Mistakes are a fact of life. It is the response to the error that counts.

- Nikki Giovanni

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How the Greek Financial Crisis Resembles a Mediation

Negotiations between the Greek government and the European Economic Community were much in the news this summer. In the wake of the refugee crisis, the financial crisis has been driven off the front page. I’ve nonetheless been thinking about all the ways these negotiations seemed familiar, reminding me of things that often happen in mediation:

  1. Plaintiff and Defendants: One party asks for money – in this instance, a great deal of money plus forgiveness of past indebtedness. The other complains it did not get what it bargained for and resists giving more believing there is little hope of repayment.
  1. Preservation of Relationships: The Euro Zone members debated the viability of its relationship with the Greek nation. Can the parties continue to do business together? Should they continue to do business together? Is either party better off on it’s own? Should the parties be more focused on relationship repair?
  1. High emotions: There were strong emotions at the table, including high moral dudgeon and self-righteousness. The Germans appeared to hold the Greeks in contempt, complaining of their lack of discipline, corruption and self-indulgence, while the Greeks condemned the Germans as unrealistic and heartless. Some commentators suggest Germany’s open door to refugees today may be the result, at least in part, of the Greek reminder of Germany’s past during World War II.
  1. Negotiation Style: In the New York Times on Sunday, July 12, 2015, a spokesperson for the European Economic Community criticized the negotiation style of Greek Prime Minister Tsipris. Too aggressive; too erratic; too demanding. Turned off by his negotiation style, some became more entrenched and resistant to compromise with the Greeks. Mediators often hear one side complain about the negotiation style of the other.
  1. Divide and Conquer: As often happens, not everyone on each side agrees. One country, Germany, had the most at stake. Not surprisingly, others encouraged the Germans to put up even more money, while the Germans argued they’ve put up more than enough. (In the refugee crisis, we hear another echo of this theme when the leader of Hungary says the refugees are a “German problem.”)
  1. Collateral Consequences: Some argued that the Greeks should have been given relief because the collateral consequences and impact of their exit from the Union could not be foreseen and could be catastrophic for the world economy. What will happen to other European Economic Community nations in financial trouble? Would a Greek exit encourage Russian mischief in Europe’s economy? In mediation, we often hear about the collateral consequences of settling – and not settling.
  1. Brinksmanship: As I write, the financial crisis seems to have eased. We don’t know how long that will continue. Is it over? Negotiations to reach resolution continued right up to the 11th hour before the Greek government held it’s referendum on voting “no” before conceding to Currency Union demands. Many negotiators in mediation wait until the very last minute to start putting realistic offers on the table.
  1. Imposition of Arbitrary Deadlines: As a negotiation technique, some parties impose artificial deadlines – then complain bitterly when the process moves through and past them. Several arbitrary deadlines were set and missed. The same happened in the Iran Nuclear agreement negotiations. Despite their lack of utility, parties nonetheless often impose them.
  1. “The past isn’t dead; it isn’t even past.” This quote from Faulkner comes to mind because the dead hand of history seems to rest on more than one set of shoulders. The role of Nazi Germany in the occupation of Greece during World War II is a classic example.
  1. Interest Based Bargaining: Each side crafts arguments appealing to the needs and interests of the other. The goal of the European Union and the European Economic Community is to bring the nations of Europe together. In 2013, Croatia became the 28th nation to join. Never before has membership gone backwards. Do the Germans really want to be responsible for the potential break up of the union? Do the Greeks really want to go back to their own currency?

You may see other parallels. I don’t know how long the current arrangement will hold – the Germans played their cards close to their chest; the Tsipris government reversed itself completely. As the world watches the contraction of the Chinese economy, perhaps we won’t have to wait long for the parties to return to the bargaining table. For ADR providers, isn’t there something very familiar about the stories and shenanigans behind today’s the headlines?!

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