After all sorts of reports of progress, the negotiations between the new Greek government and Eurozone finance ministers were at least temporarily blown up by a statement from the latter basically saying Greece must live up to its past commitment–you know, the ones decisively repudiated by the winning party in the recent Greek elections.
Paul Krugman suspects the Eurozone governments don’t want an agreement:
Rather than give any ground, they prefer to see Greece forced into default and probably out of the euro, with the presumed economic wreckage as an object lesson to anyone else thinking of asking for relief. That is, they’re setting out to impose the economic equivalent of the “Carthaginian peace” France sought to impose on Germany after World War I.
That’s an analogy the Germans at the center of this dispute ought to be able to grasp.
Greek Finance Minister Yanis Varoufakis seems to think the Eurozone representatives are engaging in some sort of gamesmanship, and will come back to the table. But what else is he going to say? There’s plenty of time for fresh defiance and the much-feared Grexit if he’s wrong.
