If Grexit happens, parliamentary egotisms may well be to blame

In 1987, the American historian Richard R. Johnson wrote a quite brilliant essay explaining how a clash of legislatures had contributed to the American declaration of independence. In short, his argument was that a deal was eminently achievable, but ‘parliamentary egotisms’ made it impossible to achieve. Westminster wouldn’t give way to the Massachusetts Assembly and vice-versa, for they feared that any concessions would strengthen the power of the crown against them.

I wonder, increasingly, if history won’t end up saying something similar about the Greek crisis. The gap between the various sides is actually relatively small. But neither side wants to be seen to back down and both want the other to have to publicly retreat. The Syriza-led government in Athens wants to show that it hasn’t buckled, that electing it has led to Greece getting a better deal than it otherwise would. While the rest of Europe, led by the fiscally austere Germans, want to show that Syriza has had to surrender to economic reality.

Now, the rise in Spanish borrowing costs yesterday suggests that the risk of contagion is not, as the Germans have convinced themselves, negligible.