In the Shadow of Grexit: A Short Story of Long (and Failed) Negotiations, January-July 2015

Abstract

The article gives an outline of the failed strategy followed by the Greek government under Alexis Tsipras during the six-month negotiations with Greece’s creditors (January-July 2015). It is argued that Mr. Tsipras’ government had no concrete plan during these negotiations and that its moves were largely based on a combination of ignorance, misconceptions, and wishful thinking. The prolongation of negotiations was made at the expense of creating huge problems for the Greek economy and making the Greek position worsen with each passing day. The final blow was the proclamation of the Greek referendum which was held on 5 July 2015. Because of this failed strategy, Greece was found at the edge of default and exit from the Eurozone, a development which was avoided literally at the last moment.