Earlier this week at the German Wirtschaftstag held in Berlin on the heels of G7 meetings, the discussions on Greece had many elements of a high stakes “prisoner’s dilemma” — a game theory that demonstrates why two entities might not cooperate even when seemingly it would be in the parties’ or individuals’ best interests. The meeting participants were told that despite the numerous rumors, the EU countries were working diligently to keep Greece in the Eurozone. During the opening discussion it was voiced that any solution with Greece needed to be a sustainable one that included fundamental reforms. Nobel Memorial Prize in Economic Sciences winner, A. Michael Spence emphasized the importance for the global markets that Europe moves past the Greece issue as quickly as possible and develop a fiscally viable growth strategy, cautioning that the only way to get sovereign debt levels down is through real economic demand. A path that can increase levels of investment and instigate demand needs to found, as sustainable growth will be not be forged through public spending but rather the private sector.
The newly appointed Finance Minister of Finland, Alexander Stupp indicated that unless there was indication of an adherence to fundamental reform that some finance ministers might be “losing patience” with the situation. Robert Zoellick, the former president of the World Bank, reminded the audience that it was the Greeks who were the inventors of drama, which includes both comedy and tragedy. The June 30th deadline to resolve a Greek debt deal will tell what form this particular drama takes.
