The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.
It looks like Alexis Tsipras is crumbling.
After the banks closed and public opinion started moving against him, the Greek prime minister seems desperate for a deal with his creditors. Athens has now defaulted to the International Monetary Fund, adding to the pressure. But it is not clear lenders will cut him any slack. They may prefer to deal with his successor.
The chance of Greece quitting the euro has risen sharply. But a so-called Grexit can still be stopped, despite dramatic weekend developments which saw Athens declare a six-day bank holiday after talks with its creditors broke down.The most obvious way of avoiding a Grexit is if the people vote to accept the bailout terms offered by euro zone countries and the International Monetary Fund in a referendum set for July 5. But even if they do that, it’s not certain Greece will avoid a return to the drachma.
We’re going to be really tough on the euro zone. If they want more bailouts from the International Monetary Fund, they are going to have to submit to strict conditionality. That was the message delivered by the rest of the world when it agreed at the weekend to participate in a fundraising exercise that will boost the IMF’s resources by at least $430 billion.
The euro zone shouldn’t rely on a bailout from the rest of the world. The International Monetary Fund is asking for an additional $600 billion to help deal with the euro crisis. But the euro zone, which is vastly richer than most of the rest of the world, should find the money to solve its own problems. It will be bystanders in the developing world that may need help if the euro blows up.