Are the Germans imposing even harsher terms on the Greeks to maintain a political stasis rather than to merely recoup their investments? That’s one theory – one which Greenlight’s David Einhorn is apparently a proponent of.
There are elections happening in countries across peripheral Europe over the next few months and the last thing the Troika wants is to contend with five more versions of Syriza. A humiliation of Greece may be the last tool the northern countries have at their disposal in order to keep the left-wing factions of the southern countries under control.
“Europe is unwilling to allow Syriza a face-saving compromise, even if that means Greece collapses and the rest of Europe suffers,” Einhorn wrote in a letter to investors on Monday obtained by Bloomberg.
“Syriza has capitulated by proposing a deal which leaves Greece with even more austerity than when negotiations began and no actual debt forgiveness,” Einhorn wrote. “This might not be enough, as the grand goal of the European negotiators appears to be to discourage other countries from electing populists.”
The longer this has dragged on, the more it’s felt like a political crisis rather than an economic one. I think Einhorn is onto something here.