Over the last several weeks, European newspapers have been consumed with a debate over Greece’s role in Europe’s common currency, the euro.
Greece has suffered very badly in the financial crisis. In order to receive loans and a limited amount of debt relief, Greece has been forced to implement harsh austerity measures by other European states (especially Germany), European Union institutions and the International Monetary Fund.
Greece recently elected a left-wing government, which is looking to renegotiate the deal. But other European states are reluctant to help and are suggesting that Greece may have to leave the euro.
In the last couple of days, Greece seemed to be getting closer to a deal with the other involved parties, but now, people on both sides are balking. Radical members of the political party governing Greece are threatening to rebel at what they claim is a sellout to Germany. Germany’s Finance Minister, Wolfgang Schäuble is muttering about publicly opposing a deal which he sees as making too many concessions to Greece. Does this mean that a deal can’t be done?
Both sides have an incentive to play up domestic opposition
As last week’s Monkey Cage post argued, international negotiations can be thought of as two-level games, in which each negotiator is (a) trying to get the best deal possible at the international level, while (b) ensuring that she can sell the deal to the people back home on the domestic level. This means that negotiators at the international level have a very obvious incentive to emphasize how difficult it will be to persuade their domestic constituencies to accept a deal. Strong domestic opposition makes it hard for the negotiator to make any concessions to her international counterparts, hence forcing her to bargain hard. Clever negotiators will manipulate their opposite numbers’ perceptions to win concessions and to resist compromises that they don’t want.
Domestic figures will often have similar incentives to seem as obdurate as possible. By making it appear as though they will not accept anything other than a very favorable deal, they can help their negotiators and make it more likely that they will indeed get a better deal. Of course, they may also risk failure if they appear too obdurate, thereby making negotiators from other countries think that there isn’t any acceptable deal on the table.
Read the full piece at The Washington Post.
- Publication Type:Other Writing
- Publication Date:06/25/2015