On Thursday, European Council president Donald Tusk delivered the latest, now almost daily, warning to Greece from its weary creditors: "The day is coming, I am afraid, that someone says the game is over."
Uncertainty over whom that someone might be, however, is precisely the reason that day has not yet come. No one wants to be the one to upset the current Nash equilibrium that, while sowing tension, recrimination and ill feelings all around, has kept the game going this long.
No party to these debt negotiations knows more about Nash equilibriums than Greek Finance Minister Yanis Varoufakis, an academic economist who co-authored a textbook on game theory and who took to Twitter after the recent death of John Nash Jr. to express his debt to the genius mathematician.
In its simplest form, a Nash equilibrium exists when no single party to a negotiation perceives that they have anything to gain by unilaterally changing their position. Failure to reach a deal will leave everyone much worse off, but no one wants to break the impasse if it means getting less than they think they could achieve by holding out. It's a high-risk strategy, to say the least.
The Greek "game" would be complex even if the parties agreed on the consequences of no deal. But they don't, and can only speculate. As Mr. Varoufakis told The New York Times, "the game has multiple equilibriums and, therefore, a failure to agree may trigger a chain of outcomes that no one can either predict or control. … Some are painfully aware of the disaster that awaits Europe if Greece defaults. Others are less aware. Some are utterly unaware."
Greece faces a June 30 deadline on a €1.6-billion ($2.2-billion) loan payment to the International Monetary Fund. It needs to reach a deal with its creditors – the IMF, the European Commission and the European Central Bank – to gain access to the bailout cash it needs to service its debts. Without a deal, Greece could be forced to default and abandon the euro for a new currency. Or the game could just go into overtime.
Mr. Varoufakis's boss, Prime Minister Alexis Tsipras, came to power in January by promising to reverse many of the austerity measures the so-called troika of creditors had imposed on Greece in exchange for bailouts totalling €240-billion. Mr. Tsipras's left-wing Syriza government remains popular with voters, even if almost eight in 10 of them want Greece to remain in the euro zone.
The troika insists that Greece carry out the austerity promises made by previous governments. It is also asking for further pension cuts, an increase in sales taxes and for Syriza to hold off for now on its promise to raise the minimum wage and restore collective bargaining in the public sector. This is meant to enable Greece to generate primary budget surpluses large enough to make debt payments without another bailout.
Greece has balked at those conditions, although it said this week that it would run a higher primary surplus than it originally offered. Creditors have little confidence that Greece could achieve its budget targets, however, without swallowing most of the medicine the troika is proposing.
Euro zone finance ministers have taken an increasingly hard line, portraying their meeting next week in Luxembourg as a make-or-break session. Several European officials have also publicly said that the fears of financial contagion from Greece's exit from the euro that drove earlier rounds of negotiations are no longer as acute. But Mr. Tsipras and his team still seem to be banking on those fears to secure a more lenient deal.
"It would be the beginning of the end of the euro zone," Mr. Tsipras said this week of a so-called Grexit. "If Greece fails, the markets will immediately go to look for the next one. If negotiations fail, the cost for European taxpayers would be enormous."
Politics and geopolitics, of course, have a lot to do with all of this. Voters in creditor countries are pressuring their governments to stand tough. Mr. Tsipras faces pressure to resist the troika's demands from his own party's Left Platform faction, whose pro-Russian leader has likened creditors to "ruthless capitalists." And the prospect of Greece moving into the orbit of Russia or China is sending chills up European leaders' spines.
"Uncertainty is when you can't know all of the outcomes or the probability with which each potential outcome will occur," Mr. Varoufakis told the Times. "This is deep uncertainty."
His own textbook is of little help in predicting how this game turns out.