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This is brinkmanship. In the end, everybody will probably be sensible but there's a risk of a policy mistake. Part of the problem is both sides feel emboldened, greece is in a better economic situation than it was before ... and the government has a strong mandate from the people to change. But the EU is emboldened too because there are a lot more backstops than before, the ESM is in place, and you can see the contagion is so much smaller. Spanish and Italian yields hardly moved in this crisis.

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