Greece's Boxing Match with the EU and its Troika - Let's Get Ready to Rumble

Ladies and gentlemen, in the right-hand corner of the ring we have Alexis Tsipras and his Syriza party, who have just swept into power in Greece and in the left-hand corner, we have the EU and its Troika. Syriza, which having fallen short of an overall majority has formed a coalition government with rightwing populists also opposed to austerity, has made debt reduction and renegotiation of the bailout agreement a priority. Alexis Tsipras, who seems to be the political equivalent of a young, energetic Cassius Clay, in his heyday – he deftly moves like a butterfly, but stings like a bee: while the EU and its troika is ever more seemingly to appear like that of an outdated and past its sell by date, equivalent of a very rusty Rocky Balboa.

Ladies and gentlemen, “Let’s get ready to rumble.”  As boxing’s internationally famous commentator, Michael Buffer would say.

And, we’re off with the first blow already having been landed, against the EU’s Troika, by Greece’s new Finance Minister, Yanis Varoufakis, who said last Friday that the new government will refuse to engage with auditors from the European Commission, the European Central Bank and the International Monetary Fund – otherwise known as the “Troika.”

Standing his ground after talks in the capital with Jeroen Dijsselbloem, head of the eurogroup of EU finance ministers, Yanis Varoufakis said Greece would not pursue further negotiations with the body of technocrats that has regularly descended on the country to monitor its economy.

Neither would it be rowing back on election-winning pledges, by asking for an extension to its €240bn (£180bn) bailout programme. “This platform enabled us to win the confidence of the Greek people,” Varoufakis said, insisting that the logic of austerity had been repudiated by voters when the far-left Syriza party were overwhelmingly swept into power, by the Greek electorate – fed up of five years of the EU’s troika-imposed austerity measures; in return for receiving a post 2008 global, economic crisis, bailout loan.
Varoufakis and the new Greek prime minister, Alexis Tsipras, who also met Dijsselbloem on Friday, are adamant that the government will deal only with individual institutions and on a minister-to-minister basis within the EU. They have vowed to shun auditors appointed by the troika of the EU, the European Central Bank and the International Monetary Fund.

“Our first action as a government will not be to reject the rationale of questioning this programme through a request to extend it,” quipped Varoufakis. “We respect institutions but we don’t plan to cooperate with that committee,” he said, referring to auditors who run the rule over Greece’s books on behalf of the three lenders.

An internationally renowned economist, Varoufakis has been an outspoken critic of the austerity measures demanded in exchange for the aid that has bolstered Greece since its economic meltdown.
With the new Greek government having landed the first heavy-weight blow, against the EU’s troika, since taking office last Monday,  a visibly stunned-looking, Dijsselbloem – the Dutch finance minister – said it was imperative that Athens did not lose the headway that had been achieved.

He reiterated that the creditor group expected Greece to honour the terms of its existing bailout accords. “I realise the Greek people have gone through a lot. However, a lot of progress has been made and it is important not to lose that progress,” he said. “We both want Greece to regain its economic independence as soon as possible. It is of utmost importance that Greece remains on the path of economic recovery. Taking unilateral steps or ignoring previous agreements is not the way forward.”

Wolfgang Schäuble, German finance minister, warned Athens on Friday against trying to “blackmail” Germany with its financial demands.

Mr Schäuble said Germany was ready to co-operate but only on the basis of current agreements. “We’re prepared for any discussions at any time but the basis can’t be changed,” he said. “Beyond that, it is hard to blackmail us.”

Martin Jäger, the German finance ministry spokesman, said any request for an extension of the existing financing programme would only be acceptable when it was “tied with a clear readiness of Greece to implement the agreed reforms.”
The Troika is surely going to have its hands full with Yanis Varoufakis, an economics expert, and it would seem that Alexis Tsipras picked Varoufakis precisely because of his skills at economics game-theory strategy. He wrote the excellent book, “Game Theory: A critical text,” which is available for free download in pdf format.

The existing bailout agreement, with Greece, comes to an end in late February of this year and it is interesting to note that there now seems to be an olive branch in the offing to Greece’s newly-elected anti-austerity government, by hinting it may extend the massive financial aid beyond the end of February.

So, maybe there is something to be said for the old adage, “Owe the bank five pounds and you’ve got a problem. Owe the bank several million, and the bank’s got a problem”.

The eyes of Spain and Portugal have taken up all the ring-side seats, around this Greece vs., the EU and its Troika’s team boxing match. Round two is about to start very soon.  The gloves are off – as are the bets, as to which way this slugging match is likely to go, from this point on.

Could it all end up being be a “Grexit” stage right – right out of the exit door…right out of the EU, for Greece and if so…??? What could be the fallout from that?

This boxing match is definitely set to rumble on for a long while yet.

by Victor Romain