Financial Times
February 26, 2012
Now that “Greece”, this season’s big heist movie, is in the can and on the way to the distributor, the producers are sitting around the pool on the exclusive French Caribbean island of St. Barthélemy, working on the sequel, which starts shooting this summer.
As usual, the problem is how to get the audience back for more of the same: meetings convening and breaking up, riots, opposing talking heads, stock shots of the Parthenon. The answer, I believe, is to leak out that the franchise is still fresh, with great plot twists. Also, several lead characters (civil service unions, state enterprises, and pensioners) from “Greece” face horrible fates in the sequel, including slow starvation.
The key to understanding the story arc of the sequel is the one real success of the negotiators for the private sector lenders to Greece: getting pari passu (equal status) treatment for the payments on their new paper with that held by the European Financial Stability Facility, the official lender of the euro group. The term of art is “the escrow account”.
When, as is likely, the Greek government fails the first major test of its commitments under the restructuring deal, the bondholders and EFSF can be paid, out of the same escrow account, by the same fiscal agent, even as cash for the state is cut.
This is what I’ve heard about the current screenplay for “Greece 2: Revenge!”: fast forward past the close of the current deal, to the setting of the date for Greece’s next parliamentary elections. There was hope among some of the current cabinet members, especially the Pasok (socialist party) people, that those could be put off till next year, perhaps even up to the final deadline of next October. Now that doesn’t look as likely, so let’s say that we get elections by late April, after the signatures on the papers have dried.
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