In my video update on 3rd February (watch here) I pointed out that the Greek players had their backs up against the wall and that they would deploy the all-in approach of provide us with funds or we will go bust. At a poker table this would be the best decision – you have to take a managed risk and you need to do it with as much power & strength as you can muster.
So where are we now?
Let’s look at the chips held by each of the players. I will concentrate on just two players, Greece and Germany, although there are lots of others shouting at the table trying to influence the game (in their own interests I might add).
- We owe Germany €63.5bln so if they want their money they need to keep us in the game (and the German government will need to explain to their people how they managed to lose all this money).
- Currently running a budget surplus so we don’t need cash for day-to-day financing.
- GREXIT could make Lehman Brothers look like a tea party for the Eurozone.
- We have a rock solid democratic mandate to play the game this way.
- We are an unknown quantity having never been in government before let alone negotiate at a European level.
- Most of the other southern European Countries support our approach.
- If we give in to Greece, the floodgates will open to renegotiate other bailout agreements.
- It will be a very difficult time for Greece if they leave the Euro and default on their debt.
- Greeks won’t be very popular in Europe and we can make things difficult for them if they don’t accept our proposals.
- 70% of Greeks want to stay in the Eurozone.
So where does this leave us?
In exactly the same situation as before in my opinion, the Greeks will continue to play their chips as strongly as possible and will insist on getting a minimum agreement that allows them to meet their election commitments to their people. They are unpredictable in their approach and this very unpredictability may help unsettle their opponents. Ultimately what does the new Greek government have to lose? The question is how will the Germans respond.
And before I sign-off I noticed that some press articles are beginning to use poker as a metaphor for what is going on – well you heard it here first and from a real poker player. But the media is talking a lot about bluffing. In poker bluffing is only where you haven’t got good cards and are hoping to win by scaring off the opposition with big bets. I don’t think the Greeks are bluffing and it would be a mistake for the Eurozone to think they are.