Greece negotiates debt ‘holding a gun to Troika’s head and behaving like a spoilt child’
The EU is in a lose-lose situation, and Greece is not necessarily going to be a winner either no matter what deal it gets, global financial markets expert Patrick Young told RT.
RT:Greece plans to honor 70 percent of its bailout deal and overhaul the rest. Will the EU accept those terms?
Patrick Young: I don’t think it can be anyway acceptable to the EU or the Troika of lenders for the very simple reason that other people in the EU have already been bailed out, have stood by their debt provisions and have ultimately been able to manage to come through this whole crisis to some degree. Think of the Irish for example. Therefore frankly what we are seeing at the moment is actually really a catastrophe of the media. The Greeks are doing an incredible job, they are wonderfully digital, they look handsome, they look trendy, they are rushing around the news stations, in the studios, in the twitter sphere and they are telling us that this is all absolutely fantastic, they are going to be able to renegotiate, because the people have given them a mandate. But ultimately debts are debts; you have to repay them in some way, shape or form. You can’t have an exceptional deal when you are Greece. And in fact actually already the interest rate that Greece is paying is a lot more attractive than the interest rate that has been put upon other nations such as Ireland.
RT:How long can Athens afford to play hardball with its European creditors?
PY: I think that we are obviously coming towards the fact that it’s got to reach a conclusion soon. In fact if it weren’t for the fact that this is a political crisis we would have already been done with the whole situation because in a business context nobody would waste their time with this silly juvenile negotiating. There is no doubt whatsoever the Greek government is making a lot of progress at home. It is trying to change things; it is trying to do things differently. But eventually the point of government is you have to be beholden to the debts that have been run up over 15-16 years by your predecessors.
RT:Greece said it will seek funding elsewhere, including Russia, China and the US if no agreement is reached with the European Union. Do you think that's a viable option?
PY: It well may be a viable option. It seems to be that the Russian balance sheet is somewhat stretched at the moment. But of course there may be those who would like some influence within the European Union such as China who would find it useful to bail out Greece. There are possible options there for Greece. I’m not sure it’s going to come to fruition but at the same time frankly holding a gun to the head of the Troika of lenders and simply saying like a spoilt child “If you don’t give us all the cake we want, we are off” is not a reasonable way to negotiate.
RT:Why should the EU bow down to Greek pressure?
PY: The situation is not just the EU; it’s the Troika of lenders of course we are looking at here. Ultimately if the Troika of lenders back down, then they are going to have a catastrophe and crisis because they will have lost faith and all of the other borrowers will say “Why do we need to bother? Why do we bother paying our debts back as we have been doing? Why bother with austerity?” So therefore actually that could bring the European Union itself to the brink of a huge crisis. Of course on the other hand if the EU doesn’t blink and they hold Greece to their agreements Greece is threatening to storm out of the Union. That too is probably going to be a situation that could well lead to the end of the euro. The problem is of course within 6-7 years of this crisis the European Union hasn’t done anything substantively to try and resolve it and therefore we end up with this ridiculous ‘grand standing’ crisis which is wonderful for 24 hour news media. But ultimately for the economics and the people who want to work and pay their debt it isn’t getting anybody anywhere. The European Union stands at the moment in a pure lose-lose situation. At the same time Greece Is not necessarily going to be a winner no matter what deal it gets.
RT:A recent poll shows that 48 percent of Germans want to see Greece out of the eurozone. Do you think a so-called "Grexit" is still a possibility?
PY: It absolutely is. I’m in Frankfurt today; I can tell you I have been in Germany for the last few days and anecdotally talking to Germans at all walks of life. They are sick and tired of seeing their own municipal facilities being closed down in order for every German family to effectively be bailing out the Greek economy to the tune of €700 per family. That’s a ridiculous amount of money and a transfer payment for which the Germans feel they didn’t sign up for. Therefore actually they are very lucky in the way that they have got almost figures as patient as Mr. Schaeuble, the Finance Minister, as patient as Mrs. Merkel, the famously indecisive German leader that are therefore leading the way into these talks because ultimately the German people strike me as being sick and tired of dealing with a Mediterranean nation which doesn’t want to live by the rules, which doesn’t want to pay its debts and wants some sort of special treatment that is not applicable to the other countries in the 28-member European Union.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.