Tuesday, June 16, 2015
Why Greece will capitulate
June 16, 2015
The good news is that an endgame for Greece is nigh, and the best case scenario for Greece and the eurozone is still the most likely outcome. The bad news is that the best case scenario for Greece is still a highly unpalatable one.
Even if Prime Minister Alexis Tsipras agrees to whatever demands Greece’s creditors make to avoid default and manages to hold his party and government together, Greece faces an extremely tough road ahead towards potential sustainable growth.
Policymakers were full of warnings last week for Greece that time is running out to agree to a deal and secure liquidity. As European Council President Donald Tusk said: “The day is coming, I am afraid, that someone says the game is over.”
That day is not as close as most seem to think. There have been calls for Greece to sign on the dotted line by the next Eurogroup meeting this Thursday. That is an artificial deadline, and will pass as all other artificial deadlines have — without a deal.