Some people ask me about my previous post insinuating I got the Papandreou play wrong. I didn’t. Not quite. I just did not play out all eventualities. Papandreou’s play was simple and ingenious and I will try to recap it for those who did not get it, this time including the possibilities I had originally failed to explain.
Pinched between his Franco/German “partners” who would not cut him any slack and a folk with no more fat to burn (with representatives who have difficulty showing their face on the street) he had no chance of succeeding in getting the new loan deal through the parliament. Samaras, the opposition leader, was just opposing everything as he had no cost for doing so. Papandreou (and Samaras) knew that confronted with the reality of being responsible for the fate of the country Samaras would have no chance but to seek for ways to change course.
So Papandreou played hardball betting on either using Merkel to break Samaras or using Samaras to break Merkel.
That is to say either Merkel would cut him some slack or Samaras would sign the deal. The rest is history as Merkel saw the move and went all in and Samaras grabbed the opportunity to say “given the mess Papandreou brought us in I have no choice but to sign the new (and the old) deal”. The move cost Papandreou his position as prime minister but like in the game of GO the important thing is not whether you will lose a stone or two here and there but how much territory you win at final count.
The mid term future looks like this. Papandreou and Samaras support the new coalition government to sign all deals and stabilize the country and eventually (perhaps in the Spring of 2012) square off in the elections again. The two of them then go down together (if the country shows no signs of recovery) or delivery a good fight for power. Papandreou’s chances if he can keep his party by then (which looks good at the moment) will not be bad as he will be able to argue that he was right all along and that the stable country is evidence for it. You see? Papandreou got himself out of a lose lose situation and into a situation with a chance to strike back. In the meantime he can play rocketbird on his ipad!