Sunday, July 12, 2015

Merkel Plays the Part

... of Shylock to the hilt. Shakespeare gave Shylock all the best lines, but reality is less kind to the German Chancellor.

Meanwhile, Paul Krugman can't decide whether he is angrier at Merkel for her intransigence or at Tsipras and Syriza for it's failure to do any contingency planning.

1. Tsipras apparently allowed himself to be convinced, some time ago, that euro exit was completely impossible. It appears that Syriza didn’t even do any contingency planning for a parallel currency (I hope to find out that this is wrong). This left him in a hopeless bargaining position. I’m even hearing from people who should know that Ambrose Evans-Pritchard is right, that he hoped to lose the referendum, to give an excuse for capitulation.

2. But substantive surrender isn’t enough for Germany, which wants regime change and total humiliation — and there’s a substantial faction that just wants to push Greece out, and would more or less welcome a failed state as a caution for the rest.

3. I don’t know if some kind of deal might still be approved; even if it is, how long can it last?

The world remains ruled mainly by idiots.