Do not, ever, play poker with this man he is stone cold! The man in the picture (if you did not know) is George Papandreau the, current, leader of Greece and in poker terms he has just 'pushed all-in'. That is, he has bet everything he has on one hand and forced the decision on what to do upon the other players. The timing of his strategy really has to be admired, if viewed in pure game theory. The impact of the move is increased the fact that it was unforseen.
Now this might seem counterintuitive, as it would appear that, by calling for a referendum on Greece's austerity measures, he has placed the decision on the Greek electorate rather than the Troika but I am guessing that this is not the case.
Greece has binged on the excesses of government borrowing for many years but voting themselves out of the euro would be simply suicide. Despite what the polls say I cannot believe that, when faced with that ballot paper, the electorate would vote no, knowing full well that this is voting for default and expulsion from the euro.
The populous also knows that the Greek economy is in a poverty trap that it cannot escape under the current terms. The austerity measures will cripple, further, their appaling economy, making the tax take (little as it is) worse, making it impossible to, ever, extricate from their debt burden or dramatically lower living standards.
On top of this they know that by commiting this economic suicide that they will bring down the rest of Europe.(The contagion effect is well explained elsewhere)
So it is put up or shut up the rest of Europe . Either, agree to the Greek debt reduction without imposing the required austerity measures, or they will take you down with them.
Of course the Troika could call their bluff and let them have their referendum but it is a pretty big gamble to make. Desperate peoples do desperate things.
Stone cold, George.
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