Mr. Tsipras says that, if push comes to shove, Greece can manage on its own. By not paying its debts, the country will have enough cash to pay its workers and retirees, he says. He also proposes cuts in defense spending, cracking down on waste and corruption, and tackling widespread tax evasion by the rich.
“Whatever we do, things will be difficult. But it will also be difficult at the same time for all of Europe because the euro will collapse” if Greece’s funding is cut off, says Mr. Tsipras. He adds that both sides should step back “before we reach that point” and find a “European solution.”
Now you’re screwed Christine Lagarde, Merkel and the various ECB wonks. They figured it out over in Greece.
You have crap cards and Tsipras has a Royal Straight Flush.
Now he may be lying, but if he’s not he knows that he can pay the workers and retirees — if he walks on the debt payments.
This means he holds the trump hand. He can operate internally and tell you all to stuff it. And assuming he’s telling the truth and really has run the numbers, the ECB, Merkel and the rest of the Eurozone is stuffed on trying to force anything down Greece’s throat.
He also wants to nationalize the banking system. Now, if he goes further and forces a “One Dollar of Capital” standard for all banks inside Greece, then the game-playing stops but so does the systemic risk — inside Greece.
Now what’s left for the rest of Europe? They’ve got a problem — a big problem. By nationalizing the banking system he flushes the private parties that would otherwise play “hand grenade” with the economy and government.
This doesn’t mean that Syriza won’t screw it up, of course. He might.
But it leaves the door open to solve the problem and stabilize the banking and monetary system in Greece going forward.
It’s about damn time.