Disclaimer: this seems to have been the blog post where I discovered gifs. Apologies in advance. I didn’t mean to look like Buzzfeed. Also, might be worth waiting for the page to fully load. Sorry.

Two seemingly incongruent things happened yesterday:

1. The Greek Prime Minister sent a letter to Jean Claude, Mario and Christine, telling them that Greece mostly accepts the original bailout package, with some small adjustments (read it here); and
2. Then he gave some speeches asking for everyone to vote “No” on Sunday.

The markets apparently “surged” on that news.

Some notes:

1. Tsipras has said that he’ll resign if the Greeks vote “Yes” on Sunday.
2. The Eurozone folks don’t like this Leftist style of negotiation – they would welcome a Tsipras/Syriza resignation.
3. The Greeks will almost certainly vote “Yes” on Sunday.
4. So why negotiate with a leader that’s just hung himself?

A list of reasons why Greece will likely accept the EU proposals in the referendum:

1. Back at the end of May:
   1. 71% of Greeks wanted to keep the Euro, and
   2. 68% of Greeks thought a return to the drachma would make things far worse.
   3. Those are not great starting statistics for the “No” camp.
2. This week, the Greeks are getting a taste of what life could be like outside the Eurozone:
   1. restricted access to money in the banks (even if you’re prepared for it, it’s still annoying),
   2. complete uncertainty about the future,
   3. being led by a government that won’t present a clear picture of what they’re asking/planning/implying,
   4. promises of pensions only to discover that some of those pensions hadn’t been deposited yet,
   5. shortages of fuel (because people panicked about a fuel shortage – so obviously, they filled up their cars and now there are empty petrol stations)…
3. With Tsipras’ decision to date the referendum for after the bailout expired (in the vain hope that he could get the bailout extended until after the referendum), there’s virtually no need for the “Yes” supporters to campaign. All the reasons for accepting the EU proposals are being lived through this week. And as the week continues, the more we’re seeing the polls swing in favour of a “Yes” vote.
4. At this point, the only real platform for the “No” campaign is one of national pride. And presumably, the letter was just one more way of trying to incite that (the implication being: “See, even when we concede publicly, they deny us. The Eurozone wants us out, so why should we stay?).
5. But also, the Greeks (like myself) might have experienced a sway in the direction of a “No” vote last week, with all the talk of blackmail. But in the cold hard light of being temporarily cut-off from the Eurozone, one realises that a “No” vote would put one on the same side as the Golden Dawn party. And also, the referendum requires a very simple answer to a very dubiously-phrased question, with no idea of what the outcome of the campaigned-for “No” answer will mean. So from what I can tell, the majority rules of thumb here seem to be:
   1. Whatever the Golden Dawn would want, vote the opposite; and
   2. When the question is dubious but the government has a very clear answer that they want you to give, vote the opposite.

What That Means For A Deal Before Sunday

From the Eurozone partners’ perspective, they would be crazy to do a deal at this point:

1. If the Greeks vote “Yes”, then Tsipras will resign and there will be a new set of negotiations with a new government whose overriding mandate will be “politics aside, just accept the EU proposals and implement the reforms”.
2. If the Greeks surprise us all with a “No” vote, then even if a deal were already signed, it would be immediately rejected as soon as the outcome of the referendum were announced.

So we wait for the referendum outcome.

For older and less flippant posts:

• Blackmailing Greece (written last Friday)
• Greece: But Why Is There Cash In The ATMs? (written on Monday)
• Should Greece Vote No? Grexit, Stage Left (written on Tuesday).

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.