(Shutterstock)
(Shutterstock)

James Carvel famously summarized the communications strategy of Bill Clinton's 1992 presidential campaign with the phrase: "it's the economy, stupid!" This pithy aperçu could be modified to sum up the key lesson from the Greek debt negotiations.

Surveying the wreckage of the past several weeks, can there be any doubt that the problems of the Eurozone are, fundamentally, attributable to the governance — or, rather, lack of governance — on which the monetary union was built? The "negotiations" of the past few weeks underscore the extent to which the architects of the euro pushed ahead with their project without the necessary banking and fiscal arrangements.

And is there any doubt that the malaise of the euro will continue so long as governance is not addressed? A cloud of uncertainty hangs over the euro; the IMF has already made the case for greater debt reduction, albeit through NPV reduction achieved through very long-term rescheduling with an extended grace period at a favorable interest rate rather than a 'haircut' on the face value of the debt.

The Greek parliament has passed the reforms, but the government is divided. Here's the problem: passing reforms is one thing; effective implementation of them is an entirely different matter. And, while opposition parties joined to pass legislation in order to avoid the leap into the unknown of Grexit, it is not unreasonable for opposition parties to disassociate themselves from the measure when the inevitable social backlash comes. The temptation to let Syriza bear the political costs will be too great.

So, the Greek drama is likely not over. The question is how long the intermission will last; the final curtain will only come down when governance is addressed or the Greeks cut the Gordian knot and reintroduce the Drachma.

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