Do you remember Yanis Varoufakis‘ “doctrine” for a Greek default within the euro zone”? That was back in 2012, when Varoufakis who was just an economics professor and games theorist, was touring the media claiming that “Greece should default within the eurozone.” Now, exactly today, Wednesday, a similar scenario appeared in the Hamburg-based newspaper DIE ZEIT.
According to the article the Christian-Social Democrats coalition government in Berlin prepares a Greek default plan without exit from the country.
“The government in Berlin is concerned that Athens will not be able to meet its payment obligations to the creditors in the coming weeks. In such a case, the ECB should stop providing Greece with euro.
But there is talk [in Berlin], a plan that Greece could default within the eurozone. The plan foresees further funding by the ECB provided that Greece will continue with the needed reforms.
If Greece does not comply with this demand, the German government could accept Greece’s exit form the euro zone. But even then, the country will receive funds from Brussels until the transition to national currency is complete.” (rough translation, article DIE ZEIT in German here)
The scenario does not make much sense because if the Greek government had the intention to comply with the creditors’ “reforms-austerity-cuts” demands it could have done it already in February and it wouldn’t need to default first.
Anyway, according to Greek state NERIT TV, the German government dismissed the ZEIT claim as “untrue”. However short after the article was uploaded on DIE ZEIT website, the German Finance Ministry warned Athens that there would be no bailout tranche in April.
“We are negotiating with Greece at the moment. If there is a reform list, then the next step is a so-called Staff Level Agreement to make formal changes to the conditions of the aid program. This is a complex process and no one in the Eurogroup expects this to be concluded by April 24,” a finance ministry spokeswoman said.
“Once you have this Staff Level Agreement, then you have to have implementation. Greece would have to agree laws and at some point the institutions would conduct an implementation review and only on this basis could aid be paid out. If people are under the impression that aid could be paid out in April, I think this is wrong.” (Reuters)
No bailout trance, no money to pay the creditors? Therefore default within the eurozone in April? As the Germans say “Kommt Zeit, Kommt Rat” – in English “time will tell”.
For some weird reason, I keep having Varoufakis’ doctrine in my mind all the time, since beginning of March the latest. Of course, I miss Varoufakis’ point on Greece’s financing options during the default, but never mind. It’s just a scenartio, isn’t it?