After five months of high drama, debt negotiations between the leftist government in Greece and its official lenders - the European Commission, the International Monetary Fund, and the European Central Bank - are near the finish line.

On June 22, an emergency summit will be held to discuss the Greek deal, which may very well determine the future of Greece's participation in the eurozone.

The outcome of this meeting will either be an agreement, a temporary compromise, or a complete break between Greece and the eurozone.

The most likely scenario is the second one: temporary compromise.

Greece debt crisis: brinkmanship or bust?

But an understanding of how things got to this point - a deadlock over a cash-for-fiscal-reforms deal - could provide insight into what will happen next as time rapidly begins running out for Greece.

Stringent conditions

Over the past five years, Greece has received about $270bn from the above mentioned institutions in order to stay afloat and not default on its debts, which could have caused the collapse of some of Europe's major banks in Germany and France, in particular, and even the eventual dissolution of the eurozone.

But the economic assistance came with stringent conditions. Among other demands, these included massive budget cuts, deep wage cuts, substantial pension reductions, huge tax increases, profound labour market reforms, and large-scale privatisation schemes.

The approach taken by Greece's lenders was based on simple accounting rather than macroeconomics.

It did not matter if these measures sunk the Greek economy into a depression and caused massive unemployment rates and extreme poverty, as forecasted by most economists around the world.

The approach taken by Greece's lenders was based on simple accounting rather than macroeconomics.

 

All that mattered for the lenders was to ensure, from an accounting standpoint, that enough funds were allocated on a consistent basis so that loans could be repaid.

As the above draconian measures began to take effect and the Greek economy went into freefall, eventually creating a humanitarian crisis inside one of the world's richest regions, so did the popularity of Greece's mainstream political parties, which had been carrying out the unpopular and indeed catastrophic policies designed by the euromasters and the IMF.

New mandate

Fed up with obsequious, corrupt, and heartless mainstream politicians, the Greek electorate gave a clear mandate to the Coalition of the Radical Left (Syriza) in the parliamentary election of January 25, to end austerity, renegotiate the debt with the country's official lenders, and address the humanitarian crisis.

Indeed, after forming a coalition with the Independent Greeks, a nationalist and right-wing political party, the Syriza-led government lost no time in making known to the Europeans that the "business-as-usual" approach towards Greece - you clap your hands and we run to serve you - was over. 

With the flamboyant and narcissistic Greek Finance Minister Yanis Varoufakis as head of the rebel army, the Greek government embarked on a strategy of "diplomacy as warfare", intent on speaking truth to power as if power did not know the truth.

Greece's Finance Minister Yanis Varoufakis [AP] 

Greek politicians could have used subtle diplomatic manoeuvres, treating senior level officials and institutions in the eurozone with their due respect in public while still showing that, behind closed doors, they were determined to put an end to the tragic state of affairs in the country, even if that meant Greece defaulting and withdrawing from the eurozone.

Instead, however, the leftist government officials in Athens "yelled, kicked and cursed" in public with no Plan B up their sleeve.   

For the politicians, the lack of Plan B stemmed from a fervent, though highly erroneous, belief that the scenario of a Grexit was something Greece's euro partners would never entertain, because it would cause a cataclysmic meltdown of the European economy.    

And they gambled on that.

Syriza's theatrics

Meanwhile, the Syriza-led government's "theatrics" were popular back home. During one of his countless and largely meaningless interviews to foreign media, the Greek finance minister even had the audacity to proclaim: "Greeks want decency, not money or jobs."

Even left-leaning political leaders turned their back on the Greek government, probably in full awareness that 'diplomacy as warfare' in public view would cause greater harm than good in negotiations.

 

Sure. This is because Varoufakis knew his strategy wasn't going to deliver, so he sought to make average Greeks feel that, if they were unemployed or hungry, at least they could be proud of their government standing up to the euromasters - even if its tactics made no tangible gains.

In response to this "diplomacy as warfare" strategy, however, Greece's euro partners hardened their stance and, soon, the leftist government in Athens was isolated and alone in its international campaign to secure major concessions from its creditors.

Even left-leaning political leaders turned their back on the Greek government, probably in full awareness that "diplomacy as warfare" in public view would cause greater harm than good in negotiations.

To be sure, the strategy that the euromasters and the IMF themselves have now adopted is not only to force Syriza into accepting a humiliating compromise, but also to finish it off politically - Alexis Tsipras in particular.

This is a message intended for future "troublemakers" in the eurozone.

So, what will the Syriza-led government do now that negotiations are wrapping up?

Rational actors

The government knows that its euro partners have called its bluff and are ready for the possibility of a Grexit.

Unless its politicians prefer economic suicide over compromise, the Greek government should accept that it is the one incapable of handling a Grexit.

Moreover, it has to account for the fact that the majority of Greek people do not wish to see such a scenario materialise.  

A demonstration outside the Greek parliament, which was called a few days earlier in support of the government, barely attracted 5,000 people, most of them either near retirement or actual pensioners. 

So, assuming that we are dealing with rational actors on both sides, while also taking into account the bad blood of the last five months, the June 22 summit seems unlikely to produce a complete agreement. Rather, it should lead to a temporary compromise, which will unleash enough funds for at least the 1.6 billion euro ($1.8bn) payment due to the IMF at the end of June.

In sum, the Greek government truly has its back against the wall, and its realistic options are so severely limited that a compromise tomorrow seems inevitable.

CJ Polychroniou is a political economist/political scientist who has worked for many years in various universities and research centres in the United States and Europe.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.

Source: Al Jazeera