I sure don’t. He’s the one who organized a referendum that was basically meant to reject the bailout deal offered to Greece — but now he’s now accepted a deal which by all accounts contains even tougher measures than the one rejected by its people a week ago. The Wall Street Journal writes:
Greeks gave a mixed reaction Monday to news that Mr. Tsipras had reached a deal with lenders that includes punishing austerity measures that go far beyond the ones overwhelmingly rejected in a July 5 referendum.
Mr. Tsipras now finds himself in a surreal position politically. The new deal —in which Greece would receive bailout money totaling up to €86 billion ($96 billion) in exchange for heavily opposed reformssuch as pension cuts and VAT hikes—represents a spectacular U-turn for Mr. Tsipras, who was swept into office in January on an antiausterity platform.
Now, he must back tougher versions of the measures he has vehemently disavowed for months. And to get the new package through Greece’s parliament by Wednesday, as required by Greece’s creditors, he must rely on backing from political opponents, rather than his own left-wing Syriza party…
The new deal sparked bewilderment and some anger on the streets of Athens over the idea of further austerity in a country that has labored mightily under previous belt-tightening measures. But some people expressed grudging acceptance of the high cost of remaining in the euro zone, hoping the deal would stabilize an economy shaken in the past two weeks by closed banks and capital controls.
AEI’s Michael Strain writes:
Greece and Europe have reached a deal. It is a humiliating defeat for Alexis Tsipras, Greece’s prime minister, who agreed, among other conditions, to running increasing primary budget surpluses into the future, reforming labor and product markets, reforming pensions, increasing taxes, and creating a $55 billion fund containing state-owned Greek assets that will be privatized for debt repayment, to provide banks with capital, and for investment. In exchange, Greece will receive a bailout of close to $100 billion — a massive amount equal to about 40 percent of Greek GDP. If all parties agree to this deal, Greece would stay in the euro zone.
What am I missing? It seemed obvious, even two weeks ago, that Germany wouldn’t cave to the Greek temper tantrum. Greece’s only option for avoiding austerity measures and disobedience was to default on its debt and leave the euro, an option which terrified everyone four years ago but now seemed rather appealing to many of its European critics, among them German finance minister Wolfgang Schäuble. Didn’t Tsipras see that? Or was this whole referendum his twisted way to prove to the Greek people that rejecting Europe’s demands wouldn’t produce a more painless way to stay in the euro?
I rarely understand politicians, but Tsipras seems especially inscrutable. Ultimately, I agree with Strain that Greece should leave the euro. The pain will be horrid, but it may be worth it in the long run. Certainly, it’s hard to imagine that this third attempt at a debt deal will not end failing as the previous ones did and lead to Grexit ultimately anyway.