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What Happens After the Proud Greek 'No?'

tsipras-merkelOne week after the election and Greece is still reveling in the people’s victory, the liberation from the occupying forces of evil Europe, wallowing in the wild joy of the proud “no” the new leftist government said to the troika last Friday.
“You just killed the troika,” Eurogroup President Jeroen Dijsselbloem allegedly told Finance Minister Yanis Varoufakis after the latter announced that Greece will not talk again with the three representatives of the country’s international lenders. It was a moment of national exultation, like beating Germany 5-0 in the World Cup.
Greek national pride is at a tremendous high at the moment. And who would have thought that Alexis Tsipras, the prime minister who had claimed in the past that his party is “left of the left,” would have inspired such nationalistic sentiments? Now, even the former king of Greece Constantine II said in an interview that he supports Tsipras and his proud stance. What next? Golden Dawn MPs will escape from jail to go kiss the SYRIZA chief?
After the loss of the government of “yes men” in the January 25 elections, Greeks have the chance to say “no” again. We needed that; badly. For five years, the country was humiliated. Editorials all over the world talked about the lazy Greeks who lived high on the hog on borrowed money they had no intention paying back. They spoke of a corrupt government hiding inside a labyrinthine bureaucracy, unwilling to implement any kind of reform that would shake the corrupt status quo.
Now things are a little different. Some editorials started presenting Greece as the poor, defiant David who challenges the Goliath of austerity. U.S. President Barack Obama said on CNN that Europe should stop “squeezing” Greece. President of the European Commission Jean-Claude Juncker suggested that the troika should be replaced by an alternative means of monitoring Greece’s bailout because its presence in Athens was “humiliating” for the Greek people.  “Give Greeks a deserved break” most editorials say now.
Greek people needed the rays of hope so generously provided by the new SYRIZA government. They needed the promise of a better future when a few weeks ago the word “future” was always preceded by “bleak.” And they needed the celebrations, the echo of which is still heard on the streets of crisis-stricken Athens.
Yet, the next day, the day after the celebrations and the swelling pride, is still unwritten. Today, German Chancellor Angela Merkel announced she does not wish to meet with Alexis Tsipras before the EU leaders summit on February 12. This means that Germany is not willing to write off part of Greece’s debt and will insist that Greeks should stick to their obligations. The Goliath is not backing down.
The “no” Greeks told the troika brings a series of “what ifs.” First and foremost is the “what if Angela Merkel wants payback for all those posters with her face and the words ‘go home’ SYRIZA had plastered all over Athens when still the opposition party?” Or for all those ‘go home, madam Merkel’ Alexis Tsipras was shouting in his campaign speeches? Or for his claim that he will never ask to meet with her because he doesn’t want to give her the satisfaction to refuse.
Revenge is a dish best served cold. Maybe this is the time the German chancellor has a chance to punish the rudeness of the Greek leader. It will look good on German voters who don’t want the burden of the Greek debt on their shoulders. Punishing the Greeks for their rebelliousness will also set an example for countries of the European south who are in debt and may ask for similar fiscal relief.
How can she do that? By pressing President of the European Central Bank Mario Draghi to cut the emergency liquidity assistance to the strapped-for-cash Greek banks. At the moment, Greece enjoys the benefits of the ELA exceptionally, as part of the bailout program that requires reforms in exchange of ECB support.
Then, Merkel can press Draghi to leave Greece out of the 1.1 trillion euro quantitative easing program. More specifically, the ECB will use its own newly-created money to buy 60 billion euros worth of government bonds each month from countries across the euro zone. The QE program aims at stimulating growth and will last until September 2016. The ECB has already set the condition that countries under a EU/IMF bailout program may have additional criteria to be eligible.
It is obvious that Greece does not meet the criteria and it will lose if left out of the QE growth scheme. While other European countries will take advantage of the particular growth scheme, Greece will stay behind. To the point that it might stay out of the euro zone altogether.
And the proud Greek “no” could turn into a doleful “oh, no!”

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