Tentative Deal Strips Greece of Sovereignty, Makes Debt Relief Dependent on Compliance

The cost of Greece avoiding a Grexit is submitting to becoming an economic serf of the Eurozone, subject to even more draconian austerity than was ever on the table before. I’ve embedded the statement that sets forth the deal that was tentatively agreed today. The Greek government still has to pass four bills by the 15th and another two by the 22nd to comply. It’s not clear that that will take place.

Due to the hour, there are yet to be detailed analyses up, so I’ll provide quick media reactions and some additional observations. This deal is simply vicious. This is far and away the most one-sided agreement I’ve ever seen, by an insanely large margin. Even the language is shamelessly punitive. For instance, the document repeatedly mentions that all the previous terms under consideration will need to be made vastly more stringent in light of the deterioration of the economy and how the Greek government needs to prostrate itself to gain the trust of the creditors.

As Politics.co.uk puts it (hat tip Swedish Lex):

As the dust settles this morning on the Greek bailout crisis, it is increasingly clear we are witnessing one of the most daring raids on national democracy in post-war political history. If this new plan passes the Greek parliament, Greece can no longer be said to be a genuinely sovereign state. Brussels and Berlin are taking over Athens. Even one of Alexis Tsipras’ minor victories – that a £50 billion privatisation fund would be based in Athens, not Luxembourg – was entirely superficial. As Angela Merkel insisted this morning, it would not be under Greek control.

The fact that Greece is even considering it means that they recognize what we have argued: that a Grexit would be such a cataclysm that even this dreadful deal would be considerably less costly to Greece and its citizens. But this is like asking someone to choose between cutting off an arm versus cutting off both legs.

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