Greece’s government is not about to “commit economic suicide” over its reforms-for-rescue negotiations with its international creditors, distressed asset investor and billionaire Wilbur Ross told CNBC, saying that Greece had woken up to a “harsh reality.”
“This is game theory meets harsh reality,” Ross, who has investments in Greece, told CNBC on Friday, a day after Greece submitted last-ditch proposals to its creditors in an attempt to get a new bailout deal before a Sunday deadline.
Game theory is a mathematical study of decision-making and strategy in social situations and can help explain how two parties interact in decision making. Greece – and particularly, the government’s former finance minister Yanis Varoufakis — has been accused of using game theory in negotiations with its international creditors over the last five months, not least of all by calling a referendum on the country’s bailout program two weeks ago.
Despite the majority of Greeks voting against the bailout and the substantially more austerity that a program would entail, the Greek government submitted new reform plans to creditors on Thursday, detailing tax rises and an overhaul of the Greek pension system, as lenders demand in a last bid to avoid bankruptcy and an exit from the euro zone.
Against such a backdrop, Ross was optimistic that the Greek government, led by the leftwing Syriza party and Greek Prime Minister Alexis Tsipras, would do whatever they could to get a deal now.
“At the end of the day, people do not commit economic suicide – that’s not a patriotic act to bankrupt your country. So I think that at the end of the day, Mr Tsipras and even a lot of the people from Syriza will come round and face reality – this is game theory meets harsh reality,” he said.
“I don’t think that five and a half months was very well spent, it was mostly spent in game theory, I think now, for the first time, they’re into negotiations and that’s why I’m optimistic that we’ll come to a proper conclusion.”