“It is better to be a live jackal than a dead lion, for while there is life there is hope.” And so there is still hope here. The big news here, I think, is that both sides seem want to reach some sort of not-disastrous deal.
Personalities and realpolitik, I think, are the questions here. I don’t believe that the IMF has suddenly turned wholeheartedly Keynesian, personally; my impression is that it’s more a matter of it being easier to vote for things one knows is not going to pass. It is also hard for me to believe that someone as authoritarian as Schäuble has in fact turned over a new leaf. Still, with luck, the members of the troika will end up pointing at each other, providing the plausible deniability for an easing of austerity.
(Originally posted in comments at Crooked Timber.)