Rift talk may be self-fulfilling prophecy

 Threatening creditors that Greece would be happy to leave the eurozone is a dangerous negotiating tactic

By Dimitris Kontogiannis

The Greek government has submitted the long-awaited list of reforms to the lenders but the initial signs do not point to an agreement anytime soon that could open the spigots of liquidity to the cash strapped economy. Fully aware of the difficult choices ahead, some in the government obviously think they could strengthen the country?s negotiating position by raising the specter of a breakup in the negotiations with the lenders that could even lead to a euro exit. However, these tactics weaken Greece?s position further rather than strengthening it and should be abandoned.

In the minds of many leftists, the country?s strong card in extracting as many concessions as possible from the lenders is an exit from the euro. For some of them, a minority, an exit is better than eurozone membership and they are willing to go the distance. Although they recognize in private talks the cost will be large for Greece initially, they counter the new currency will boost economic growth and employment in the years to come by propping up exports, inducing import substitution etc. They may not say that in public, but some of them have a change in the country?s socioeconomic model in the back of their minds.

When asked whether they are concerned about the public?s reaction to a sharp drop in living standards, they argue the majority of people will understand, positing it as a battle against foreign interests and the domestic oligarchy.

For the majority of the leftists who want to play the card but want Greece to stay in the eurozone, the rationale behind this strategy is simple. The lenders and others do not desire a Greek exit...