Drifting Towards Grexit

I’m hardly an expert on public finance, especially in the convoluted context of the Greek collision with its European creditors. But two days after Greek voters decisively vetoed an unconditional surrender to the Troika controlling financial assistance for Greece, European financial and political leaders seem more focused on developing common talking points than on offering debt relief–temporary or permanent. The Guardian‘s Jennifer Rankin explains:

Greece will a make formal proposal on Wednesday to tap the EU’s €500bn bailout fund, the European stability mechanism, said the chair of the Eurogroup, Jeroen Dijsselbloem, after the meeting ended with scant results. Finance ministers will discuss the idea by phone.

“All of this has to be done in a matter of days. We have very little time,” he said.

The leaders of France and Germany said they expected Greece to come up with “serious and credible proposals” at today’s summit.

The demand was echoed by finance ministers, who stressed they wanted to see the Greek government sign up to reforms. Several made it clear they would not support any write-off of Greek debt.

So the creditors are already sore that the new Greek finance minister didn’t show up today with his own proposed terms of surrender. Barring that, it seems they may just sit on their hands until Grexit happens automatically. Then we will presumably see how much collateral damage to the regional system and to global markets ensues. It’s an oddly passive way to approach what so many have regarded as the Apocalypse.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.