In the first sellside reaction to the latest Greek tragicomedy, moments ago Citi's Richard Cochinos, in a note titled "72 hours for Greece" said what our readers have already known for about 6 hours: namely that "Greece will have 72 hours to implement the changes" and goes straight to the bottom line: "If they are unable to get the package through parliament, then this ends the dialogue and the government collapses.
He adds that "the issue that Greece faces is it might not be possible – cracks in Syriza appeared already over the proposal sent to Brussels, what is coming back is even more stringent than the rejected referendum. There is a decent chance the Greek government will reshuffle next week, possibly fold on reforms. Domestically they can’t afford 3-4 weeks for new elections. The Economic Minister has suggested capital controls will remain in place for the next two-months (though they may be lightened). During the tourist season this is proving to be a death touch to the economy. RyanAir announced last week it is discounting flights to Greece by 30% due to low volumes."
We had a more directed view: in light of his "mental waterboarding", Tsipras who has already lost all his credibility with both his people and the Troika, should do the only possible thing he can at this point: preserve some integrity with his voters, and resign...
Following the "mental waterboarding" Tsipras should resign right now https://t.co/bhGJaPFiTj [6]
— zerohedge (@zerohedge) July 12, 2015 [7]
... knowing full well that it is very likely that Syriza would be re-elected in the next elections, but meanwhile throwing the ball in Europe's court for the final time, forcing the Eurozone to make the Grexit decision instead of, as Merkel has done passive-aggressively, letting Greece to pick its own poison. Also, in doing so, the blame for the collapse of the Eurozone would fall on Germany, something Merkel's ego would hardly be able to withstand.
And as if reading the collective's mind, Tsipras did already begin the governmental reshuffling, only instead of quitting he has started the purge of the hard-core leftwingers still defending the anti-bailout platform, who are certain to make life a living hell for the premier once he returns to Athens from Brussels and has to explain his actions to both his party and to the population.
As Reuters reports, the first targets of Tsipras purge of "party rebels opposed to an austerity package that will have to go through parliament within days" include the most prominent rebels, Energy Minister Panagiotis Lafazanis, leader of the so-called "Left Platform" within Syriza and Deputy Labour Minister Dimitris Stratoulis, a former unionist and a fierce opponent of pension cuts.
Under a Syriza party agreement, deputies are supposed to resign their seats if they publicly disagree with government policy although there is nothing to stop them refusing to stand down and holding on to their seats as independents.
Terence Quick, a member of the rightwing Independent Greeks, the junior coalition partner in the government, said that any deputies who voted against the government should resign.
"I don't think abstaining or being absent shows you are responsible or honorable in these particular circumstances. You either go in and say a forceful no and you leave or you say 'Yes' and you continue to fight," he said
The next scalp Tsipras would love to have is that of the "uncompromising speaker of parliament, Zoe Constantopoulou, who also defied Tsipras and abstained from the vote" although she would require a no confidence vote to be replaced "but the other rebels would be expected to resign their seats, the same people say."
And if not resign they will simply be among the first group of party leaders sacked, with many more to come as Tsipras effectively morphs into his predecessor Samaras.
According to Reuters, the 40-year-old prime minister "can not afford to wait" because "a mini-rebellion of lawmakers on Friday laid bare tensions in the ruling Syriza party. The revolt saw 17 deputies from the government benches withhold support in a vote to authorise bailout negotiations, leaving Tsipras reliant on opposition parties to pass the measure."
Dealing with the consequences of that revolt will provide a clear signal of how determined Tsipras will be in pushing through the reforms European partners are demanding.
Whether cooperation with opposition parties leads to a full-scale national unity government, with seats in the cabinet is still unclear but the change has left the future of the radical leftwing government in doubt. The government has 162 seats in the 300 seat parliament.
Then again after Friday's vote, and following this weekend's crushing blow by the Troika, it is almost certain that many Syriza loyalists will exit the party, either voluntarily or otherwise, leaving the ruling coalition with a minority vote, which in turn will likely result in a few round of government elections within 2-3 months.
However, the purge will be only the first of many hurdles now facing the morally and financially bankrupt government:
Clearing out the leftwingers still defending the anti-bailout platform on which Syriza won power in January would underline how seriously the situation has worsened for Greece in the past six months.
With the financial system on the brink of collapse and shuttered banks running short of cash, the six-year Greek crisis has escalated dangerously, forcing Tsipras to change course only a week after voters resoundingly rejected a milder package of bailout terms in a referendum.
There are also questions about how stable any such government would prove, given the deep ideological differences between Syriza and the centre-right New Democracy or Socialist Pasok parties.
But the biggest hurdle is not what Tsipras will do to the government, but rather what, if anything, the Greek people will do to Tsipras. If they have had enough, they may just shift from the "radical left" to the "radical right" as the only remaining political party that hasn't promised the sun, moon and stars, or been terminally discredited.
Unless, of course, the population, so disenchanted by the endless game of political thrones, becomes the first social manifestation of "learned helplessness [8]" and simply refuses to care, instead opting to go gentle into that good night and with it taking what was once the world's oldest democracy.
