The good cop returned to negotiations between Greece and its creditors after a hiatus.
Christine Lagarde and the International Monetary Fund — despite what some of the graffiti on the streets of Athens suggests — had often come across as the more sympathetic member of the three institutions behind Greece’s bailout. In mid-June, Olivier Blanchard, the fund’s chief economist, endorsed the Greek government's plea for additional debt relief in a blog post on the IMF's website. Blanchard also called on Prime Minister Alexis Tsipras to do his part, but the endorsement of debt restructuring was significant. The European Commission and the European Central Bank were less willing to broach the subject.
But as negotiations intensified, the IMF became less sympathetic. Lagarde grew strident, saying there would be no give on the fund’s deadline for payment on June 30. Tsipras’s response was to call a referendum for July 5 that will ask Greeks to say “yes” or “no” to the lenders’ offer. If it was a tactic to force the institutions’ hand, it didn’t work. The deadline to pay the IMF passed and Greece now is in arrears. A last-minute counteroffer from Tsipras that included a commitment to debt relief was rejected. European leaders said they were done talking until after the referendum.