Flies on the wall are emerging from a closed door meeting yesterday between European leaders before their evening summit to discuss the results of Greece’s referendum.
The summit was convened in Brussels to discuss details of a potential bailout for Greece. With Greece’s voters voting ‘no’ in Sunday’s referendum about accepting austerity measures as part of the conditions to receive a bailout package, eyes were on Greek Prime Minister, Alexis Tsipras to present an updated budget proposal. However, in place of a concrete proposal, new Greek Finance Minister Euclid Tsakalotos instead made a verbal presentation of Greece’s intentions to reduce expenses and cover its debt requirements, with Tsipras making assurances that a proposal will be presented today.
In the aftermath of the summit, Greece was given a five-day ultimatum to present its budget proposal with another summit scheduled for Sunday.
In public comments, EU leaders shared optimism but also angst about the proceeding. Head of the European Commission (EC), Jean-Claude Juncker, stated, “My aim is to prevent Grexit. I am against Grexit.” But he also added, “It is unacceptable for the European Commission to be deemed terrorists by the Greek government.” Juncker also mentioned that the EC has the Grexit scenario in place. German President, Angela Merkel also commented that a plan needs to be “serious and credible.”
It is unacceptable for the European Commission to be deemed terrorists by the Greek government – Jean-Claude Juncker
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Privately, reports are emerging that the leaders weren’t as political in their discussions with Tsipras. According to details received by Bloomberg from European officials, behind closed doors at the pre-summit meeting, EU leaders blamed Tsipras for creating the tension between his country and the EU. The report added that Lithuanian President Dalia Grybauskaite stated, “Party time at the expense of others in Greece has come to an end,” and that the rest of Europe isn’t prepared to bear responsibility for Greece.
Adding the fact that a formal financial proposal wasn’t provided by Tsipras, the Greek Prime Minister could be considered to have undergone both a private and public Shark Tank scolding. Like startups pitching their ideas without concrete plans, Tsipras’s leadership was criticized for holes in his arguments.
Like any startup presenting their product for funding, key rules before presenting are to be able to deliver figures on market size, competitors, and potential risks. Failure to cover these points can cause even the best ideas and product presentations to meet with critical responses from investors.
Similarly, Tsipras appears to have also failed on his points. In regards to competition, rhetoric from the EC revealed that they are prepared to move ahead without Greece’s participation in the Eurozone. This is despite the costs and potential losses the rest of the EU would suffer in a Grexit scenario. As such, Greece may have underestimated the EC’s existing planning to move ahead without them.
Also, by pushing for a referendum vote, Tsipras was put in a position that he would need to present a proposal that met with both Europe’s minimal financial requirements, but also to cater to his country’s desire for minimal austerity measures. Nonetheless, appearing without a formal proposal, Tsipras was vulnerable to criticism that his ‘ideas’ are great, but like a startup coming to an investor, funding only comes with concrete analysis of market size and realistic revenue goals.
Overall, after failing Tuesday’s first round of funding talks, Tsipras may have set himself up for unsurmountable odds in his next turn in the tank.