Why are Greeks so sure that a deal will get done?

Greek bankruptcy and ejection from the euro have never seemed closer, at least from the perspective of Greece's creditors. But few Greeks share their pessimism.

To many observers outside of Athens, the prospect of Greece leaving the eurozone is a matter of when, not if.

But you won't get that impression in the Greek capital, or elsewhere in the country of 11 million. 

Even as shuttered storefronts and lengthy ATM queues offer not-so-subtle reminder of the country's economic crisis, most Greeks remain convinced that all will work out in the end. The country may be on the edge of the precipice, they say, but Greece will ultimately seal a deal and retain its place in the eurozone. 

Why is that disconnect so gaping?

Of course, whether a "Grexit" is inevitable or not remains anyone’s guess. Both Greeks and Europeans have experienced a roller coaster of emotional highs and lows as news of the negotiations trickles out of Athens, Berlin, and Brussels. And the polarized media across Europe leaves little room for calm assessment.

But part of the disconnect is due to different interpretation of events on the ground. Across the continent, the decision of Greek Prime Minister Alexis Tsipras to scrap negotiations, default on a loan, and hold a referendum on the terms of a bailout agreement, was seen as at best a dangerous distraction from bailout negotiations. And at worst, particularly in Germany, it was seen as out and out sabotage.

Still, many Greeks took Mr. Tsipras at his word, namely that a decisive referendum result – 60 percent rejected the bailout – would give him a stronger hand to fight austerity.

“I voted for ‘no’ to support what he asked, to give Greece more negotiation power,” says Athens resident Maria Dede. “We had to demonstrate that austerity is not good for the people.”

Eleventh-hour bargaining

But the Greek faith that an agreement will be reached also owes much to recent patterns – wherein the “last chance” for European unity is always salvaged at the final moment.

Greeks are not oblivious to the fact that the creditors, at least publicly, don’t appear to be giving ground and that financial markets aren’t panicking (which would add pressure on creditors to cut a deal). But in the end many believe Greece will get a new bailout because, otherwise, the political costs for Europe are too high.

They point to the French and other anti-austerity advocates in the EU working tirelessly to bridge the gap before Sunday's crucial summit.

“I think yes, we will have a deal. Because Europe needs us and we need Europe,” says Alkis Madousis, who is studying sport science in Athens. “Even [my friends] who voted for ‘yes’ [in the referendum Sunday] share the same opinion.”

And while they may be living through tumultuous times, the prospect of a return to the drachma, the currency Greece dropped in 2002, seems abstract and improbable.

Denial and deals

Outsiders, says Romolo Gandolfo, an expert on Greek contemporary history in Athens, always underestimate the EU’s capacity to come to a deal – which has been the case throughout the entire debt crisis in Europe. “So far, the record says we always find a solution.”

But Gandolfo adds that there is a degree of denial that runs through Greek society, especially the view that life can’t get much worse. That denial may be a terrible misreading. Indeed, he says, the distance between what Greeks have lost and what they could yet lose is still huge.

And “traditionally there has been a difficulty on the Greek side to assess the support they have from their friends,” he adds.

He points to the Greco-Turkish war after World War I during the partitioning of the Ottoman Empire, when Greece completely misread the support it had of its allies. It led to bitter defeat known today in Greece as the Asia Minor Catastrophe.

Things might be the same this time, he warns. "[M]aybe the Greek government and the people in Greece don’t see how the mood in Germany and some other countries has radically changed.”