The deal agreed to Monday between Greece and its creditors was hard fought, and even if Athens did not come out on top, the lengthy negotiations call to mind another Greek battle: the Battle of Marathon, a famous Greek victory against Persian invaders in 490 B.C. that later inspired the marathon run. After hours of intense negotiations, Greek Prime Minister Alexis Tsipras accepted terms for a third bailout that were far more onerous than those in the second bailout program, which expired June 30 after Greece rejected further austerity.
What lies ahead is more uncertainty and turmoil as Tsipras must now push a number of these new policies, including tax hikes and pension reform, through a parliament in which he maintains a fragile majority. The harshness of the terms and the intransigence of core eurozone creditors, led by Germany, astonished many economists and observers worldwide. The Nobel Prize-winning economist Paul Krugman called it “vindictive folly” and suggested it might be a fatal blow against European integration.
While many thought Tsipras had a secret agenda to lead Greece out of the euro, he remained faithful to his pledge — and the will of the majority of Greek voters — to stay with the joint currency. In fact, it seemed that that particular objective was German Chancellor Angela Merkel’s and Finance Minister Wolfgang Schäuble’s, with former Greek finance minister Yanis Varoufakis attributing it to Schäuble as a way of enforcing discipline among other euro members.
In the end, it was Tsipras who reneged on the other half of the pledge that got him elected: that Greece would not accept a bailout “at any cost.” Faced with the chaos of a collapsing economy and failing banks, which forced Greeks to scramble for food and risk running out of essential medicine, Tsipras ended up accepting austerity terms Greek voters had decisively rejected in a referendum last week. It was Merkel who remained firm in her declared objective to keep Greece in the euro, but not “at any cost.”