The current standoff with creditors over the second review of the third bailout increasingly resembles the catastrophic 2015 negotiations that brought Greece to the brink of Grexit. The protracted negotiations are taking a toll on the economy. Depending on when agreement is reached — or elections are called — three possible scenarios could unfold, none of which involves Grexit. After the July 2015 referendum, Greek Prime Minister Alexis Tsipras presented the proposed program as an improvement over the one rejected by voters because it included debt relief and excluded the “tough” International Monetary Fund from the troika. Now he will be asking Parliament to vote for tough measures for the exact opposite reasons.
Miranda Xafa is a CIGI senior fellow. Miranda focuses on sovereign debt crises and drawing lessons from the Greek debt restructuring for future debt crises. Previously she served as a member of the executive board of the IMF in Washington, DC.