The Bank of Greece has warned that the country faces imminent economic collapse.
Greece’s Central Bank bluntly warned in its regular monthly statement that “failure to reach an agreement would… mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and, most likely, from the European Union.
As Greece nears default, with the threat of economic chaos across the continent, divisions within the European ruling elite on how to manage an all-encompassing crisis are surfacing.
The institutions are calling for no let up in brutal cuts.
Sections of the Europe ruling elite are demanding a humiliating total capitulation of Syriza, whose most powerful spokesmen are elements within the German ruling elite.
What we have seen in recent months and weeks is a classic capitalist bargaining strategy. If capitalists or their managers don’t like the other party’s negotiators, they undermine their reputation within their own team. The tactic is to make them appear incompetent and then go around them and have them replaced.
The Greek debt crisis cannot be resolved by either more austerity or by growing out of it. The Troika is perhaps realising this. The debt must be restructured, but that is impossible politically without a deeper crisis. So the Troika may have decided to provoke one.
In the process it may shake up the chessboard, as they say, and result in an easier bargaining opponent and a more “reasonable” public – both in Germany and in Greece – that agrees to some kind of debt restructuring.