustainable,” it concludes. Canceling them would strike a blow against its bailout lenders, who have conducted a “violent, illegal, and immoral mission” against the country. Enough said.
European leaders outside of Greece are showing an unusually united front, brought together by their impatience with Athens. In a not-so-subtle swipe at Greece’s divisive finance minister, Yanis Varoufakis, German economy minister, Sigmar Gabriel wrote an editorial this week that Greece’s “game theorists are gambling the future of their country.” Gabriel had been one of the friendlier voices towards Athens in Berlin.
Meanwhile, another former ally, European Commission president Jean-Claude Juncker, effectively called the Greek government a bunch of liars yesterday. He prefaced his comment by noting that “I don’t care about the Greek government,” setting the tone. He blamed Tsipras for misleading the Greek public by telling them things “which are not consistent with what I’ve told the Greek prime minister.”
Central banks are famously cautious institutions, remaining steadfastly neutral and avoiding political controversy wherever possible. The Bank of Greece broke from the script in an extraordinarily loaded statement today. A failure to strike a cash-for-reforms deal would “mark the beginning of a painful course,” the bank said. Even if you agree with its analysis, central banks avoid saying these sorts of things for fear of them becoming self-fulfilling:
Failure to reach an agreement would, on the contrary, mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and—most likely—from the European Union. A manageable debt crisis, as the one that we are currently addressing with the help of our partners, would snowball into an uncontrollable crisis, with great risks for the banking system and financial stability. An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.