Tsipras Moves From Predator to Prey at Euro Summit

The latest save-the-euro summit turned into open season on Greek Prime Minister Alexis Tsipras.

Leaders from German Chancellor Angela Merkel on down fretted about the “trust" shattered by Tsipras during more than five months in power, which was the European way of saying that the anti-austerity populist has got to go.

Creditor governments essentially ordered Tsipras, once a Communist youth activist, to convert to unquestioned capitalism to earn aid of as much as 86 billion euros ($95 billion) and keep Greece in the euro.

“The Greek government has accepted practically everything," Prime Minister Joseph Muscat of Malta said in an interview after the overnight marathon. “It accepted all the crucial and important points."

Two officials who observed Tsipras at the Brussels showdown independently described him as a “beaten dog" whose only remaining option was to submit to the creditors' will, carving out a concession here and there. Tsipras fretted privately about the reception that awaits him in Athens.

Under fire at home, Tsipras pulled off minor tactical victories, notably by retaining a measure of Greek control over a privatization fund that would raise up to 50 billion euros by selling state assets -- a target that proved unreachable in prior bailouts.

Tsipras juggled the face-to-face confrontations with phone calls to Syriza party faithful back home, telling the European leaders that he intended to take action against anyone who rebels against his sudden decision to bow to the outside economic forces.

Unity Coalition

The question in Athens will be whether Tsipras brings Greece's mainstream parties into a national unity coalition and stays on to run it, or quits to escape the political blame for enacting the drastic budget cuts he denounced for so long.

Whatever his personal fate, Greece has to pass a range of previously unpalatable measures by Wednesday to maintain the prospect of more financing. Tsipras's other option would be to keep the current government lineup, stonewall the creditors and head for the euro exit.

“Trust has to be rebuilt, the Greek authorities have to take on responsibility for what they agreed to politically here," German Chancellor Angela Merkel said.

Bridge Too Far

Some hardliners felt Greece was let off too easily. Dutch Prime Minister Mark Rutte feared the crumbling of his coalition and Finnish Prime Minister Juha Sipila argued that starting talks on the third bailout would be a bridge too far.

European frustration spilled over at the sense of being doublecrossed two summits ago, on June 26, when Tsipras appeared to converge on the creditors' terms, only to change his mind on his return flight and call a referendum to reject them.

The popular vote produced Tsipras's desired outcome, until a European ultimatum combined with Greece's shuttered banks and widening economic distress to persuade him that maybe the German-led bloc of financiers was offering a better deal after all.

The result, at a summit running 17 hours until 9 a.m. on Monday, was more of an inquisition than a negotiation.

“We found ourselves in front of difficult decisions and hard dilemmas," Tsipras told reporters at the end. “We took the responsibility of the decision to avert the most extreme plans of the most extreme conservative forces in the European Union."

Ringed by Crises

The ground was prepared earlier Saturday and Sunday, when finance ministers -- whose job is to make numbers add up, not to ruminate about Greece's geopolitical status in a Europe ringed by crises -- put the possibility of a Greek exit from the euro on paper for the first time.

It didn't matter that the German-inspired reference to a possible “time-out from the euro area" was in brackets, indicating that the passage was still in dispute. The point was that the threat to expel Greece had muscled its way into the official documentation, however briefly.

The new Greek minister, Euclid Tsakalotos, played by the technocratic etiquette that was alien to his predecessor, Yanis Varoufakis, who labeled the creditors' budget-slashing zeal “terrorism." Now, a French official said, the bad faith came from the creditors' side.

Once the leaders arrived, the biggest barbs came from the smallest countries. While Merkel was her inscrutable self, Slovak Prime Minister Robert Fico asserted “a moral right to be very hard on Greece. The Greeks would do best if they left the euro zone on their own, did their homework and then tried to come back. This is just torture for everybody."

Source: bloomberg.com