The Greek government has until Wednesday night to approve a set of measures which appear to this simple non-financier outsider to be wholly unreasonable and unworkable, otherwise it gets shown the Grexit door and European unity is a thing of the past.
Millions of words have been written about this whole sorry process, mainly from an economic or political perspective. I’d like to look at it through a negotiations lens to see what can be learnt from it. It seems to me to have been an exercise in Trust, and a great example of what happens when this is missing.
The reason I say this is that whenever you listen to a comment made by someone at the recent talks the recurrent theme is Trust. Angela Merkel said only yesterday:
“The most important currency has been lost and that is trust.”
I’ve written before about Trust, and how it is the first and most important thing to establish in negotiations in which a long term relationship is involved and we are seeking a collaborative outcome both parties can feel good about.
Competence, Openness, Reliability, Equity.
Good negotiators plan how to do this as part of their overall planning, and will work hard in the early stages to ensure these four factors are in place before moving onto the detail of any long term and important negotiation. Let’s see how these negotiations hold up against this model.
Competence: are Greece’s negotiators the right people at the table? Do they have the mandate to make decisions and commitments on behalf of the rest of the party, and indeed the people who elected them on an anti austerity mandate? Do they have a track record in dealing with macro economic issues of this kind? Have the negotiators done their preparation so they can make constructive proposals at the negotiating table? Do they understand the importance of trust, and use the right approach to producing a collaborative outcome?
As an outsider looking in there appear to be some problems in this area, to say the least. Remember the reaction when Greece turned up last week without a proposal to put on the table, just a sheaf of handwritten notes?
Openness: are Greece’s negotiators open with information, sharing the detail, opening up on the inside story? Do they reveal their emotions and use open behaviours at the table?
Not easy to say, other than I have noticed my own irritation at Mr Tsipras’s permanently cheerful grins. Having a negotiator with a reputation for being expert in game theory (former finance minister Yanis Varoufakis) might not help. If I think you see this as a game, my first reaction is to become more competitive, and I will start by becoming less open with you.
Reliability: Doing what you say you are going to do is a key element of Trust.
As I understand it Greece is seen to have not delivered on the commitments it made to introduce austerity measures when taking on the original funding, and I suspect this is a major barrier to success in these negotiations. Failing to meet its debt repayment commitment last week was also a massive failure in reliability from which it will be hard to recover.
Equity: Trust is built on fairness – give and take if you like. Does Greece think it is fair for its lenders to impose austerity measures which will make it hard to rebuild the economy and cause real hardship for its citizens?
Judging by last week’s overwhelming referendum vote in favour of rejecting the proposal, the answer to that is no. Conversely does Europe, and most importantly Germany, feel it is fair to be asked to write off Greek debt when the country is seen by others as having been slow to impose austerity measures and is unproductive and overmanned in the public sector in comparison with other countries?
Building Trust takes time, which is one thing they are really short of. These negotiations have been an arm wrestle in which both parties have the power to do significant damage to the other. The result is that Greece is now being forced by Germany to “prostrate herself in an act of doglike self-abasement”, to quote Boris Johnson. In order to stay in the euro she will have to sell off state assets and in effect hand over the running of the economy to the Germans. Either this or face a “time-out” from the eurozone for at least 5 years – in other words get kicked out.
A sorry state of affairs for such a proud country. Not trusted by others, and quite possibly not trusting itself to run its own affairs and make its own currency work – hence why so many Greeks want to stay in the euro. The result of this lack of trust will be a series of compromises or fudges at best, with an ongoing set of rules and deadlines to be broken and continued brinkmanship no doubt by both parties. It’s a result no one wants, and will be the start of years of bitter conflict, sorry to say.
Trust can take years to build and one reckless moment to break. It will be some time before Greece can consider itself a trusted partner at the European table. That is no good for any of us.