A few minutes ago, the Greek parliament voted in favor of the austerity plan being pushed on its governments by the International Monetary Fund, the European Central Bank and the European Commission.  The result will be falling living standards in Greece, lower growth (if not outright recession) and much suffering in general.  But, Greece will receive the next batch of bailout payments that will help the country stay current on its outstanding debts.

In my column for The Daily today, I mused about the wimpiness of Greece's Socialist majority party and compared its tactics for dealing with the IMF to Republican tactics when negotiating the debt ceiling.  When the whole debt ceiling debate started, really back at the start of the year, my initial reaction was that Obama should insist on a clean vote with no conditions whatsoever in the belief that the Republicans would never push things so far as to cause any sort of default, temporary or otherwise.  Republicans, I thought, were basically threatening the world with a doomsday device that would smite them as well as their opponents and they would never pull the trigger.

The Republicans have basically convinced Obama and the Democrats that they are, in fact, insane enought to set off their bomb, whether or not they get vaporized.  They even floated the amazing notion, refuted by investors, economists and ratings agencies, that a little debt default won't cause much harm.  The argument is akin to a James Bond villain insisting that there will be no harm done if he blows up the moon so, why not?  How do you negotiate with that?  The answer is that you wind up making concessions, which is what Obama and the Democrats are doing right now.  Time will tell how palatable those concessions are, but concessions have been made.  You have to admire Republicans tactics here.

You also have to wonder why Greece didn't use them when negotiating with the E.U.  Greek Prime Minister George Papandreou has been too accomodating.  He should have told the E.U. that his responsibility is to ensure rising living standards for his people, not to worry about bank failures in Spain or France.  He should have announced his intention to default in an orderly way with the lightest losses going to those lenders who step up first to either forgive principal or extend maturity of the debt.  He should have basically said something like "anyone who steps up by Friday loses 5%.  Anyone who refuses a haircut doesn't get paid at all."

Yes, there would be consequences to that but it's sure better than the result -- Greece has made all of the concessions while its lenders have made none.  Tomorrow, Greece's parliament has a second vote on how to implement the approved austerity.  That's an opportunity for the Greek socialists to get some courage and defy the E.U. a bit.  If they keep rolling over like they have, Greece's people should consider replacing the lot of them.