Why Greece's surrender to the Eurozone may backfire

With a new €53.5 billion proposal on the table, Greece looks ready to cave to the eurozone's austerity terms in exchange for a new round of bailout funds. But it may actually not be enough.

While the policy differences between the Greek government and its European creditors are smaller than ever, they're still there. In The Financial Times, Peter Spiegel pointed to wiggle room in the Greek budget target, exemptions in the full value-added-tax, and some extra taxes that would activate in case of an emergency, as examples of daylight remaining between the two sides.

More fundamentally, though, the context has changed. The last two weeks have delivered a severe blow to Greece's already weak economy. So the baseline for any future budget projections has likely shifted. Moreover, the new bailout is bigger than what was under discussion when the Europeans made their last offer. "On Friday, Germany made clear that a simple acceptance of old proposals made under the now-expired bailout will not be enough," Spiegel reported.

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In other words, at this point, Greece may not be able to surrender even if it wants to.