Greece's debt negotiations, which spring from near resolution one day to crisis the next, create a much greater sense of volatility because the talks are conducted in public, with news and media services eager to report every source of conflict between the participants.
And those participants aren't shy about outlining their more extreme positions because with greater media coverage they reckon they get increased leverage. Thus, it's in the interest of those hawkish creditors (most notably the International Monetary Fund and some from the German government) to talk up the chance of Greece being ejected from the euro and the economic turmoil that would likely ensue in the country. Likewise Syriza, elected on the basis of ending austerity, can claim that it is representing the underdog being bullied by multinational institutions who want to make Greece's already overburdened citizenry even poorer.
Of course Europe is not alone in this public airing of dirty laundry – who can forget the so-called Fiscal Cliff in the US a couple of years ago, when brinksmanship on the part of Republicans and Democrats sent shudders through markets around the world about the prospect of the world's largest economy failing to agree a federal budget. Whatever, the result is that debates taking place in public appear more divisive. Markets would be a lot less tetchy if negotiations were held behind closed doors, as happens with most major financial discussions around the world.
So where do things stand now? The situation remains highly uncertain and is changing by the hour, however it's still looking more likely that a new agreement will be reached than it did a few days ago, with some real compromise on the part of the Greeks. That said, creditors have to realise that the Greek government has a mandate to negotiate some tempering of the austerity that is creating real hardship in the country – some face-saving has to be part of any settlement. We also need to bear in mind that the Greek government has to bring a fractious party and parliament with it – one end result of this could either be a grand coalition (if enough Syriza members reject any agreement), or even an early election.
Still, along with all these uncertainties it's worth remembering the positives: Greece has a trade surplus, and its finances are in much better order than they were a few years ago— the country would likely have a fiscal surplus were it not for the left wing policies of Syriza. In the eurozone as a whole the recovery continues, with an index published this week showing that business levels are at a four-year high. Behind all the toing and froing and the headlines, life goes on.
This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.