Greece’s ‘Game Theory Meets Harsh Reality’: Ross

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.”


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.