Why Greece Can't "Wawrinka" Its Creditors

Greece has no equivalent to Wawrinka's "Shorts of Doom."

Over the weekend, I watched the 2015 men's final at the French Open pitting world #1 Novak Djokovic [Serbia] against world #8 Stan "The Man" Wawrinka [Suisse]. Like everyone else, I expected the Serbian great to trounce Wawrinka, but the latter had other things in mind. Looking ever-so-ridiculous in pink boxer shorts pictured above, Wawrinka's incredible serve and pinpoint backhand nevertheless gave the world's best player a lesson in grand slam tennis he will not soon forget. The prospect of losing a French Open for the third time--this time to some dork wearing pyjamas--seems to have had driven Djokovic beyond the edge of sanity. First he smashed his racket to smithereens. Next he cried like a baby during the awarding ceremony.

I am not sure whether the crazy shorts were intended, but they seem to have thrown Djokovic off his game. Since being elected, the Syriza faux-socialists have tried to "Wawrinka" their creditors not only by dressing funny but also acting funny. What kind of self-respecting commie pinko appears in a lifestyle spread in the tabloid Paris Match? More seriously, how can you expect to please your creditors by making no changes whatsoever to the patronage-heavy Greek institutional infrastructure? Increasingly, I am with those calling for Greece to finally enjoy the fruits of their seemingly desired bankruptcy. Grant them their death wish. From Francesco Giavazzi at Bocconi:

Europeans, too, have made mistakes. Since Athens joined the monetary union, we have lent Greece €400bn, 1.7 times the country’s gross domestic product in 2013. It is time for a reality check: they will never be repaid. And it is an illusion to imagine, as the Finns sometimes do, that we could receive compensation in kind by acquiring a few Greek islands. The age when the British empire would do that is, luckily, over. Bygones are bygones. The sooner we accept this and forget those loans the better.

If the Greeks do not want to modernise, we should accept it. By a large majority, they have voted for a government that, six months after the election, remains vastly popular. Its popularity with the electorate signals a wish to remain a nation with a per-capita income half that of Ireland, less than that of Slovenia. In a few years it will be overtaken by Chile. I only hope that no one in Athens dreams that debt forgiveness and Grexit offer an alternative path to growth.

Without economic and social reforms, Greece will remain a relatively poor country. But it is not for the rest of Europe to impose reforms on Greece. It should merely make crystal clear that without serious reforms, new official loans are over. The only way for Athens to borrow will be to convince the markets that it will pay its own bills. No more EU guarantees, explicit or otherwise.

The difference is that while Wawrinka was crazy like a fox--feigning lunacy to disguise a well-thought game plan to put one over a formidable opponent--Greece's leaders are plain crazy. Sure, Greece does the "crazy" bit real good with talk of German WWII reparations and other ideas from cloud cuckoo land. However, it certainly isn't "like a fox" with no plan other than to bite the hand that feeds. And therein lies the rub: to implement the "Wawrinka" strategy, you have got to have game. Greece's Syriza leaders have one trick, which is to keep saying how the EU will implode if Greece isn't accommodated, all the while backtracking on all sorts of commitments to reform a backward, dilapidated and uncompetitive country.  Greece cannot put one over the troika; it has no game, nor any semblance of an overarching strategy. Unlike Wawrinka and his sartorial commentary, Greece's Stupid European Tricks increasingly throw no one off.

It's time to put Greece out of its misery already. Let it default and go back to the the drachma. The world has wasted enough time on these fools.

PS: You too can try to "Wawrinka" others by purchasing his Yonex shorts. Attention Greek leaders: isn't capitalism grand this way?