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Tsipras playing a death-defying game over debt

Terry Murden

Greek PM playing with fire

It is symptomatic of the unfolding Greek ‘tragedy’ that the drama raises our hopes only to have them dashed, and raised once more. Only a week ago the markets were expecting a successful outcome to the numbingly-long talks with the country’s creditors. Now the talk is of bankruptcy, return of the drachma. A worst case scenario has the euro and the eurozone itself collapsing.

There is a temptation to see this as a game of bluff aimed at teasing out a compromise. Sadly, it is more akin to Russian roulette whereby the winner takes all. Greek Prime Minister Alexis Tsipras is ready to pull the trigger, hoping the voters back him in Sunday’s referendum and that he will survive to push his case with his EU negotiators.

Greece will not meet its deadline for payment of a €1.6 billion debt to the International Monetary Fund. Brewin Dolphin’s Guy Foster says it may therefore be called “in default”, or the IMF may choose to await the result of the referendum.

The European Central Bank was clearly unable to extend the current support and this has led directly to closure of the banks and limits on withdrawals to €60 per day.

In Mr Tsipras’s dangerous game he is depending on those who elected him and his Syriza party to maintain their loyalty. That depends on whether the public believes he can win his battle against further austerity when those on the other side of the negotiating table have already made it clear that their latest offer is final.

He wants a No vote to the EU’s proposed package of cuts to pensions and higher taxes and believes that even if the country does reject the package it can remain in the euro. Indeed, he argued tonight that a No vote will strengthen his hand. Equally, he has made it clear that should the public back the EU’s measures, he will not be around to implement them.

so, one likely outcome is the collapse of the Greek government and new elections. This will be a severe test for the EU which may find itself having to shore up more than the financial system.

European Commission President Jean-Claude Juncker said he felt betrayed by the “egotism” shown by Greece in the failed talks.

“I say to the Greek people – who I like deeply – one shouldn’t commit suicide for fear of dying,” he said. “I will never let the Greek people down, never.

“And I know that the Greek people don’t want to let down the European Union. Greece is a member of the European family and I want this family to stand together.

“This is not a game of liar’s poker. There is not a winner and a loser; either everyone wins or everyone loses.”

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