Just when you would think the Greeks will run out of tricks, they manage to cheat the gallows again.
Last time around in May, we had a classic Ponzi move of taking money from the International Monetary Fund (IMF) to pay the IMF.
This time around, the move didn’t work anymore, but we have another one called bundling. It means Greece won’t make the 300 million euro payment to the IMF this week but instead (hopefully) make one payment for the whole of June worth 1.5 billion.
If it keeps going like this, German finance minister Wolfgang Schäuble would be correct, albeit quite ironically:
“The key problem is not the debt [sic]. The key problem is that one day, 2020, 2025 Greece must be competitive again. Otherwise it’s a bottle without a bottom. And you can’t spend hundreds of billions and another hundreds of billions in a bottle without a bottom,” he said at a meeting at the Council on Foreign Relations in New York in April.
Clearly, the problem is the debt because Greece cannot and does not want to repay it, and this is what Prime Minister Alexis Tsipras had to say about this week’s payment:
— Alexis Tsipras (@tsipras_eu) June 4, 2015
So how is this possible? How can a beggar be a chooser? Why not just let the country default and exit, nobody is betting on its remaining in the Eurozone anyway.
Maybe because of Yanis Varoufakis’ eloquently penned op-ed “A Speech of Hope for Greece,” where he rather absurdly likens the country to post-war Germany, which got the Marshal Plan to help kick-start its economy again?
Probably not. As we pointed out earlier this week, Greece’s exit threat (or Plan B), at least for now, simply has too high costs attached to it.