I'm posting a response I've written to a private email that praises Tsipras' announcement of a referendum scheduled next Sunday (July 5). The email also asks why the IMF has been so obstructive over the past several months (and years). My response:
I think a referendum was appropriate, but perhaps a month ago, not now. (1) The creditors never negotiated; they never horse-traded compromises. That was obvious from the beginning, and glaringly obvious when they responded to Syriza's final offer, which tiptoed across some red lines, with even more demands. It was always take-it-or-leave-it. Tsipras and Varoufakis were not honest with the Greek people, in my opinion, by repeatedly making optimistic statements -- they should have said "we can't negotiate with these guys" and put it to a vote right away. (2) July 5 is past the critical deadlines. Default occurs on June 30, and the ECB is likely to terminate ELA as soon as that happens. They are also likely to impose their own financial solution on the Greek banks as they did with Cyprus. By the time the 5th rolls around, voting on whether to accept the final creditor "offer" from two weeks previously will be like refighting the battle of Waterloo.
Now everything is about how to manage the crisis. I hope, with months to prepare, that Syriza has a well-developed program for this. (And one that takes into account that they do not yet control the state apparatus.)
As for the IMF, it was no secret that there has been a lot of tension between the technical staff and the politicians at the top. They have a policy, established after the Argentine fiasco, of not lending to insolvent states, but instead requiring writedowns from the creditors. Ah, but the creditors in the Greek case are the banks and governments that installed the IMF directors, so the policy is being flagrantly violated. Personally, I'm disturbed there have been no high-profile resignations on the part of the IMF economists. It's not like Blanchard couldn't pick up another job somewhere, for instance. Years down the road there will be memoirs saying "I argued against this behind closed doors", but when has that ever really mattered?
At the moment, no one -- absolutely no one -- playing a role in this mess is looking good.