In strategic games, threat points determine the outcome. In the negotiations between Greece and its creditors, the threat point was always Grexit. The Greeks could walk out, leaving a hefty bill behind. The creditors could cut the flow of cash. But, of course, threat points must be credible, and the Greeks were not ready for Grexit. No drachma banknotes were printed, no coins were minted, no bank algorithms were readied and, crucially, no legislation was ready for the redenomination of contracts. On the other side, Herr Schäuble had long indicated that Grexit was his preferred option and the Chancellor started to t ... (full story)