by MYLES UDLAND published at http://www.businessinsider.com
FEB. 19, 2015, 10:11 PM
On Thursday night, Greek Finance Minister Yanis Varoufakis tweeted out a link to a Foreign Affairs op-ed article titled “Greece Should Not Give In To Germany’s Bullying.”
The piece, written by British economist Philippe Legrain, argues that Greece ought to take a stand against its European creditors, which earlier on Thursday rejected a request from Greece on a six-month loan extension.
Leaked documents showed that Germany considered Greece’s offer a “Trojan Horse” and indicated that Germany wanted Greece to extend the existing bailout program, which is something Greece’s government has said it won’t do.
In his Foreign Affairs piece, Legrain writes:
Had the Varoufakis plan been put forward by an investment banker, it would have been perceived as perfectly reasonable. Yet in the parallel universe inhabited by Germany’s Finance Minister Wolfgang Schäuble, such demands are seen as “irresponsible”: Greece must be bled dry to service its foreign creditors in the name of European solidarity.
Legrain adds: “The eurozone establishment and much of the media think Greece is foolish to stand up to Germany. But what would be truly foolish is giving in.”
It is clear from Legrain’s article that he is 1) clearly in sympathy with Greece and 2) against the eurozone project more broadly.
But the real significance here is that Varoufakis shared the piece at all.
After developments Thursday, the public negotiations between Greece and Germany will continue to play out through the media and other public statements while government officials continue to chip away at a solution.
Which may or may not come.
Earlier this week we highlighted comments from economist and blogger Tyler Cowen, who outlined five reasons Greece would leave the European Union this year.
But in a note to clients on Thursday, Pantheon Macro’s Claus Vistesen wrote that he expected there to be a deal between Greece and the EU, writing: “We cannot completely discount the possibility that we are underestimating Germany’s and the EU’s resolve to force Syriza into compliance, but we are pretty confident that Greece’s request can form the basis of a deal to avert disaster later next week.”
We’re getting closer and closer to the point, however, at which the will-they/won’t-they of Greece’s staying in the euro is going to end.
Until then of course, Germany, Greece, and all the other EU players who want this situation resolved a certain way will continue to advance their message and try to strengthen their hand.