Bargaining power and negotiation strategy: examining the Greek bailouts, 2010–2015

ABSTRACT

Under what conditions do governments choose hard or soft bargaining strategies in intergovernmental negotiations? Applying a bargaining power model in two-level games, I explore the factors that explain Greek strategy in bailout negotiations during the period 2010–2015. Governments with fewer power resources, worse best alternative to negotiated agreement and fewer domestic constraints are more likely to follow a soft bargaining strategy. But the choice of strategy is as much the result of structural features of bargaining power as it is of ideology and the perception of success (or failure) in iterative bargaining rounds. The findings have implications for bargaining power models and European Union bailout negotiations.

KEY WORDS:

• bailouts
• bargaining power
• Greek crisis
• negotiation strategy

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributor

Nikolaos Zahariadis is Mertie Buckman professor of international studies at Rhodes College, USA. Address for correspondence: Department of International Studies, Rhodes College, 2000 North Parkway, Memphis, TN 38112, USA.

Notes

1. Lax and Sebenius (1986) also use the term to refer to strategy, not just tactics.

2. In a radio interview, Prime Minister Tsipras (2015) admitted ‘neither side had good intentions during the negotiations’. There was also a personal dimension to mistrust. European Commissioner Pierre Moscovici revealed in an interview on French television that ‘there was a moment of physical tension between [Eurozone President Jeroen] Dijsselbloem and [Greek Finance Minister Yanis] Varoufakis … They accused each other of being liars. I had to intervene’ (quoted in Traynor 2015).