Predictions Predictions: Referendum on Grexit

Stuck as I am in Athens courtesy of BA messing up my flight, I thought I could offer some predictions on how the Greece-Germany-Eurogroup standoff may evolve.

First of all, from what I have seen with my own eyes, there is no sense that any recovery of any sort took place here in the dying days of Samara’s government. Even Faliro and Glyfada are now dominated by shuttered stores (my favourite λουκουμάδες joint amongst them)


There is pride in the new government but increasing desperation as to what may happen. What can happen? My impression is that Varoufakis will soon (within April certainly) will have to face another Eurogroup showing dire fiscal results. The decline in tax collections seems entrenched and the deflationary-recession dynamic intractable. The inability to seriously fund measures to addresses the humanitarian crisis is making this trend worse.

The Eurogroup will respond to this in the usual way, by demanding fiscal consolidation measures including pension and wage reductions (οριζόντιες περικοπές). Varoufakis then will pull the nuclear card and threaten a referendum on Grexit. Then either the Germans blink or all hell breaks loose.




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