As the rest of the world, I am sure, I am tired of watching Dijsselbloem and Moscovici giving press-conferences after Eurogroup meetings, hanging off their every word for clues as to what may happen to Greece, which is (perpetually it seems) on the cusp of default, Grexit, Armageddon etc.
As I have said before on this blog, this sad state of affairs is the result of a disastrous failure on the part of Syriza, and a catastrophic miscalculation on the part of the lenders (primarily, yes, you guessed it, the Germans). Who did what and when does not matter anymore. What matters is what to do now.
What has helped bring things home (like a kick in the shin) is today’s IMF repayment. Greece did not pay the IMF, despite what you read in the press. Greece used its SDRs to pay the IMF, meaning the IMF paid itself and Greece has a short period of time to refund the money used. SDRs are special drawing rights that are an emergency mechanism available to IMF members to repay the fund when they are facing difficulties. It is a relic of the Bretton Woods system and operates as a pre-agreed overdraft (see here for details). This in the view of everyone is not a ‘credit event’, yet it is not a payment either.
Syriza has dragged this on beyond the point of reason. Greece cannot repay the IMF, it cannot repay the ECB or the EFSF. It cannot pay anymore pensions unless the funds are made available through the pension funds releasing money (another circular way to make payments). It can pay wages by pillaging the funds from local government and state enterprises.
For all the grand rhetoric on Red Lines and Electoral Promises and Mandates, Syriza has managed to back itself into a corner and blackmail itself into submission. Like Mel Brooks’ sheriff, it is threatening to shoot itself in the hope the likes of Schaeuble blink and pay up. They will not. It is game over.