Monday, June 1, 2015

Greek ultimatum is a bad idea

by Hugo Dixon


June 1, 2015

Should Greece’s creditors give the country an ultimatum? No. Not only is such a thing probably unnecessary, it could also play into the hands of Greek nationalists who would argue that foreigners were again bullying Athens. Besides, negotiations between Greece and its creditors are making progress, albeit still too slowly. Dictating to the Greeks would make any bust-up between the two sides particularly bitter.

Some take the opposing view. The Wall Street Journal’s Simon Nixon, for example, argued last week that talks between Athens and its lenders were going nowhere; so the euro zone and International Monetary Fund should present Greece with a take-it-or-leave-it offer, set a deadline, and say they would cut off its banks if it didn’t agree.

Even if such tactics made Athens come to heel in the short run, the government would have no ownership of the programme meaning there could be little confidence that it would implement it properly. Delivering on what is agreed is even more important than reaching a deal in the first place.


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