Agony in Athens

The Game Is Rigged Against Greece

Demonstrators shouts slogans against austerity during a protest to support the Greek government in Lisbon, Portugal June 22, 2015. Rafael Marchante / Reuters

In a recent article for Foreign Affairs, I wrote that, in the negotiations over the Greek bailout, Greek Prime Minister Alexis Tsipras would likely sign the EU’s proposed debt agreement and the Greek Parliament would ratify it. The reason? The unanimity of decision-making within the EU and the ECB’s control over the liquidity of Greek banks gave the EU the upper hand.

As I write this postscript, I do not know whether my predictions were accurate. There is still great uncertainty about whether Greece will accept or reject the current EU offer (which may be slightly modified) or instead prolong its agony, and the world’s, by getting one more extension.

What is obvious is that these negotiations have lasted way too long. Understanding the reasons the talks have been so protracted may help the EU avoid similar situations in the future.

There are two possibilities: the first is that one of the two sides does not want a deal. The second is that at least one of the two actors is unaware of the exact preferences or capacities of the other—the problem of incomplete information. The first possibility seems implausible. It is true that certain actors in the EU and in Greece want to part ways, but they do not constitute a majority or have a predominant position within either bargaining team. The drama of the negotiations, therefore, must come down to incomplete information: messages were not effectively transmitted in the negotiating process. The question now is whether the problem has been the people involved or the structure of the negotiations.


The Greek “strategy” is a mess of random and contradictory messages from Greek government officials. Athens’ fundamental position was that it had a recent popular mandate to demand the end of austerity and the reduction of the debt burden. EU officials judged the request as excessive, and were particularly incensed by the tone of Yanis Varoufakis, Greece’s finance minister, who often appeared to

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