Written with as much passion as his lectures on game theory in the early 1990s. The lenders could do with another haircut.
4
Like yeah, but will this be a repeated game? That is the issue for creditors.
1
Reading some of the comments I get the distinct impression that the German national character is not understood. When Germans say “Ja” you can believe it when they say “Nein” you can believe that too. The German public has said “ Nein” to Greece and changes to the bail out structure. Many Germans would like nothing better then to return to the solid Deutsche Mark. German politicians are simply broadcasting the public’s opinion. What we are seeing is a slow, yet painful process of Euro, as a currency, devolving and a return to national currencies. The Euro structure has no way of transferring funds from one member state to another as in the US. Individual European countries are not provinces in larger Euro-State. The last time that occurred was under Roman Imperial rule 2000 years ago.
1
I think there are actually a lot of European citizens who agree with mister Varoufakis.
The problem the EU has is that it's policy making body, which is whofully undemocratic and remains on the same road for far to long, never thought the Greeks would elect a goverment that doesn't agree with them.
How they missed this is a mistake of gargantuan proportion. Who in his right mind would think that if you force a goverment to take the actions the previous goverment took that the people would elect that same goverment?
Dissatisfaction and distrust are 2 of the main ingredients to be guaranteed a new goverment.
The EU must now face that something happend that they in their arrogance didn't think would happen.
The way that the EU representatives are clinging to the old agreements shows just how powerless they actually are and how bad the agreements were. Not just for Greece but it shows how bad the EU is governt as a whole.
The problem the EU has is that it's policy making body, which is whofully undemocratic and remains on the same road for far to long, never thought the Greeks would elect a goverment that doesn't agree with them.
How they missed this is a mistake of gargantuan proportion. Who in his right mind would think that if you force a goverment to take the actions the previous goverment took that the people would elect that same goverment?
Dissatisfaction and distrust are 2 of the main ingredients to be guaranteed a new goverment.
The EU must now face that something happend that they in their arrogance didn't think would happen.
The way that the EU representatives are clinging to the old agreements shows just how powerless they actually are and how bad the agreements were. Not just for Greece but it shows how bad the EU is governt as a whole.
6
Quite an opinion piece. So he is just "asking for a few months of financial stability" - and the rest of the EU will have to finance it, no guarantees, no oversight, no nothing. Just give us the billions on our good name. I don't know how Kant reads in Greek, but this is not the Kant who was talking about behaving in a way on which a universal legislation can be based. If these demands were the basis for universal legislation, the world is doomed.
Greece has not presented any plan so far, no terms, no nothing. Just pure blackmail. Has the minister noted that NOT ONE government of ANY of the EU countries has subscribed to these preposterous demands? Not to mention the tiny fact that a completely new plan (which, I repeat myself, is not on the table at all) needs to be ratified by all these governments and in many cases by their parliaments. All in one week. I don't know what the minister is smoking, but I'd like some of it. For my spare time, not for my on the job performance...
Greece has not presented any plan so far, no terms, no nothing. Just pure blackmail. Has the minister noted that NOT ONE government of ANY of the EU countries has subscribed to these preposterous demands? Not to mention the tiny fact that a completely new plan (which, I repeat myself, is not on the table at all) needs to be ratified by all these governments and in many cases by their parliaments. All in one week. I don't know what the minister is smoking, but I'd like some of it. For my spare time, not for my on the job performance...
7
Hoorah!
Finally real democrats take the stage in the birthplace of democracy!
Finally real democrats take the stage in the birthplace of democracy!
7
Varoufakis-
Ultimately your country will have one choice: exit the Euro and face economic collapse, or agree to the EU's terms. All these speeches by you and Tsipras is just rhetoric and it's getting old.
I hate to tell you, but Germany is more prepared for Greece to leave the Euro, than Greeks are prepared to leave, which means you will blink first if you speak for the people.
And I wouldn't hope that if you default on 200 billion-plus in loans from the EU, revert to Drachmas that the EU will flush your economy full of Euro's and you will recover. I would expect the EU to turn you into pre-Obama Cuba if you default and decide not pay back the money dollar for dollar.
Ultimately your country will have one choice: exit the Euro and face economic collapse, or agree to the EU's terms. All these speeches by you and Tsipras is just rhetoric and it's getting old.
I hate to tell you, but Germany is more prepared for Greece to leave the Euro, than Greeks are prepared to leave, which means you will blink first if you speak for the people.
And I wouldn't hope that if you default on 200 billion-plus in loans from the EU, revert to Drachmas that the EU will flush your economy full of Euro's and you will recover. I would expect the EU to turn you into pre-Obama Cuba if you default and decide not pay back the money dollar for dollar.
3
Why were Americans OK with the Banks being bailed out so they could generate more loans but not the American people being bailed out so they could pay their loans?
Americans are dupes, Greeks are smart.
Americans are dupes, Greeks are smart.
5
What Mr. Varoufakis is asking for is a currency and banking union akin to the United States. One currency, one central bank, and a political /economic arrangement where the tax payers of country aides another in distress. As in the US system where taxes are collected from all and then is allocated to states that need. Germany and the German public has no interested in that type of arrangement. The best that can happen is a return to the drachma, followed by a return of Spain’s peseta and Italy’s lira. The northern Europeans can then have their rump Euro. We will see how France, Holland, Belgium like being dominated by an over reaching Germany.
6
Mr. Varoufakis makes a sly allusion to ancient Greek history when he says, "We are also determined not to be treated as a debt colony that should *suffer what it must* (emphasis added), which I read as referring to the famous Melian dialogue in book 5 of Thucydides's History of the Peloponnesian War, when the small island of Melos tried to opt out of the powerful Athenian Empire but failed and was destroyed by Athens.
Before that, though, the Athenians sent a delegation to Melos to persuade the Melians to submit to Athens or face obliteration--all men killed, women and children enslaved. The Athenians say, We both know that in human affairs justice necessarily prevails between those who are equals in powers, but (we both also know) that those who have the power do what they can and the weak *suffer what they must* (emphasis added): Thucydides 5.89. Realpolitik: might makes right.
Angela Merkel would do well to refresh her memory of ancient Greek history by reading Herodotus's account of the battle of Marathon in 490 BC, when a much smaller army of Athenians defeated a huge army of Persians in a land battle; and the battle of Salamis in 480 BC, when a smaller fleet of Athenian ships outmaneuvered and utterly defeated the massive Persian navy in the narrows in the Saronic Gulf between the island of Salamis and the coast of Attica.
Mr. Varoufakis is saying: Greece will not be bullied, not be forced to submit to the EU, i.e., by *seemingly* all-powerful Germany.
Before that, though, the Athenians sent a delegation to Melos to persuade the Melians to submit to Athens or face obliteration--all men killed, women and children enslaved. The Athenians say, We both know that in human affairs justice necessarily prevails between those who are equals in powers, but (we both also know) that those who have the power do what they can and the weak *suffer what they must* (emphasis added): Thucydides 5.89. Realpolitik: might makes right.
Angela Merkel would do well to refresh her memory of ancient Greek history by reading Herodotus's account of the battle of Marathon in 490 BC, when a much smaller army of Athenians defeated a huge army of Persians in a land battle; and the battle of Salamis in 480 BC, when a smaller fleet of Athenian ships outmaneuvered and utterly defeated the massive Persian navy in the narrows in the Saronic Gulf between the island of Salamis and the coast of Attica.
Mr. Varoufakis is saying: Greece will not be bullied, not be forced to submit to the EU, i.e., by *seemingly* all-powerful Germany.
22
The world is depending on and thanks you, Sir.
8
Bottom line: Greece - you borrowed money on the promise that you would repay it.
Honor your self-made obligations or seek creditor protection in the courts.
Honor your self-made obligations or seek creditor protection in the courts.
3
They are honoring them. The problem is that the terms gaurentee failure and that's what he wants to change.
7
If, as your ante-penultimate paragraph suggests, you intend to repay the debts contracted by previous governments in full, and to refrain for taking on additional debts that will be difficult to repay, than I applaud you and am all in favor of your plans.
However, many of the reports in this country seem to suggest the writing off of debt, accumulated interest, or both. This may be a result of inaccurate reporting, in which case I remain supportive and suggest that you make it perfectly clear that this is not your intent. Failing your making such a simple statement of intent, however, I and many others retain a degree of healthy skepticism towards your negotiations.
However, many of the reports in this country seem to suggest the writing off of debt, accumulated interest, or both. This may be a result of inaccurate reporting, in which case I remain supportive and suggest that you make it perfectly clear that this is not your intent. Failing your making such a simple statement of intent, however, I and many others retain a degree of healthy skepticism towards your negotiations.
3
Today Greece needs to refinance bonds which will then be at well above average rates. Why aren't regulated financial products like bonds, loans, credit cards, and mortgages priced like almost everything else?
When we walk into a store we expect to pay the same price for one item as anybody else. It was not always so. In the past it was common for the rich and important and friends to pay less. (Mark Twain's 'The Million Pound Bank Note'). In America it was partly Quaker merchants charging one price for all that changed how we usually do business. Today discounts are offered mostly as promotions or for quantity.
But in finance the least shall suffer most. Sub-prime rates, credit cards at > 15%, loans, etc. claim to be based on the lender's perceived risk but have the odd feedback effect of increasing the likelihood of default, as with Greece, Italy, Spain, Ireland, Brazil, etc.
If these regulated instruments were required to be flat priced, it might cost the rich more to borrow, but it would also reduce rates of default and runaway feedback of defaults during recession. Full payments would help economies.
When we walk into a store we expect to pay the same price for one item as anybody else. It was not always so. In the past it was common for the rich and important and friends to pay less. (Mark Twain's 'The Million Pound Bank Note'). In America it was partly Quaker merchants charging one price for all that changed how we usually do business. Today discounts are offered mostly as promotions or for quantity.
But in finance the least shall suffer most. Sub-prime rates, credit cards at > 15%, loans, etc. claim to be based on the lender's perceived risk but have the odd feedback effect of increasing the likelihood of default, as with Greece, Italy, Spain, Ireland, Brazil, etc.
If these regulated instruments were required to be flat priced, it might cost the rich more to borrow, but it would also reduce rates of default and runaway feedback of defaults during recession. Full payments would help economies.
2
The interest rates for loans, bonds, etc., depend upon your credit rating.
Greece has one of the worst credit ratings of any sovereign nation in the world.
And I believe that this is the way that it should be!
Greece has one of the worst credit ratings of any sovereign nation in the world.
And I believe that this is the way that it should be!
2
Dear Mr. Varoufakis,
I applaud your determination to “clash with might vested interests in order to reboot Greece and gain our partner’s trust…’ and “not to be treated as a debt colony that should suffer what it must.” But to cite “Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right” as the major reason for the fight is to turn the Kantian morality on its head.
Kant is the cause of the Greek problem in particular and the Euro problem in general, not their solution.
For Kant, universality is the criterion for moral law: it is immoral to lend money to others whom one knows would not pay back, because its universal practice would collapse the system. But some of us would and do lend money to others even though we know they would not pay back. Kant denies such innate moral knowing.
Kant also argues in his universal principle of right that human actions should be governed by law that guarantees that everybody has equal amount of right to freedom (to act). This is the basis of the Euro system: each member abides by the same inflation rate, same deficit target rate, “fair and square,” regardless of the ability in each, by whatever causes, to be that ‘equal’ because we are equal by definition of the law. Kant, of courses, recognizes that this is just a principle of right, not a rule for being virtuous.
No two of us are ever equal, within the family, in the community or between nations.
I applaud your determination to “clash with might vested interests in order to reboot Greece and gain our partner’s trust…’ and “not to be treated as a debt colony that should suffer what it must.” But to cite “Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right” as the major reason for the fight is to turn the Kantian morality on its head.
Kant is the cause of the Greek problem in particular and the Euro problem in general, not their solution.
For Kant, universality is the criterion for moral law: it is immoral to lend money to others whom one knows would not pay back, because its universal practice would collapse the system. But some of us would and do lend money to others even though we know they would not pay back. Kant denies such innate moral knowing.
Kant also argues in his universal principle of right that human actions should be governed by law that guarantees that everybody has equal amount of right to freedom (to act). This is the basis of the Euro system: each member abides by the same inflation rate, same deficit target rate, “fair and square,” regardless of the ability in each, by whatever causes, to be that ‘equal’ because we are equal by definition of the law. Kant, of courses, recognizes that this is just a principle of right, not a rule for being virtuous.
No two of us are ever equal, within the family, in the community or between nations.
9
Yanis Varoufakis,
I do not know why anyone could ever refer to the Gross National Domestic Product (GDP) of any nation as any indication of that nation’s economic strength, unless the expense and the economic activity of spending borrowed money on wealth-consuming government activities such as infrastructure improvements, wars, law enforcement, water and sewers, streets and bridges, fire protection, welfare, government employee payrolls, social security and other similar wealth consuming activities paid for with tax collections are not included into that GDP.
A nation's GDP has nothing to do with that nation’s economic strength or the ability of that nation to repay their national debt, especially that part of the GDP activity that was government borrowing money from wealth-producing entities in the industrial wealth-creating nations and then spends that borrowed money to pay for wealth consuming bureaucratic government payrolls, infrastructure, unemployment benefits, education, welfare, retirement pensions, high speed rail, free medical services, housing, wars, social services, pork barrel projects and other tax-funded bureaucratic jobs that do not produce any new national wealth that the nation could tax to collect money to pay for their government activities?
With US federal and local government tax paid wealth consuming activities at more than 42 percent of the US GDP and then included or added into the US GDP, the US GDP number is now almost meaningless!
I do not know why anyone could ever refer to the Gross National Domestic Product (GDP) of any nation as any indication of that nation’s economic strength, unless the expense and the economic activity of spending borrowed money on wealth-consuming government activities such as infrastructure improvements, wars, law enforcement, water and sewers, streets and bridges, fire protection, welfare, government employee payrolls, social security and other similar wealth consuming activities paid for with tax collections are not included into that GDP.
A nation's GDP has nothing to do with that nation’s economic strength or the ability of that nation to repay their national debt, especially that part of the GDP activity that was government borrowing money from wealth-producing entities in the industrial wealth-creating nations and then spends that borrowed money to pay for wealth consuming bureaucratic government payrolls, infrastructure, unemployment benefits, education, welfare, retirement pensions, high speed rail, free medical services, housing, wars, social services, pork barrel projects and other tax-funded bureaucratic jobs that do not produce any new national wealth that the nation could tax to collect money to pay for their government activities?
With US federal and local government tax paid wealth consuming activities at more than 42 percent of the US GDP and then included or added into the US GDP, the US GDP number is now almost meaningless!
2
Europe is really caught in a bind--and with no exit plan, or even a suitable way out. When the Eurozone was being established 25 years ago, ten German Economists sued their country to stop its implementation. They lost their case since politics got in the way. But now, the certain WIN-WIN situation has finally been realized as a sure LOSE-LOSE.
Forcing debtor countries into an Austerity Program, which contracts the economy can never improve the situation, or reduce the debt. It reduces jobs, places greater demands on the social safety net and reduces the tax rolls. The debt, however, does not contract. In fact, there ends-up being less money to repay it. Stimulus, on the other hand, creates jobs (with a multiplier effect), increases the tax rolls, reduces the demands on the safety net and provides additional money to pay-down the debt, perhaps even somewhat faster.
The U.K, the second largest economy in the E,U, has avoided ever joining the common currency, the Euro. In May, during its National Elections, there might be consideration to leave the E.U. completely, taking back some of the authority that Great Britain had transferred to Europe. No doubt, many of the other groups, on both the Right and the Left, throughout Europe--who wish to leave the E.U, the Euro or both--are watching both Greece and the U.K.
http://thetruthoncommonsense.com
Forcing debtor countries into an Austerity Program, which contracts the economy can never improve the situation, or reduce the debt. It reduces jobs, places greater demands on the social safety net and reduces the tax rolls. The debt, however, does not contract. In fact, there ends-up being less money to repay it. Stimulus, on the other hand, creates jobs (with a multiplier effect), increases the tax rolls, reduces the demands on the safety net and provides additional money to pay-down the debt, perhaps even somewhat faster.
The U.K, the second largest economy in the E,U, has avoided ever joining the common currency, the Euro. In May, during its National Elections, there might be consideration to leave the E.U. completely, taking back some of the authority that Great Britain had transferred to Europe. No doubt, many of the other groups, on both the Right and the Left, throughout Europe--who wish to leave the E.U, the Euro or both--are watching both Greece and the U.K.
http://thetruthoncommonsense.com
3
Winston Churchill once stated, “I contend that for a nation to try to tax (and spend) itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
1
Yanis Varoufakis,
Every civilization has always tried to create sufficient privately owned wealth in order for governments to confiscate some of this wealth as required to create sufficient government financial resources to pay for the following services for the general public, in order to relieve the general public from being individually responsible for providing the following services:
1. Provide for the common military defense;
2. Pay for the construction of the common infrastructure elements that we all enjoy;
3. Pay for police, fire fighters, educators, and a judicial system;
4. Take care of those citizens that cannot take care of themselves;
5. Provide various nonessential government expenses such as libraries, museums, zoos, parks, hospitals, environmental cleanups, NASA, Green Energy, unemployment payments, and other nice but unnecessary feel-good services that serve the total population.
Maybe these items should be a part of the definition of civilization, even if these are just only some of the main (unwritten social contract) reasons for creating a civilization.
There are however, real limits to the amount of government expenditures that the taxpayers can afford to pay for their government activities before their government goes bankrupt when the businesses leave that nation, city, state, etc.!
Every civilization has always tried to create sufficient privately owned wealth in order for governments to confiscate some of this wealth as required to create sufficient government financial resources to pay for the following services for the general public, in order to relieve the general public from being individually responsible for providing the following services:
1. Provide for the common military defense;
2. Pay for the construction of the common infrastructure elements that we all enjoy;
3. Pay for police, fire fighters, educators, and a judicial system;
4. Take care of those citizens that cannot take care of themselves;
5. Provide various nonessential government expenses such as libraries, museums, zoos, parks, hospitals, environmental cleanups, NASA, Green Energy, unemployment payments, and other nice but unnecessary feel-good services that serve the total population.
Maybe these items should be a part of the definition of civilization, even if these are just only some of the main (unwritten social contract) reasons for creating a civilization.
There are however, real limits to the amount of government expenditures that the taxpayers can afford to pay for their government activities before their government goes bankrupt when the businesses leave that nation, city, state, etc.!
2
Look, I'm sympathetic to the Greeks who are suffering -- there was clearly a lot of predatory (or at least sloppy) lending, and the current austerity terms seem almost punitive.
That being said, surely Mr. Varoufakis has got to appreciate how an invitation to "dissolve the creditor-debtor distinction" sounds a lot less magnanimous when _you're_ the debtor.
That being said, surely Mr. Varoufakis has got to appreciate how an invitation to "dissolve the creditor-debtor distinction" sounds a lot less magnanimous when _you're_ the debtor.
4
Possibly you mean "creditor."
3
Wonderfully eloquent but slightly misleading, Mr Varoufakis.
I'm no expert on game theory, but talking about red lines that must not be crossed sounds like old fashioned positional negotiating to me. So don't be surprised if the other EU finance ministers react in kind.
The suffering of the Greek people is real and you are right to seek more support from your EU partners. That might be easier, though, if you start to understand their position. EU tax payers have shouldered a massive load, not just 'to bail out the banks', but to prevent Greece from defaulting and averting a Lehman Brothers-like crisis in Europe. In the process much of Greek debt has already been converted to long-term, low interest loans. Now you want further debt reduction. But do you care how that might affect the situation in Portugal, Spain and Italy?
So far I only hear you stating positions and making demands, not working on a solution that is acceptable to all. But admittedly, you do so very eloquently.
I'm no expert on game theory, but talking about red lines that must not be crossed sounds like old fashioned positional negotiating to me. So don't be surprised if the other EU finance ministers react in kind.
The suffering of the Greek people is real and you are right to seek more support from your EU partners. That might be easier, though, if you start to understand their position. EU tax payers have shouldered a massive load, not just 'to bail out the banks', but to prevent Greece from defaulting and averting a Lehman Brothers-like crisis in Europe. In the process much of Greek debt has already been converted to long-term, low interest loans. Now you want further debt reduction. But do you care how that might affect the situation in Portugal, Spain and Italy?
So far I only hear you stating positions and making demands, not working on a solution that is acceptable to all. But admittedly, you do so very eloquently.
2
HolgerDownUnder says...But do you care how that might affect the situation in Portugal, Spain and Italy? You've unintentionally exposed the weak hand of the EU. As Greece holds out, the more likely the other nations in similar situations will hold out. Soon the entire hundreds of trillions of dollars-worth of speculative holdings throughout the Western finance system will become silly paper. Economic ministers will then begin discussing what wealth is and is not. Yanis provides a good description of the former.
4
Mr Varoufakis, right before the recent election in Greece your party's leader said that after the election you will be playing a certain greek folk instrument and the markets will be dancing. Let's see what tunes you have played up to now: you asked for debt forgiveness, fell to deaf ears. You asked for a European conference on debt, fell on deaf ears. You asked for a political solution (i.e. like someone who went bankrupt going to court saying I'm a good guy) fell to deaf ears. Change your tune. You are right, no times for more games in Europe.
6
1. Does Greece have a particularly large public sector which is grossly inefficient and corrupted?
No really true. While the Greek state is not properly organized and it is not efficient the number of employees is proportionally the same with other European countries according to every international and European data. If you don't believe me google it yourself.
2. Does the new government want to rehire the those who were fired because of submitting false documents?
False. They want to rehire those who were fired to satisfy Troika demands regardless of their performance.
3. Do they refuse to evaluate public employees?
No, They just want to replace the current system of evaluation with another based on objective markers of performance and not on subjective criteria or oppressive mechanisms. For instance: did you know that according to the current system no matter how well public servants perform about 10% of its employees must receive the highest evaluation and about 30% the lowest?
4. Why the new government does not want reforms?
They say they want reforms but not the ones which deregulate completely the market and they force employees to work for 300 $ per month. Prices are higher than prices in the US;. How many American citizens would accept that?
5. The public sector does not create jobs.
False. All the Northern European countries Sweden for instance has a large public sector besides the private sector .Google about their high quality of life.
No really true. While the Greek state is not properly organized and it is not efficient the number of employees is proportionally the same with other European countries according to every international and European data. If you don't believe me google it yourself.
2. Does the new government want to rehire the those who were fired because of submitting false documents?
False. They want to rehire those who were fired to satisfy Troika demands regardless of their performance.
3. Do they refuse to evaluate public employees?
No, They just want to replace the current system of evaluation with another based on objective markers of performance and not on subjective criteria or oppressive mechanisms. For instance: did you know that according to the current system no matter how well public servants perform about 10% of its employees must receive the highest evaluation and about 30% the lowest?
4. Why the new government does not want reforms?
They say they want reforms but not the ones which deregulate completely the market and they force employees to work for 300 $ per month. Prices are higher than prices in the US;. How many American citizens would accept that?
5. The public sector does not create jobs.
False. All the Northern European countries Sweden for instance has a large public sector besides the private sector .Google about their high quality of life.
2
Yanis Varoufakis,
The balance of foreign trade and the national debt changes are the primary indicators of whether a nation is creating taxable wealth or consuming (selling or mortgaging) the existing taxable wealth that was created by previous generations prior to de-industrialization of those nations to pay for government activities.
Maybe nations can no longer afford to borrow money to pay for unemployment, police, fire protection, courts, social services, welfare, green projects, wars, weapons, environmental projects, infrastructure expansion, space exploration, social entitlements, free medicine, subsidized housing, artists, musicians, poets, historians, hair dressers, and other bureaucratic expenses, especially since these bureaucratic jobs and government activities do not produce any of the food, shelter, and clothing required to sustain life or create wealth to repay their national debt, and/or reduce their foreign trade deficit.
Any family, tribe, city, country, nation, etc., and its individual members can prosper or become debt ridden in accordance with their industrial behavior, government spending behavior, and/or other economic actions of
that family. If any family or nation purchased imported things from outside of their family of less monetary value than the monetary (or otherwise useful value) of the items that they sold and exported to others outside of their family, then that family would have a net positive foreign trade balance into that family.
The balance of foreign trade and the national debt changes are the primary indicators of whether a nation is creating taxable wealth or consuming (selling or mortgaging) the existing taxable wealth that was created by previous generations prior to de-industrialization of those nations to pay for government activities.
Maybe nations can no longer afford to borrow money to pay for unemployment, police, fire protection, courts, social services, welfare, green projects, wars, weapons, environmental projects, infrastructure expansion, space exploration, social entitlements, free medicine, subsidized housing, artists, musicians, poets, historians, hair dressers, and other bureaucratic expenses, especially since these bureaucratic jobs and government activities do not produce any of the food, shelter, and clothing required to sustain life or create wealth to repay their national debt, and/or reduce their foreign trade deficit.
Any family, tribe, city, country, nation, etc., and its individual members can prosper or become debt ridden in accordance with their industrial behavior, government spending behavior, and/or other economic actions of
that family. If any family or nation purchased imported things from outside of their family of less monetary value than the monetary (or otherwise useful value) of the items that they sold and exported to others outside of their family, then that family would have a net positive foreign trade balance into that family.
1
Greece has taken their cue from the American mortgage deadbeats: stop paying and blame the lender.
4
Except they're still paying. Defaulting is the last thing they want.
2
Not sure whether I understand this: if Greek wants to change and end corruption and tax evasion, the new government has all the power it needs. What has Germany to do with it? If Greek wants to declare bankruptcy, they can do that too. What have the other Europeans to do with it? Greeks have fallen on hard times. But why is this the fault of Europe? However, if the Greeks want help, they might want to start to listen to the rest of Europe. So, they are free to choose whatever they like including not stepping over their red lines.
4
The Germans have EVERYTHING to do with it. The problem here isn't the reform of tax collection or combating corruption (things this government are clearly committed to). The problem is that the current loan agreement between Greece and the Troika (EU, IMF, and ECB - but largely influenced by Germany) doesn't allow for deviation from current policies of austerity, mass privatisation, internal devaluation (cuts in worker wages in nominal and real terms), and mandated budgetary surpluses of 4.5%. These are policies that have clearly failed by anyone who takes a moment to inspect the figures: 25% unemployment, 50% youth unemployment, deflationary spiral, 90% of company share values gone *poof*. The main thing that the Greeks are asking is for a more generous repayment scheme by reducing the mandated budgetary surpluses from 4.5% so that the government can invest in public projects and grow their economy. What the Greeks want is entirely reasonable.
8
Many of us here in France are holding our breath and crossing our fingers that Varoufakis's views will prevail. This issue is keeping us awake at night with anxiety and hope.
The current French president, Hollande, made similar promises to the French electorate a few years ago (before his election). Among them were his stirring speech that included "my enemy is the financial sector" and his stated determination to stand firm against Merkel on the abusive austerity policies that were (and still are) in place in all of Europe. Hollande told us only lies...
Greece was the first of the dominos to go down, but "we are all Greeks" is not only a rallying cry on placards as we demonstrate in Paris streets to stand beside them on this issue. We are staring into our dismal future if we allow the current austerity policies to continue to strangle Europe. Bravo Syriza!
The current French president, Hollande, made similar promises to the French electorate a few years ago (before his election). Among them were his stirring speech that included "my enemy is the financial sector" and his stated determination to stand firm against Merkel on the abusive austerity policies that were (and still are) in place in all of Europe. Hollande told us only lies...
Greece was the first of the dominos to go down, but "we are all Greeks" is not only a rallying cry on placards as we demonstrate in Paris streets to stand beside them on this issue. We are staring into our dismal future if we allow the current austerity policies to continue to strangle Europe. Bravo Syriza!
7
Yep.
1
Mr. Varoufakais is to be commended for elevating the quality of this discussion. His op-ed clearly demonstrates the power of a highly developed mind. Thanks for publishing the Greek POV straight from the source.
3
A more rational view of the situation is that the Greek debt can never be paid, or at least not by the collective pain of ordinary Greek citizens. It is demanding "blood out of a turnip" to believe that it can.
The debt of the American bubble will never be paid ... it was simply added to the national debt. Hopefully a combination of growth and gradual inflation will whittle it's significance away ... but we'll see.
The American bubble amounted to public debt being used to feed the banisters, and then letting them off Scot-free. Almost nobody went to jail, and very few even had their gains taken away from them.
The issue with Greek debt is that there is no accounting of who got the money and where it went. Demanding that ordinary Greek citizens pay it off is morally bankrupt if they didn't get it.
The Greek government now has a small primary surplus -- it needn't impose more stringency to avoid borrowing. The banksters have gotten their money out of Greece -- converting to a Drachma and a forced devaluation will not catch them. Morality will not be served... but then it rarely is.
Greece needs to deal with the corruption and systemic tax evasion if it is to have any reasonable economy. Leaving the Euro may be the way that Greece forces itself to do that.
The debt of the American bubble will never be paid ... it was simply added to the national debt. Hopefully a combination of growth and gradual inflation will whittle it's significance away ... but we'll see.
The American bubble amounted to public debt being used to feed the banisters, and then letting them off Scot-free. Almost nobody went to jail, and very few even had their gains taken away from them.
The issue with Greek debt is that there is no accounting of who got the money and where it went. Demanding that ordinary Greek citizens pay it off is morally bankrupt if they didn't get it.
The Greek government now has a small primary surplus -- it needn't impose more stringency to avoid borrowing. The banksters have gotten their money out of Greece -- converting to a Drachma and a forced devaluation will not catch them. Morality will not be served... but then it rarely is.
Greece needs to deal with the corruption and systemic tax evasion if it is to have any reasonable economy. Leaving the Euro may be the way that Greece forces itself to do that.
4
Any new Greek government freshly printed paper money (Drachmas after Greek bankruptcy) would not be honored to purchase anything in Greece or anywhere else. If the Greeks withdraw from the EU, they probably would still have to use US dollars and/or Euros for their daily business operations, retail and wholesale.
1
There is a typical line of argument here which seems backwards to me. Greece "being treated as a debtor colony" is a backwards description. Greece IS a debtor. That is not in question. Greece has not been treated as a colony: they have held their own elections, chosen their own path, in my opinion they have consistently chosen poorly, but they have been allowed to choose their own path. The fact that there are limits to the conditions in which they can borrow is not an external imposition, it is just a fact of life that with less ability to repay and less trust in repayment borrowing becomes more expensive. The Greeks have chosen their own path. In response to a public funding crisis they chose to overpay pensioners (13 month bonus program), keep the expensive cronies on the government payroll, and fire the cleaning ladies. Those are choices the Greek public made in their past elections. I am hoping that this latest election represents a different choice, but I don't know that yet. The new government talks about rehiring the cleaning ladies, but I don't assume the Greek public will let them remove the expensive cronies from the government payroll. Government after government has promised rooting out corruption and utterly failed when the public realizes that their personal corrupt cronies may be on the list.
6
Now is their turn to put in their own cronies in positions of power and repay favors. A communist party is especially prone to corruption and cronyism.
2
The Greek Population elected the previous governments, maybe because the previous governments promised the Greek People more money out of the Greek Treasury!
2
What an amazing, refreshing piece of clear thinking and clear writing. The problem is not Greece's. The problem is Europe's and especially the European Union's. Generally, for the EU to pass major legislation, all must agree. Guess what. Greece does not agree. Fool me twice, shame on you.
Goliath had better back down, or be ready to duck. That kid with the sling is a good shot, and he knows he cannot bluff.
Goliath had better back down, or be ready to duck. That kid with the sling is a good shot, and he knows he cannot bluff.
13
Most of the loans to Greece now are from other countries. Like Germany. If Germany puts conditions on the loans then Greece can either accept them and the money or not. The matter here concerns loans made under the previous administration which did accept the terms. Therefore Greece can either pay and keep the terms, default or try to renegotiate. They are taking the third option. However Germany, or the other lenders, are under no obligation to accept new terms. If Greece defaults then the EU can/will consider whether or not it wants to allow Greece to remain in the EU. Greece will not have veto authority over that vote. If Greece remains then the ECB can consider loans under new terms. If Greece exits then the will have to resort to the Drachma. Good luck keeping inflation in check then. The people will suffer far more than they have under imposed austerity.
Clearly this is a game of chicken and Greece has the weak hand. The exit of Greece from the Euro would have less ramifications now than before because there is less exposure to private banks. Default would hit countries but not companies. It is easier to absorb as a country.
Clearly this is a game of chicken and Greece has the weak hand. The exit of Greece from the Euro would have less ramifications now than before because there is less exposure to private banks. Default would hit countries but not companies. It is easier to absorb as a country.
1
Wars, unemployment payments, social security, welfare, and other government activities, including creating green energy and infrastructure pork barrel projects only consume or destroy a nation’s wealth.
2
2/10/2015 Greek Prime Minister Alexis Tsipras sought to send Berlin a message this week by demanding that Germany pay Athens billions of euros in World War II-related reparations and unpaid debt.
Greece, Mr. Tsipras said in his inaugural address in parliament, has “a moral obligation to our people, to history, to all European peoples who fought and gave their blood against Nazism” to pursue the reparations. The country was ravaged during the Germans’ four-year occupation, a history that remains fresh despite the passage of time.
The leftist prime minister’s move to confront Germany with what most Greeks see as Berlin’s outstanding debt to Athens is a theme that has played out repeatedly in his first days in power, as the new government has tried to use a mix of economic argument and moral suasion to win leniency from its creditors.
http://www.wsj.com/articles/greece-seeks-to-make-war-reparations-part-of...
Greece, Mr. Tsipras said in his inaugural address in parliament, has “a moral obligation to our people, to history, to all European peoples who fought and gave their blood against Nazism” to pursue the reparations. The country was ravaged during the Germans’ four-year occupation, a history that remains fresh despite the passage of time.
The leftist prime minister’s move to confront Germany with what most Greeks see as Berlin’s outstanding debt to Athens is a theme that has played out repeatedly in his first days in power, as the new government has tried to use a mix of economic argument and moral suasion to win leniency from its creditors.
http://www.wsj.com/articles/greece-seeks-to-make-war-reparations-part-of...
1
And of course this kind of debt neither can be forgiven, nor negotiated.
So let's take a look what the greeks want (11 Billion Euro) for sins 70 years ago, what the german taxpayers loaned to greece (58 Billion Euro) 2 years ago, and start moralizing in the favor of greece...
So let's take a look what the greeks want (11 Billion Euro) for sins 70 years ago, what the german taxpayers loaned to greece (58 Billion Euro) 2 years ago, and start moralizing in the favor of greece...
Smoke-screen alert! Greece did not over-spend and over-borrow beyond its means because they were occupied 70 years ago. This happened because they wanted to engage in the ideal of European Socialism, without the industry or commerce to pull it off.
1
But a debt's a debt, right?
2
How do the Germans feel about being lectured on Immanuel Kant by a Greek debtor? If they have a good sense of humour, they will laugh at it!
3
Perhaps they will then go to read Immanual Kant .. and take it on board!
2
Yanis Varoufakis,
Most of the people in the USA have the impression that most of the Greek Citizens live off of Greek Government paychecks or Greek Government Contracts.
The Greek Government has spent much more than they collected in taxes on these government activities, and borrowed money (sold sovereign Greek Government Treasury Bonds obligating future unborn Greek citizens to repay these Bonds) in order to continue these costly activities!
More borrowed money (actually more proceeds from freshly printed paper Greek Sovereign Treasury bond sales) to the Greek or the other PIIGS governments is like giving a recovering alcoholic more booze on credit by allowing the Greek government to borrow more money to buy booze on credit by increasing his credit limit at his favorite liquor store charge account.
Why should the citizens of other European Nations work hard every day to create taxable wealth and then continuously loan some of that money to the Greek government so that Greek citizens can live off of their bloated government payrolls and social safety nets without the Greek citizens working at all to create very much taxable wealth in the Greek Nation???
Should the Greeks not be required to honor their bonds?
Why should Greek Government employees get six weeks paid vacation each year?
Why should Greek Government employees get paid retirement at lower ages that the people that are loaning the Greek government their wealth to pay for those retirement pensions?
Most of the people in the USA have the impression that most of the Greek Citizens live off of Greek Government paychecks or Greek Government Contracts.
The Greek Government has spent much more than they collected in taxes on these government activities, and borrowed money (sold sovereign Greek Government Treasury Bonds obligating future unborn Greek citizens to repay these Bonds) in order to continue these costly activities!
More borrowed money (actually more proceeds from freshly printed paper Greek Sovereign Treasury bond sales) to the Greek or the other PIIGS governments is like giving a recovering alcoholic more booze on credit by allowing the Greek government to borrow more money to buy booze on credit by increasing his credit limit at his favorite liquor store charge account.
Why should the citizens of other European Nations work hard every day to create taxable wealth and then continuously loan some of that money to the Greek government so that Greek citizens can live off of their bloated government payrolls and social safety nets without the Greek citizens working at all to create very much taxable wealth in the Greek Nation???
Should the Greeks not be required to honor their bonds?
Why should Greek Government employees get six weeks paid vacation each year?
Why should Greek Government employees get paid retirement at lower ages that the people that are loaning the Greek government their wealth to pay for those retirement pensions?
10
This is all false.
According to all statistics Greeks work MORE hours per year than the average European citizen. If you don;t believe me-- google it.
Including vacation time is like any other european nation. Again google it, It is easy to find out- if you are curious.
Retirement the same. And worse. Very few people were allowed to receive pensions ( ...250 $ per moth ) in a younger age -- in the past. It does not exist anymore.
According to all statistics Greeks work MORE hours per year than the average European citizen. If you don;t believe me-- google it.
Including vacation time is like any other european nation. Again google it, It is easy to find out- if you are curious.
Retirement the same. And worse. Very few people were allowed to receive pensions ( ...250 $ per moth ) in a younger age -- in the past. It does not exist anymore.
2
Pure arrogance. Greeks were given all the benefits of an EU membership without fulfilling the EU basic fiscal requirements. All those EU funds that got squandered on cushy deals for the well connected, and 13th salaries for everyone, they need to be repaid
4
About those 13 salaries you mention: An annual salary would be offered and, if accepted, was divided into either 13 or 14 payments, depending on the employer policies. The 13th was paid in early December. The 14th was split into two payments - one half at Easter and the other half for summer vacation - typically August. Thus, cutting both the 13th & 14th 'salaries' has resulted in an annual income reduction of 14.29% for all employees across the board (plus recent reductions in annual salaries). How you would like your forced salary reduction 'managed', if it happened to you?
3
If your family (or your nation) makes widgets, then your family must make and then sell enough widgets to others outside of your family so that your family can accumulate enough profit and wealth to enable them to buy other things that your family needs from others that produce those other things.
Then hopefully you will then have enough left over to accumulate more wealth for any future emergencies.
Or you can live on credit cards until the lenders of real wealth stop increasing your credit limit.
Or a nation can print and sell "Sovereign Treasury Bonds" and spend the proceeds on wealth consuming government activities that do not create any new taxable wealth.
Nations like Greece and the USA have discovered that they can obligate their future unborn generations to repay their national debts (Sovereign Treasury Bonds) after current citizens have their federal government spend all of that "borrowed money" on themselves.
Then hopefully you will then have enough left over to accumulate more wealth for any future emergencies.
Or you can live on credit cards until the lenders of real wealth stop increasing your credit limit.
Or a nation can print and sell "Sovereign Treasury Bonds" and spend the proceeds on wealth consuming government activities that do not create any new taxable wealth.
Nations like Greece and the USA have discovered that they can obligate their future unborn generations to repay their national debts (Sovereign Treasury Bonds) after current citizens have their federal government spend all of that "borrowed money" on themselves.
3
The new Greek government is inexperienced and is playing off base. Mr. Tsipras had practically never traveled outside Greece before his ascend into public politics. Mr. Varoufakis looks like the academic who is finally getting his share of celebrity exposure. These comments on "game theory" come off as pretty basic and amateurish. One cannot negotiate with someone who does not know what he wants. I hope the transition from teenage years to adulthood happens fast because the "game theorist" will be severely and quite likely disastrously outplayed.
3
Seems more like an Ad Hominem than a point to me. Of course Varoufakis knows what he wants to negotiate. Let's be serious.
1
As someone who has worked in Strategic Sourcing for over 20 years and has led some very difficult negotiations, two red flags (sorry for the pun) stand out in the Minister's opinion peace: 1). Waging war with "mighty vested interests" will not accomplish anything constructive. If you want to accomplish your objectives in any negotiation, you don't wage "war", but you find some common ground, and reach for win-win outcomes. That's how you can change the tide and move towards progress. 2) Promising reform to the Western "partners" is a difficult premise when you are a member of a backward, failed ideology-- Communism, which stands for nationalizing businesses, higher taxation, and centralized government.... all anti-progress positions that are anti-West. If the Minister was a member of a new but center, center right, party his pro-business and economic growth messages would have more weight and credibility. Shame. I don't see with these two "red flags" any constructive progress being made, and I see him returning to Greece, saying "we tried" and then proceeding with emergency measures of nationalizing and controlling the engine of growth, private businesses, while disincentivising any meaningful new investments in our country, or hard work to succeed -- if all you face as a reward is higher taxes. The mass exodus out of Greece of money and talent will continue and accelarate under this scenario. That's a law of economics even Mr. Yaroufakis cannot argue against.
9
"The mass exodus out of Greece of money and talent will continue and accelerate under this scenario. That's a law of economics even Mr. Yaroufakis cannot argue against."
No. But is is something the new Greek Government is trying to stop.
No. But is is something the new Greek Government is trying to stop.
2
If you can see that reform is needed in the EU to prevent it's collapse anyway then wouldn't it be imprudent to neglect to address those issues as part of the negotiation? No point in making compromises if making those compromises lead to the same end as refusing to negotiate.
He mentions Kant at the end for a reason: The EU needs to reform itself to prevent it's own eventual destruction. As it stands, the EU is only willing to take the short-term, convenient option of "business as usual" rather than take a good look at itself - this at the expense of the moral duty to protect it's citizens from hardship and poverty (and a rise in fascism) whilst protecting the profit-taking of financial institutions.
He mentions Kant at the end for a reason: The EU needs to reform itself to prevent it's own eventual destruction. As it stands, the EU is only willing to take the short-term, convenient option of "business as usual" rather than take a good look at itself - this at the expense of the moral duty to protect it's citizens from hardship and poverty (and a rise in fascism) whilst protecting the profit-taking of financial institutions.
2
To be honest, I really appreciate what Mr. Varoufakis is doing. And I am sure that there are a lot of people on his side even here in America and we are hoping that he can help lead the Greek people out of wilderness, into a new era of prosperity and well-being.
5
I think the Finance Minister of Greece makes a lot of sense, and he has the backing of his people. I don not expect the Government of Greece to cross its "red lines". The key question is whether it will have the political support to implement the structural reforms it intends to achieve for confronting the conditions that initially gave rise to the debt crisis.
The first requirement for an agreement with the creditors is confidence that he can do this. It will take a lot of time because it means undoing and recreating a whole philosophy and infrastructure of how Greece is governed and operates.
It will be much easier to achieve his structural reform objectives if he is not at the same time confronted with a liquidity crisis, so he needs at the very least temporary debt relief that does not involve adding more interest to the existing debt load. And he needs to deliver relief from the worst impacts of austerity.
If the other European governments fail to understand this and fail to negotiate - rather than demand - it is likely that Greece will default, leaving many sovereign and commercial creditors in the lurch.
It does not necessarily mean an exit from the Euro. The debt and the handling of the debt are self-standing matters regardless of the currency. Membership in the Eurozone would be more influenced by whether it allows Greece sufficient control over its economic agenda to achieve its objectives as it sees fit.
The first requirement for an agreement with the creditors is confidence that he can do this. It will take a lot of time because it means undoing and recreating a whole philosophy and infrastructure of how Greece is governed and operates.
It will be much easier to achieve his structural reform objectives if he is not at the same time confronted with a liquidity crisis, so he needs at the very least temporary debt relief that does not involve adding more interest to the existing debt load. And he needs to deliver relief from the worst impacts of austerity.
If the other European governments fail to understand this and fail to negotiate - rather than demand - it is likely that Greece will default, leaving many sovereign and commercial creditors in the lurch.
It does not necessarily mean an exit from the Euro. The debt and the handling of the debt are self-standing matters regardless of the currency. Membership in the Eurozone would be more influenced by whether it allows Greece sufficient control over its economic agenda to achieve its objectives as it sees fit.
4
I would like to read a reply to this OP-ED from the 'other' side', the view of the other Euro Countries. So far only Greece' interests are well presented, especially through Krugman.
6
Here's mine, from France...Many of us here in France are holding our breath and crossing our fingers that Varoufakis's views will prevail. This issue is keeping us awake at night with anxiety and hope.
The current French president, Hollande, made similar promises to the French electorate a few years ago (before his election). Among them were his stirring speech that included "my enemy is the financial sector" and his stated determination to stand firm against Merkel on the abusive austerity policies that were (and still are) in place in all of Europe. Hollande told us only lies...
Greece was the first of the dominos to go down, but "we are all Greeks" is not only a rallying cry on placards as we demonstrate in Paris streets to stand beside them on this issue. We are staring into our dismal future if we allow the current austerity policies to continue to strangle Europe. Bravo Syriza!
The current French president, Hollande, made similar promises to the French electorate a few years ago (before his election). Among them were his stirring speech that included "my enemy is the financial sector" and his stated determination to stand firm against Merkel on the abusive austerity policies that were (and still are) in place in all of Europe. Hollande told us only lies...
Greece was the first of the dominos to go down, but "we are all Greeks" is not only a rallying cry on placards as we demonstrate in Paris streets to stand beside them on this issue. We are staring into our dismal future if we allow the current austerity policies to continue to strangle Europe. Bravo Syriza!
2
Irresponsible lending is the buzzword of the day, but whatever happened to irresponsible borrowing? At the end of the day, it's the borrower who signs on the proverbial dotted line and accepts the offered terms of the loan. With loans between countries and especially in situations of power imbalances, such as here, the details are much more complicated, but at the end of the day, the onus is on the borrower to figure out how to pay back a loan.
Greek proposals and potential terms to allow the economy to return to strength should certainly be heard, but demanding that loans be dropped and invoking the Marshall Plan is simply not reasonable. Having been given a handout 60 years ago and asking for another one now is akin to begging and is not a legitimate negotiation strategy.
Greek proposals and potential terms to allow the economy to return to strength should certainly be heard, but demanding that loans be dropped and invoking the Marshall Plan is simply not reasonable. Having been given a handout 60 years ago and asking for another one now is akin to begging and is not a legitimate negotiation strategy.
12
Well.
Why was OK for Germany to NOT pay its debt in 1953 and in 1990 ? - according to the treaties it should have paid back for all the international assistance it received in any form.
Greece's corruption and inability and whatever you want to blame the Greeks for are more serious crimes than Germany's crimes- therefore they should not be forgiven?
What was the right thing to do for Germany ( writing of the loans) in 1953 and 1990 is akin to begging now......when it comes to Greece or any other country which cannot pay its debt and faces an humanitarian crisis?
Why was OK for Germany to NOT pay its debt in 1953 and in 1990 ? - according to the treaties it should have paid back for all the international assistance it received in any form.
Greece's corruption and inability and whatever you want to blame the Greeks for are more serious crimes than Germany's crimes- therefore they should not be forgiven?
What was the right thing to do for Germany ( writing of the loans) in 1953 and 1990 is akin to begging now......when it comes to Greece or any other country which cannot pay its debt and faces an humanitarian crisis?
17
What a baffling idea that somehow "at the end of the day" only the borrower signs the contract and accepts the terms of the loan. And the poor lender is forced into the deal, never signs anything, and isn't responsible for the terms as well?
2
True, the Greeks were irresponsible and should be ashamed of themselves. Now that we've gotten that out of the way, perhaps we should look at what will produce the best outcome for Greece, Germany, and Europe in general? It's in nobody's best interest to allow the Greek economy to shrink more than it already has. Defaults happen, and they always will. As other commenters have noted, the Germans have received debt relief in the past. The Greek people have suffered horribly over the past six years. Perhaps they have suffered enough to expiate their sinful borrowing? Perhaps this government, which wasn't remotely in power when the borrowing took place, should be given a chance to reform the economy and bureaucracy that plagues their country?
2
The problem is that the Germans and others have convinced themselves and their electorate that they occupy the moral high ground. They also view their lines as red, and not to be crossed.
It so happens that the German position is mathematically ridiculous, and their grasp of recent history is skewed and flawed at best. They have benefitted enormously from the dilution of their national currency (the Mark) into the Euro. Their export economy depends on it. Now it is time to shoulder their burden and help their neighbor, however undeserving. It's what you do in a currency and economic union.
The situation needs to be looked at more pragmatically than either side, but especially the Germans, seem willing to do. The Troika needs to realize that you cannot ask an already depressed economy to run a 4.5% primary surplus with no end in sight. It simply cannot be done, and all the moralizing and finger wagging in the world wont change that.
The Greeks need to realize that when they talk of a Pan-European rethinking of austerity and debt, they scare the pants off of the creditor countries. It's hard not to visualize the Portugese, the Spanish, the Irish and others following suit and demanding their own debt reductions. It's in the Greeks interest to frame this as an isolated incident, never to be repeated. (Until the next time it is necessary.)
It so happens that the German position is mathematically ridiculous, and their grasp of recent history is skewed and flawed at best. They have benefitted enormously from the dilution of their national currency (the Mark) into the Euro. Their export economy depends on it. Now it is time to shoulder their burden and help their neighbor, however undeserving. It's what you do in a currency and economic union.
The situation needs to be looked at more pragmatically than either side, but especially the Germans, seem willing to do. The Troika needs to realize that you cannot ask an already depressed economy to run a 4.5% primary surplus with no end in sight. It simply cannot be done, and all the moralizing and finger wagging in the world wont change that.
The Greeks need to realize that when they talk of a Pan-European rethinking of austerity and debt, they scare the pants off of the creditor countries. It's hard not to visualize the Portugese, the Spanish, the Irish and others following suit and demanding their own debt reductions. It's in the Greeks interest to frame this as an isolated incident, never to be repeated. (Until the next time it is necessary.)
26
Who won the European portion of World War I and II is still very uncertain.
With 52 sovereign ethnic sectarian nations we have been confused and baffled by the relative "order" and "peace" of the EU, EZ, NATO, IMF and WB. Germany as always sits at the center of things with Spain, France, the United Kingdom and Italy warily circling around. The British can still rely and lean on their special American cultural and language relationship. The tribes of Europe are no better than the tribes of Africa or Pre-Columbian America or the Middle East and Asia.
And thanks to Vladimir Putin they all can still raise the looming specter of the Russian bear. But China, India, Brazil, Indonesia, South Africa and Nigeria are going their own way in accord with their own interests and values.
"What rough beast, it's time drawn near, slouches towards Bethlehem?" See "Flashpoints: The Emerging Crisis in Europe" George Friedman
With 52 sovereign ethnic sectarian nations we have been confused and baffled by the relative "order" and "peace" of the EU, EZ, NATO, IMF and WB. Germany as always sits at the center of things with Spain, France, the United Kingdom and Italy warily circling around. The British can still rely and lean on their special American cultural and language relationship. The tribes of Europe are no better than the tribes of Africa or Pre-Columbian America or the Middle East and Asia.
And thanks to Vladimir Putin they all can still raise the looming specter of the Russian bear. But China, India, Brazil, Indonesia, South Africa and Nigeria are going their own way in accord with their own interests and values.
"What rough beast, it's time drawn near, slouches towards Bethlehem?" See "Flashpoints: The Emerging Crisis in Europe" George Friedman
1
Some people still consider Greece situation is purely economical, but in my mind Greece issue already become WWI level political backstabbing.
We have in one hand a newly established EU, in another hand A failing state Greece.
The problem of Greece, can not be placed only on Greek people shoulders.
EU is an organization and failed to check and control its own fiscal balances. If any economist come up a reasonable explanation ( fraud, Book cooking, cheating included etc) for giving 11 million population average level economy almost half trillion credit. I am happy to listen.
Greece may be the black sheep, in EU we have lots of dark shepherds too.
That is why The issue already spilled over political arena. Merkel and Schauble have not yet realized , If Greece thrown out from Eurozone even EU, streets of Europe will fill and create immense dissent towards Germany.
We will see.
We have in one hand a newly established EU, in another hand A failing state Greece.
The problem of Greece, can not be placed only on Greek people shoulders.
EU is an organization and failed to check and control its own fiscal balances. If any economist come up a reasonable explanation ( fraud, Book cooking, cheating included etc) for giving 11 million population average level economy almost half trillion credit. I am happy to listen.
Greece may be the black sheep, in EU we have lots of dark shepherds too.
That is why The issue already spilled over political arena. Merkel and Schauble have not yet realized , If Greece thrown out from Eurozone even EU, streets of Europe will fill and create immense dissent towards Germany.
We will see.
6
A brilliant piece- logically sound, socially responsible and elegantly stated. All good wishes to the new generation of Greek leaders as they grapple with the sclerotic EU hierarchy - an old guard of northern European elites continuing to treat southern Europe as colonies rather than partners. Now, wouldn't it be encouraging if a similar group of pragmatic and visionary leaders had emerged in the US? One can only continue to hope.
11
There is no escaping economic reality, wether it be in Greece or America... you cannot long continue to live beyond your means with overly generous social benefits without consequences. "Visionary" leadership cannot long ignore basic economics.
2
The "selfish player" in this so-called game is Greece. They lied and cheated, and they lived off the backs of their fellow Europeans, with their amazing retirement and social benefits, and now they whine because they finally got caught. Suffering is relative. Life was so good 20 years ago that Greek life, today, is regarded as undue suffering. Tough toenails. Pay the bill.
11
So the new government should be captive to the past? See my earlier comment in this stream [http://www.nytimes.com/2015/02/17/opinion/yanis-varoufakis-no-time-for-g...].
Those who govern by the past simply want to turn back the clock.
Those who govern by the past simply want to turn back the clock.
4
Yes, they should be captive to THEIR past, until they can work to create a future, by their own efforts, which will include getting a handle on corruption and making the wealthy pay their taxes.
2
Of course the new government is captive to the past. You do not start over with a fresh set of circumstances just because a new administration comes to power. Just like here. Obama constantly blames his predecessor for his problems. Clearly he feels captive to past governance.
This is real life and not a board game. Greece has to pay for past sins and sin no more. Those loaning them money have a right to set conditions. Just like your car or house loan requiring you to carry insurance. They don't care if you can afford the insurance or not. You want the loan you carry the insurance.
This is real life and not a board game. Greece has to pay for past sins and sin no more. Those loaning them money have a right to set conditions. Just like your car or house loan requiring you to carry insurance. They don't care if you can afford the insurance or not. You want the loan you carry the insurance.
1
I think Yanis Varoufakis will ultimately get a deal to end the Euro Crisis.
He's proposing a deal he thinks the Germans WANT.
To clarify my thinking o this here are previous submissions to the NYT Krugman Blog that were NOT posted:
*"I think after all the Kabuki is over your going to have a deal that resolves the Euro debt crisis.
Yanis Varoufakis has been publicly developing a plan for 5+ years that he thinks the Germans will take.
I have been taking advantage of this RARE opportunity to learn more about the EU Monetary System and Political System from Varoufakis.
Varoufakis is giving them a template to apply to all troubled countries.
Here's a front row seat to Varoufakis' thinking and then let's see how he negotiates and what the final deal is.
Make your predictions now!
P.S. I nominate Yanis Varoufakis for the 2015 Nobel Prize in Economics.
1st link is 5 combined interviews with Varoufakis.
http://shout.lbo-talk.org/lbo/RadioArchive/2015/15_01_29.mp3
* Submitted to the NYT for posting on 2/5/15
2nd link 30 minute interview with Varoufakis just before Greek election.
http://thisishell.net/shows/833/#Varoufakis"
He's proposing a deal he thinks the Germans WANT.
To clarify my thinking o this here are previous submissions to the NYT Krugman Blog that were NOT posted:
*"I think after all the Kabuki is over your going to have a deal that resolves the Euro debt crisis.
Yanis Varoufakis has been publicly developing a plan for 5+ years that he thinks the Germans will take.
I have been taking advantage of this RARE opportunity to learn more about the EU Monetary System and Political System from Varoufakis.
Varoufakis is giving them a template to apply to all troubled countries.
Here's a front row seat to Varoufakis' thinking and then let's see how he negotiates and what the final deal is.
Make your predictions now!
P.S. I nominate Yanis Varoufakis for the 2015 Nobel Prize in Economics.
1st link is 5 combined interviews with Varoufakis.
http://shout.lbo-talk.org/lbo/RadioArchive/2015/15_01_29.mp3
* Submitted to the NYT for posting on 2/5/15
2nd link 30 minute interview with Varoufakis just before Greek election.
http://thisishell.net/shows/833/#Varoufakis"
4
Thanks for the links.
Thanks for the post!I wasn't aware of these plans and proposals of Varoufakis. It seems that most European media consciously hide or at least suppress these facts. At first I had the impression that Greece was the bluffer, but now I tend to believe they just call EU's (or better say Germany's?) bluff. European politicians call Greeks bluffers or freeloaders, which is insufficiently supported by economic realism though. Moreover, the previous Greek governments have been in some pretty huge economic scandals involving their German partners-in-crime (just research the Siemens scandal). Consequently, it's quite suspicious of Germany to blame Greece's debt on corruption while respectable portions of the German capital have been involved in some outrageous scandals ( sounds like someone bluffin' in order to camouflage his bluff or real intents). On the other hand, noone can neglect that Greeks are hugely responsible for supporting a corrupt,malfunctional state and electing the same two political parties for around 30-40 years! It's the first time the Greek people seem to make a conscious choice and effort to cleanse their corrupt-to-the-teeth state and recover from their crisis and the stance of the powerful members of the EU seems to be rather incoherent. If Greece is finally slapped again,its more likely alternatives would be nazism, emerging from social chaos and feeling of injustice and frustration, or a nationalistic full turn to Russia in search of a new ally.
"He's proposing a deal he thinks the Germans WANT."
There is not much of a deal:
- cut all claims
- enforce all other countries to cut their claims too
- enforce the IMF to cut their claims also
- don't rush for reforms
- don't ask for any substancial, like a plan
- keep on funding
- maybe there might be growth
- and we will forward all others to copy us and call this the solution to all our problems.
By the way, no-one took the bait, some ministers of finance got so angry last monday, that they even refused to talk to Varoufakis any more.
And the approval for additional help must pass all national parlaments until feb28, in return for a substancial proposal from Varoufakis.
I wouldn't bet on it, but up to know he can be lucky if the approval for the next bailout will pass even one of the eighteen parliaments.
Greece now really need some magic.
There is not much of a deal:
- cut all claims
- enforce all other countries to cut their claims too
- enforce the IMF to cut their claims also
- don't rush for reforms
- don't ask for any substancial, like a plan
- keep on funding
- maybe there might be growth
- and we will forward all others to copy us and call this the solution to all our problems.
By the way, no-one took the bait, some ministers of finance got so angry last monday, that they even refused to talk to Varoufakis any more.
And the approval for additional help must pass all national parlaments until feb28, in return for a substancial proposal from Varoufakis.
I wouldn't bet on it, but up to know he can be lucky if the approval for the next bailout will pass even one of the eighteen parliaments.
Greece now really need some magic.
Wow. A wind blowing uncontaminated air is refreshing. With the USA sinking further into the opaque plutocratic mire daily, deliver us a non-game playing Varoufakis to replace the muddled flaks and bloviated communications system not blowing psychedelic visions up our lower digestive tracts.
9
Germany is not paying and is not innocent.
Der Spiegel - "Crisis Has Saved Germany 40 Billion Euros"
http://m.spiegel.de/international/europe/a-917296.html
Der Spiegel - "Crisis Has Saved Germany 40 Billion Euros"
http://m.spiegel.de/international/europe/a-917296.html
8
Perhaps new thinking by EU leaders about Greece’s future could also lead them to the insight that in this globalized world a regional monetary union cannot be expected to do well without considering the larger global context. Rather than letting the EMU expire or have it weakened, EU leaders should start thinking of pushing for an international monetary union.
One way of doing this is taking two major existential challenges of the 21st century as a cornerstone for a transformed international monetary system.
Such system can be developed by basing the international monetary system on the carbon standard of a specific tonnage of CO2e per person which would combat the looming climate catastrophe and advance low-carbon, climate resilient development, the two main challenges of this century. The conceptual, institutional, ethical and strategic dimensions for such carbon-based international monetary system are presented in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” and updated at www.timun.net.
One way of doing this is taking two major existential challenges of the 21st century as a cornerstone for a transformed international monetary system.
Such system can be developed by basing the international monetary system on the carbon standard of a specific tonnage of CO2e per person which would combat the looming climate catastrophe and advance low-carbon, climate resilient development, the two main challenges of this century. The conceptual, institutional, ethical and strategic dimensions for such carbon-based international monetary system are presented in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” and updated at www.timun.net.
3
"They get to repudiate enormous debts. That actually leaves them free to start borrowing again. "
With sovereign debt you can only default (i.e. miss payments) the debt cannot go away (i.e. no such thing as bankruptcy for sovereign debt). They would need to negotiate with the bondholders and until all are in agreement they would be locked out of the international markets (i.e. no new borrowing).
That is why Argentina for example still does not have access to the markets (the holdouts who will not accept cuts in the face value of the debt)
With sovereign debt you can only default (i.e. miss payments) the debt cannot go away (i.e. no such thing as bankruptcy for sovereign debt). They would need to negotiate with the bondholders and until all are in agreement they would be locked out of the international markets (i.e. no new borrowing).
That is why Argentina for example still does not have access to the markets (the holdouts who will not accept cuts in the face value of the debt)
2
But, who would lend to them? Lenders would have to be stark, staring mad.
3
There are enough "stark, staring mad" lenders (see for example Germany leading up to this) who might be willing.
2
Until a re-working of the agreement can be discussed, perhaps a realistic three month moratorium on the payments, can be effected. The three month's delay, due to discussions, can be tacked on to the end, of the of the payment schedule; thereby allowing for the necessary time to discuss a viable solution. Thank You.
3
In our weekly call, my daughter and I discussed the Greek dilemma for 30 minutes; it's resolution is not a decision about debt and austerity but about European values, its vision, and traditions--will they be embraced or abandoned? Beyond the balance sheet, its absorbing drama will shape the way forward; its hidden costs may exceed the numbers being bandied.
The EC's stern ultimatum conceal these real costs; the unaccountable damage to elective government, to support for sovereignty and self determination, to reason itself--to patience, trust, and time. Greece's new government acknowledges past mistakes but refuses to submit to becoming a vassal of self-inflicted blame. Right now, the EC seeks to add more pain; justified by the past. For Greece, the Minister argues, the solution is to look forward: restructure internally, create new transparency, break with the past, lead itself out of the crisis. The cost to Europe would be time; 4 to 6 months.
Why not give Greece time, in order to preserve the cherished, historic European value of supporting the democracy of popular will? Why is the EC willing to bludgeon a Greece that seeks cooperation and makes a clear case for its stakes? Right now, the EC is carrying out a tyranny of the few. It abandons its role in the vanguard of new relations between nations to aid and assist each other to impose a unilateral will.
This is wrong. For Greece and the EC. Those who govern by the past simply want to turn back the clock.
The EC's stern ultimatum conceal these real costs; the unaccountable damage to elective government, to support for sovereignty and self determination, to reason itself--to patience, trust, and time. Greece's new government acknowledges past mistakes but refuses to submit to becoming a vassal of self-inflicted blame. Right now, the EC seeks to add more pain; justified by the past. For Greece, the Minister argues, the solution is to look forward: restructure internally, create new transparency, break with the past, lead itself out of the crisis. The cost to Europe would be time; 4 to 6 months.
Why not give Greece time, in order to preserve the cherished, historic European value of supporting the democracy of popular will? Why is the EC willing to bludgeon a Greece that seeks cooperation and makes a clear case for its stakes? Right now, the EC is carrying out a tyranny of the few. It abandons its role in the vanguard of new relations between nations to aid and assist each other to impose a unilateral will.
This is wrong. For Greece and the EC. Those who govern by the past simply want to turn back the clock.
22
It's too bad that there are no serious plans to address Greek overspending. Yes, the austerity measures are debilitating. There are, however, no serious proposals to change the structural deficits that plague the Greek economy. Given the four to six months, another extension will be sought. with little meaningful changes accomplished that could propel the Greeks toward prosperity (even on a very slow pace).
8
The overspending has already been addressed! Greece's current budget shows a 1.5 billion euro surplus! [http://reut.rs/1lSOKj0]. This is 1.5% of its budget. The issue is over the EU demand that the surplus be increased to 4.5%, which the new government sees as self-defeating cycle of void, given the social crisis among the aged and unemployed. Such a demand (4.5%) is setting Greece up to fail!
Hence the Minister's two-pronged view: "no loans, no reforms;" six months of time.
Hence the Minister's two-pronged view: "no loans, no reforms;" six months of time.
10
It's funny how "statistics" can be manipulated to reflect whatever you want the audience to believe. In this case, read this: [http://blogs.wsj.com/brussels/2014/04/23/greek-primary-surplus-statistic...]. I especially enjoyed reading the final sentence in the blog post, with regards to the deficit accounting that you noted earlier - "Asked whether this methodology has been applied in any other EU member, the commission replied in an email: “No, the definition is country-specific.” In other words, you can fabricate anything that you want to support your motivations.
Greeks for 5 years have done huge sacrificies as a result to inresponsible politics for many many years..
We accept our mistakes thats why silently carried our cross.. cause we were hoping that all these cuts in salaries and pensions would brought a small result...
The only benefits was a few logistic numbers..and a thousand Suicides...
The so called surplus..
destructions...of the social tissue...
And depression.
I dont want to sound as a dreamer greece needs many stuctural reforms in many areas..
..we live in a blessed land.. .If the gods lived here we definatly we can think work and prosper..
I am waiting for the time a leader will put things in order..
I know that i will be stardust..and will return to my home star as Plato was saying..
One last thing....
Greece always but always for thousands and thousands years ..Never had harmed humanity..
Never but never had killed the free thinking and the solidarity...between nations but
As a person and a real european cant tolerate blackmails..and ultimatum..from a prorestand way of thinking
Which we all know .....what have done to the world TWICE!
You want to let and support a division in Europe??
' Κακον κακου ου απτεται'
We accept our mistakes thats why silently carried our cross.. cause we were hoping that all these cuts in salaries and pensions would brought a small result...
The only benefits was a few logistic numbers..and a thousand Suicides...
The so called surplus..
destructions...of the social tissue...
And depression.
I dont want to sound as a dreamer greece needs many stuctural reforms in many areas..
..we live in a blessed land.. .If the gods lived here we definatly we can think work and prosper..
I am waiting for the time a leader will put things in order..
I know that i will be stardust..and will return to my home star as Plato was saying..
One last thing....
Greece always but always for thousands and thousands years ..Never had harmed humanity..
Never but never had killed the free thinking and the solidarity...between nations but
As a person and a real european cant tolerate blackmails..and ultimatum..from a prorestand way of thinking
Which we all know .....what have done to the world TWICE!
You want to let and support a division in Europe??
' Κακον κακου ου απτεται'
6
My sympathy is with the Greek population, but sympathy is worth nothing.
I believe that the new government is willing to reform economy, tax systems and eliminate corrupt behaviour. Believe is worth nothing as well.
Greece had decades and elected many governments doing nothing than continuing business as usual; the highway to further deterioration.
Put your money where your mouth is sounds sarcastic. I mean the words and promises of the Greek government did not match their handling. Also the new elected government started wrongly by hiring 10,000 civil servants and stopping privatization.
European member states aren't keen of loosing Greece where democracy was born. But solidarity has it limits.
Many Europeans do like Varoufakis words and all European member states would like to give full support. However like sympathy and believe also words are worth nothing.
Therefore Varoufakis where is your detailed action plan to deliver the promises. Convince Europe that this time Greece will stick to its words. Than Europe will show what solidarity means.
I believe that the new government is willing to reform economy, tax systems and eliminate corrupt behaviour. Believe is worth nothing as well.
Greece had decades and elected many governments doing nothing than continuing business as usual; the highway to further deterioration.
Put your money where your mouth is sounds sarcastic. I mean the words and promises of the Greek government did not match their handling. Also the new elected government started wrongly by hiring 10,000 civil servants and stopping privatization.
European member states aren't keen of loosing Greece where democracy was born. But solidarity has it limits.
Many Europeans do like Varoufakis words and all European member states would like to give full support. However like sympathy and believe also words are worth nothing.
Therefore Varoufakis where is your detailed action plan to deliver the promises. Convince Europe that this time Greece will stick to its words. Than Europe will show what solidarity means.
1
Dear Froehlich (sorry, no umlauts on my keyboard) - I'm afraid you have been misinformed. They are not rehiring 10,000 civil servants. They are reviewing 10,000 dismissals to see who was fired legally and who not. And, besides, they have already committed to finding the money for the re-hirings from elsewhere in the budget. They are firing grossly-overpaid "advisors"; they are selling off 100's of cars from the government fleet and the prime-ministerial jet. PM's are going to work by us, just like ordinary Greek people. Please don't take whatever is written in Bild or Der Spiegel for granted.
3
Europe will show what solidarity means? Utterly laughable! Europe will show what rule by the financial elite means.
If we take the whole text, and replace Greece with Macedonia, and EU with Greece, we could have a detailed op-ed about the troubles and unfair treatment that Macedonia is getting from Greece for the past 2,5 decades, because of the name dispute. Because they don't want to allow us, to call ourselves Macedonians and Macedonia. This whole op-ed would be meticulously right on target, including poor pensioners, shattered economy, finishing with the "regaining its soul" part, but this time for Greece.
Even after all of this I'm feeling sorry for the troubles of the everyday Greeks, but I cannot forget or ignore the suffrage that your country caused, and is causing with its actions against my country and my people. Its a hypocrisy to present yourself as a victim, while ignoring other people hardships that you are creating.
We too have "red lines beyond which logic and duty prevent us from going," and for 25 years we are suffering for it.
Even after all of this I'm feeling sorry for the troubles of the everyday Greeks, but I cannot forget or ignore the suffrage that your country caused, and is causing with its actions against my country and my people. Its a hypocrisy to present yourself as a victim, while ignoring other people hardships that you are creating.
We too have "red lines beyond which logic and duty prevent us from going," and for 25 years we are suffering for it.
8
How refreshing to read a political view from a person in power that puts primary concern on people rather than capital.
I suppose that's leftist "radicalism" in today's corporatized universe. How sad.
I suppose that's leftist "radicalism" in today's corporatized universe. How sad.
16
Long on noble thoughts and short on specifics. Greece will never prosper until it reforms its labor laws and gets rid of its overweening, corrupt bureaucracy.
7
In other words, until everyone in the world has to suffer like the American working class suffers, spiteful adherents to the Just World Fallacy such as yourself will never be truly happy.
7
Oh sure, you would rather read a 200 page wonkish white paper of charts, details, proposed legislative changes, and new penalties and programs with budget templates? This is the op-ed section! If you look for the details (as I did yesterday!), you will find the specifics are written and published in Greek, often without translation, since these are internal documents. In the English newspapers, you will find great support for the "noble ideas" within the country's populace.
By the time one learns to read the language, the results, one way or the other, will speak for themselves.
By the time one learns to read the language, the results, one way or the other, will speak for themselves.
9
Greeks already doing another vote by withdrawing their deposits from their banks.
10
Enough with the financial double-talk. Pay your debts, the free lunch is over. You believe, like other welfare recipients that it is one else's problem to give you a hand-out. I'll let you in on a little in about game-theory: unless you are a bunch of geniuses from MIT, the house always wins.
16
Does it make you feel good to verbally flatulate about something it is obvious you clearly know nothing about?
6
Straight talk is what you want? Here it is then: insisting that Greece reach a 4.5% primary budget surplus in a severely depressed economy is preposterous, requiring budget cuts so draconian that the Greeks would have to forgoe any lunch at all, and probably dinner and breakfast as well. As either advice or admonishment, pay your debts and starve is prescriptively inane. I'll let you in on a little game-theory, when the game is rigged so you can only lose, better to quit and wreck the game.
11
Capitalism, globalism and 'financial innovation' have many victims. The EU now seems bent on making Greece and its citizens many many more of the victims.
Stop ! Enough! Let it go and let those people go.
Stop ! Enough! Let it go and let those people go.
4
Thank you Mr. Varoufakis for so clear an explanation of your actions and motives. Perhaps it will lift the fog of obfuscations on this matter that we read elsewhere,
8
Whether Greece's new government can bring Brussels and Berlin to reason or not remains to be seen and time is short. The view from Greece of these unfolding negotiations is on one hand like a thriller film playing out in slow motion; and on the other, a feeling of great relief and hope that finally a government is representing its people and not its oligarchs, both at home and abroad.
The electoral demise of the two major parties is hugely significant for us and signifies an unprecedented new era in Greece. The old dynasties have fallen. New Democracy and Pasok, who ruled Greece since the fall of the junta, racked up enormous national debt through entrenched political corruption and economic mismanagement on a grand scale. These same people were then charged with imposing troika-dictated austerity, via bills their MPs voted for, but did not even read before they passed through the parliament into law!
Greeks are sure that had these parties remained in power, they would have had no qualms in taxing the last euro from the pension of the last grandma in the last village in Greece, leaving her without the means to survive, while Greece's multi millionaire and billionaire oligarchs continued to enjoy up to 100% tax immunity. New Democracy and Pasok were never going to cut the oligarchic branch they were sitting on, so that game is over now and genuine reform - including a fair and effective tax system - can finally begin, simply because there the political exists to do it.
The electoral demise of the two major parties is hugely significant for us and signifies an unprecedented new era in Greece. The old dynasties have fallen. New Democracy and Pasok, who ruled Greece since the fall of the junta, racked up enormous national debt through entrenched political corruption and economic mismanagement on a grand scale. These same people were then charged with imposing troika-dictated austerity, via bills their MPs voted for, but did not even read before they passed through the parliament into law!
Greeks are sure that had these parties remained in power, they would have had no qualms in taxing the last euro from the pension of the last grandma in the last village in Greece, leaving her without the means to survive, while Greece's multi millionaire and billionaire oligarchs continued to enjoy up to 100% tax immunity. New Democracy and Pasok were never going to cut the oligarchic branch they were sitting on, so that game is over now and genuine reform - including a fair and effective tax system - can finally begin, simply because there the political exists to do it.
50
I was going to write a comment, but then I saw this one.
'Nuff said.
And so elegantly.
'Nuff said.
And so elegantly.
5
And you really believe a communist party will spur growth in the economy and help the individual gain his own freedom and independence? Hahaha... these are contrary to the communist mantra of central planning, nationalized business, and fewer individual freedoms. Did we need change in Greece? Absolutely!! But not the charismatic change we got! Another bad choice by Greek voters, this time with every more dire consequences.
The current programme issue is but a symptom of the larger issue that is now becoming appearant in the EU. On one hand there is the democratic government of Greece, elected on an agenda by the Greek people. While in the remaining EU, there are also governments elected, however in contrary promisses. Which democratic mandate outranks the other?
While I do not necesarily wish to use this comment to promote, or oppose a political union, the factual situation we face now is new. What if governments, the agents of the people, have mandates that do not match or can't be alligned?
Now when it regards the US - China relationship, this is a matter which can easily be bypassed, afterall there is no common policy area. However within the EU, there is no such option of bypass.
But at the same time, the previous government, with a mandate entered into agreements with the European Union. Is a new government not bound to it? As is with all the international treaties, after all, what is the use of a treaty if it cannot outlast a single government term?
I remain with the concern that there is a larger problem, which correlates to a conflict of government mandate. Because what can the Greek government actually do? Especially when you are caught between the devil and the deep blue sea, either you bend to the people, and wreck your country. Or you bend to Europe, and end your government.
But I remain with the question, what is the people's mandate worth when negotiating within the Eurogroup?
While I do not necesarily wish to use this comment to promote, or oppose a political union, the factual situation we face now is new. What if governments, the agents of the people, have mandates that do not match or can't be alligned?
Now when it regards the US - China relationship, this is a matter which can easily be bypassed, afterall there is no common policy area. However within the EU, there is no such option of bypass.
But at the same time, the previous government, with a mandate entered into agreements with the European Union. Is a new government not bound to it? As is with all the international treaties, after all, what is the use of a treaty if it cannot outlast a single government term?
I remain with the concern that there is a larger problem, which correlates to a conflict of government mandate. Because what can the Greek government actually do? Especially when you are caught between the devil and the deep blue sea, either you bend to the people, and wreck your country. Or you bend to Europe, and end your government.
But I remain with the question, what is the people's mandate worth when negotiating within the Eurogroup?
4
Dear D., first of all, I'm sure you would agree that this would not be the first time an international has been broken, bent, updated, reformed - choose the word you want. 2nd: If memory serves, the first two countries that violated the Stability Pact were, in fact, Germany and France (not sure about the order). 3rd: if an agreement is entered into under duress, its legality is questionable. 4th: the MoU was being constantly changed at the unelected officials of the Troika saw fit. 5th: the Greek government did not say it wants to violate an agreement. The agreement runs out in 2 weeks and tranche of money related to the last range of 'reforms' has not been paid out. 6th: The greek government is saying that under the current conditions it will not be able to honour its debts and it's asking its 'partners' for some leeway. For example, what is the point of demanding a 4.5% primary surplus when that money could be put back into the economy, fuel growth and actually increase the possibility that Dutch tax-payers will actually get their money back, with interest, albeit later than expected?
1
Rewarding coruption and incompetence is not in the interest of Europe. Greece has happily sqaundered the European loans for development. The Greek people had decades to get its house in order. A few extra months will not make any difference. It will only send the message to other countries with potential problems that its business as usual and the Germans will just pay and shut up.
13
So, no bluffing, no game theory strategies! Maybe , this is also a bluff! Greece has cheated its way into this mess, albeit with the veiled knowledge of its partners; But, if you believe that a rigid negotiating position ("my way or the highway") will get you where you want to be, then you are delusional. Stick to rigidity and you are going to find youself and your country outside of the Euro zone, experiencing the hurricanes of global finance ALONE. And the Euro will survive.
8
No country seems to have an answer to income equality for the poor. The power rich always come off as hedious, corrupt people. When the poor become, comfortable they seem to turn against the "poor" and the cycle starts again. It is a never ending problem, no answers seem to be available. The Germans ruined the Greek economy during world war 2. So the Greeks feel that they are owed a pass on the debt. Greece is a beautiful country with brilliant mins but is still stuck in it's own past.
2
Why do so many here assume Greeks debt problem is due to an unserviceable debt due to prolific spending, and not due to an economic downturn that was, as for Iceland, due to a depressed economy, and unlike iceland, was tied to a common currency, that kept it from renegotiatng the loan or default on banks that lent irresponsibly? Agreed the rich need to pay their fair share, and retirement should start at 60, other than that, let's get on with it!
4
Politicians selfish players? Of course, they know voters are just plain stupid.
Mr Varoufakis is still in pre-electoral campaign doing what he excels at: using the Internet to pander to a friendly base.
In the real world his 18 fellow Eurozone finance ministers are desperately waiting for any specifics that will actually move the discussion forward.
None so far.
Syriza and Mr Varoufakis have succeeded in bloating the debt issue to obscure the fact that due to generous previous plans, Greece pays less than Italy or Portugal in interest payments vs GDP.
In reality Greece's priority should be the obvious one: bring stability and incentives for investment while negotiating a targeted relief for the weakest. So far, the Greek government has announced a list of measures (stop privatizations, hire more public servants, raise minimum wages and retirement payments) that have spooked both fellow EE ministers and investors.
On top of that, they only understand the meaning of negotiation as a situation where the winner is the one able to twist the other party's arm.
Hence their ill-fated efforts to use their stance on Russia or Mr Varoufakis' hints about Armageddon as bargaining chips. They have only succeeded in alienating everybody against them.
In the real world his 18 fellow Eurozone finance ministers are desperately waiting for any specifics that will actually move the discussion forward.
None so far.
Syriza and Mr Varoufakis have succeeded in bloating the debt issue to obscure the fact that due to generous previous plans, Greece pays less than Italy or Portugal in interest payments vs GDP.
In reality Greece's priority should be the obvious one: bring stability and incentives for investment while negotiating a targeted relief for the weakest. So far, the Greek government has announced a list of measures (stop privatizations, hire more public servants, raise minimum wages and retirement payments) that have spooked both fellow EE ministers and investors.
On top of that, they only understand the meaning of negotiation as a situation where the winner is the one able to twist the other party's arm.
Hence their ill-fated efforts to use their stance on Russia or Mr Varoufakis' hints about Armageddon as bargaining chips. They have only succeeded in alienating everybody against them.
10
Enough prattle about morality, responsibility, reforms and principle. The Greek government is not going to allow it's citizens to starve and that is the proximate outcome of the present demands of the EU. If the union wants to inculcate lessons in virtue and culpability, this is the way to do it. If they want to have a prayer of ever getting their money back, good luck with that. We live in a return to an ancient civilization in which the Greeks are the realists and rationalists and the Germans are a bunch of barbaric tribes dancing around a bonfire, painted blue.
6
the blue guys were the Scots.
2
There were lots of different blue guys.
2
At first the Germans accepted the Euro to facilitate their unification, than floaded the PIGS countries with easy money, to let them to buy their goods and now, when the PIGS are not able anymore to spend, they put a stick in the sand with the poor Greecks, in order to return to the Deutsche Mark.
2
"The great difference between this government and previous Greek governments is twofold: We are determined to clash with mighty vested interests in order to reboot Greece and gain our partners’ trust."
This may be THE problem! The "mighty vested interests" are of course cronies of German capital. It is perhaps not an accident that V's primary negotiating partner Schäuble once accepted at least one envelope containing DM 100,000 in cash from a weapons lobbyist.
This may be THE problem! The "mighty vested interests" are of course cronies of German capital. It is perhaps not an accident that V's primary negotiating partner Schäuble once accepted at least one envelope containing DM 100,000 in cash from a weapons lobbyist.
6
Dear Mr. Varoufakis, you claim that "We are asking for a few months of financial stability that will allow us to embark upon the task of reforms that the broad Greek population can own and support, so we can bring back growth and end our inability to pay our dues." However, you should consider that this might sound like an empty statement; maybe your message was not clear enough;"communication is the response you get". It would be more convincing *and fair* to present a full detailed plan that would actually support this statement. What have you done to this direction? Why should they give more time, since they believe that the current program works?
3
"We are asking for a few months of financial stability"
Sounds reasonable, except this "stability" will require European taxpayers to funnel an extra €60 billion to Greece over the next 6 months, and for what? What happens after that? Then you default and the rest of Europe loses even more.
Your smoke and mirrors will not save you or the Greek people Mr Varoufakis. You wriggle and squirm but the eagle has you firmly in its claws. We have a firewall around Greece now, the risk of contagion is minimal. If you think we are going to let a tiny nation get in the way of progress, stability and the capitalist system, then you obviously don't know much about European history.
Sounds reasonable, except this "stability" will require European taxpayers to funnel an extra €60 billion to Greece over the next 6 months, and for what? What happens after that? Then you default and the rest of Europe loses even more.
Your smoke and mirrors will not save you or the Greek people Mr Varoufakis. You wriggle and squirm but the eagle has you firmly in its claws. We have a firewall around Greece now, the risk of contagion is minimal. If you think we are going to let a tiny nation get in the way of progress, stability and the capitalist system, then you obviously don't know much about European history.
4
This was an interesting, heartfelt manifesto long on emotion and VERY short on anything resembling details. Other than that, I have little to respond because the piece actually said so very little of any real substance.
11
Perhaps it is the simple request to be rational and do what is right. We ALL know that Greece is bankrupt and can not repay the loan sharks. We can renegotiate the loans (fore go, extend, reduce, whatever) or we can break the kneecaps and lose everything.
Losing everything is irrational and breaking kneecaps is wrong.
Losing everything is irrational and breaking kneecaps is wrong.
4
I want everyone to be rich, have a pony, a swimming-pool and a porsche, i have no idea how to achieve this, so just start funding me...
Richard,
Remember your Leonard Cohen.
"Everybody know the dice are loaded,
Everybody knows the good guys lost"...
The poor stay poor, the rich get rich."""
Who are we to try to make the world a better fairer place??
Especially when Everybody Knows.
Remember your Leonard Cohen.
"Everybody know the dice are loaded,
Everybody knows the good guys lost"...
The poor stay poor, the rich get rich."""
Who are we to try to make the world a better fairer place??
Especially when Everybody Knows.
3
Germany should be fighting to keep all economies in the EU. This is not game theory rather empirical evidence shown by the USA. While not perfect, by any means test, it has managed to stay together despite drags from singular states annually. We have states which have never given net capital to the federal coffers. One would find those are the "loudest" of our politicians. But that is another story.
What is missing? Authority. For the EU to assume responsibility of it's member "states" it must have authority.
Is Europe with it's varied cultures, languages, leadership ready for that?
We shall see.
What is missing? Authority. For the EU to assume responsibility of it's member "states" it must have authority.
Is Europe with it's varied cultures, languages, leadership ready for that?
We shall see.
5
If ever a politician was playing bluff poker, it is Yanis Varoufakis. No one has ever seen his "proposals for regrowing Greece" and no one has seen any "red lines." This complete ingenuity and strutting of worn-out feathers may be lost on the Greek people who are now being asked to pay for their own fraud and dishonesty, but it is wholly evident to the rest of Europe. Troike was good enough for Greece as long as it was writing checks to a country with a debt somewhere around 150 times the size of its GNP. Now, according to Tsipras and Varoufakis, "Troike doesn't exist." The Greeks will long rue the election of street hoods who believe debt is a matter of gamesmanship. According to Kant: debts are paid, not forgiven. It is really not so difficult to call the bluff of a naked man on the other side of the table whose empty hand has long been turned right side up.
10
"150 times the GDP"?? Someone that does not know what "per cent" means is not qualified to express opinions on economic matters!
3
150 times? you realise that 150% means 1.5 times and not 150, right?
3
YES, clearly LauraLyn (and so many others that comment on these pages, I suspect) does not understand this difference.
Doing the right thing pre-requires a humble, non provocative approach. Or-else egos prevail and the end-result is bad for all.
May the rational-thinking prevail. The accurate wording of Greece's Finance Minister is decisive in that respect. Being Greek, I am asamed by the irresponsible provocativeness exchibited by a minority of Greek Media that were the rent-receivers/insolvent loan issuers/cancer of Greek economy during the last decade.
May the rational-thinking prevail. The accurate wording of Greece's Finance Minister is decisive in that respect. Being Greek, I am asamed by the irresponsible provocativeness exchibited by a minority of Greek Media that were the rent-receivers/insolvent loan issuers/cancer of Greek economy during the last decade.
4
There is a huge difference between Mr Varoufakis's messages here and the actions he and his government did in the last couple of days. What seems to be right for a new government in Greece doesn't necessarily means it is right for the democracies in Europe, where tax payers have spent a lot of money to help Greece to financially survive in the last couple of years. There is very few understanding in countries like Spain, Portugal, Ireland and the Baltics for the attempted blackmail in the recent days. And his attempt to be the only one knowing what's best for Europe ist just arrogant. What we see here is how ideology meets reality.
2
What is good for Greece is good for Spain, Portugal, Ireland and the Baltics. And the Schwabian hausfrau,too. Dr. Varoufakis doesn't claim to be the only one that knows what is best for Europe - he agrees with Dr. Krugman and most other economists on this: Europe needs to get aggregate demand up across the whole continent. Germans aren't going to pay LESS taxes if Greece defaults, but German banks' balance sheets will turn blood red. The biggest danger, is that the rest of Europe will turn its rage against Germany, and the Euro and the European project will lose.
5
My friend, how come all that money did not make a difference? Sadly the Greek political system is corrupted to the bone. The Greeks are fools for voting the same criminals again and again. Now we opted for something new. We just don't want the EU funds to continue supporting the banks when the Greek people are repaying those loans and being pushed to make reforms that break this country apart while preserving the corrupted system. This country had enough of corruption. We want to rebuild it. If we can't find an agreement, so be it. Let's get out. Will the EU let us go in peace or would a successful Grexit be a dangerous event, and Greece's collapse will have to be ensured to avoid other countries following our example?
Let me remind you there are PEOPLE that suffer and a society that is crumbling. Maybe to a degree we deserve this. Let me rephrase, the previous generation may deserve this. Those who put their trust in nefarious politicians. I do not deserve this. The future generations don't deserve this. And besides, maybe to a lesser degree EU deserves to pay as well for harboring Greek governments' corruption for years and years when it was in their best interest. I will not go further into that, apart from reminding you that Mr. Christoforakos, culprit of one of the worst Greek scandals over the past 20 years, the Siemens scandal, lives and breathes free in Germany when he is wanted in Greece. Why does your country refuse to extradite him?
Let me remind you there are PEOPLE that suffer and a society that is crumbling. Maybe to a degree we deserve this. Let me rephrase, the previous generation may deserve this. Those who put their trust in nefarious politicians. I do not deserve this. The future generations don't deserve this. And besides, maybe to a lesser degree EU deserves to pay as well for harboring Greek governments' corruption for years and years when it was in their best interest. I will not go further into that, apart from reminding you that Mr. Christoforakos, culprit of one of the worst Greek scandals over the past 20 years, the Siemens scandal, lives and breathes free in Germany when he is wanted in Greece. Why does your country refuse to extradite him?
5
Bashing northern Europe for not pouring more money into Greece is too simple. Tell the French, Dutch or German hairdresser who makes 1,000 Euro a month that she should subsidize Greece because the rich greek avoid taxes. Enforcing tax laws in Greece would go a long way to solving the countries' problems. Nobody denies that the average Greek citizen suffers too much. The root cause is that the country could not afford the level of government spending it had and that it should not have been in the euro zone in the first place. The new greek government tells other european governments that the greek population no longer wants austerity. Unfortunately, the populations in the other countries do not want to extend more loans to Greece.
http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?pagewanted...
http://www.nytimes.com/2010/05/02/world/europe/02evasion.html?pagewanted...
6
When was the last time you read an Op-Ed by a finance minister referencing Game Theory and Immanuel Kant?
A new order indeed
A new order indeed
7
Sometimes you see from a distance how a bad leader leads his people into disaster. But the Greek deserve the leaders they have. Human behavior does not change that much over the centuries. It is just foolish for leaders to think they can change the world in their short blink of existence.
2
Angela Merkel is changing the world. She's throwing Europe over a cliff.
2
Time is not on Greece's side.The Hellenic country is at a crossroads. Either embrace (painful) modernization measures to increase competitiveness and tackle a corrupt political system or leave the eurozone.
True, Greek voters elected Mr. Tsipras party to end austerity and return the country to the status quo ante. That is, a rent seeking economy of shopkeepers, lowest level of taxation in Europe, well paid cozy jobs in government and state owned enterprises.
Life in Greece --before government false statistics on debt exploded -- was wonderful. Post debt crisis, however, mission impossible for the tail to wag the dog.
True, Greek voters elected Mr. Tsipras party to end austerity and return the country to the status quo ante. That is, a rent seeking economy of shopkeepers, lowest level of taxation in Europe, well paid cozy jobs in government and state owned enterprises.
Life in Greece --before government false statistics on debt exploded -- was wonderful. Post debt crisis, however, mission impossible for the tail to wag the dog.
3
As a Greek-American that has spent much time in Greece since a child, including summers with pappoús kai i̱ giagiá when growing up, I know the Greeks are so corrupt it beggars the imagination. They wasted massive amounts of money borrowed since becoming part of the Euro Zone; and, their elite moved their money into Swiss bank accounts to avoid taxes; and, they wasted massive amounts of money on the 2004 Olympic Games, where fraud and corruption won the Gold Medal. Why should German taxpayers bailout the corrupt Greeks? They are the most corrupt of all governments and business in the Organisation for Economic Co-operation and Development community, let alone the Euro Zone. They need to be kicked out of the Euro Zone.
8
Leonard Cohen spent a number of his early years in Greece maybe that is why he penned
Everybody Knows.
"Everybody knows that that the dice are loaded
Everybody rolls with their fingers crossed,
Everybody knows that the war is over
Everybody knows that the good guys lost
Everybody knows the fight was fixed'
the poor stay poor, the rich get rich,
That's how it goes
Everybody knows"
Thank you Yanis Varoufakis for trying to change the dice and trying to stop the fight from being fixed. The war will never be over as long as there is at least one one out there that believes in democracy. Thank you Greece.
Everybody Knows.
"Everybody knows that that the dice are loaded
Everybody rolls with their fingers crossed,
Everybody knows that the war is over
Everybody knows that the good guys lost
Everybody knows the fight was fixed'
the poor stay poor, the rich get rich,
That's how it goes
Everybody knows"
Thank you Yanis Varoufakis for trying to change the dice and trying to stop the fight from being fixed. The war will never be over as long as there is at least one one out there that believes in democracy. Thank you Greece.
8
Um... That is great but your country has some serious institutionalized problems that require fixing if Greece is ever going to realize any potential. Specifically, your tax collection 'system' is in dire need of overhaul but nothing meaningful has been done to address these issues. Either fix your problems (possibly impossible given the chronically selfish, unsophisticated Greek mentality) or sell some islands.
7
Outsiders might write-off Greece; no one should expect Greeks themselves to do the same. Here is one honest and knowledgeable person who presents a viable solution to the economic problems of Greece. Why should we assume that the only way to get out of this quagmire is to make the Greeks suffer endlessly.
4
Have I become so cynical that I look at every socialist with jaundiced eyes?
Or do I see the classic socialist tactic of throwing the children in front of the train to stop it - while simultaineously cancelling privatisation and rehiring government employees?
Unfortunately, I hear nothing new - just more of the same failed socialist tactics that i have seen fail over and over, and will lead to failure again.
it is always a pending tragedy when suffering people reach out to socialism.
Or do I see the classic socialist tactic of throwing the children in front of the train to stop it - while simultaineously cancelling privatisation and rehiring government employees?
Unfortunately, I hear nothing new - just more of the same failed socialist tactics that i have seen fail over and over, and will lead to failure again.
it is always a pending tragedy when suffering people reach out to socialism.
8
Failed socialist tactic are what? Almost no industry is nationalized, if the economy was revived, their debt would be serviceable. If you get a mortgage with a good income it's not irresponsible, but then If the economy fails and and you loose that job and default is that your fault?
2
Imposing austerity across the Continent and especially upon Greece has foreseeably led to an economic and humanitarian catastrophe. Greece now requires far more than simple debt relief. It requires massive public funding in infrastructure projects and public works to revive its depressed economy. Really most of Europe does.
It is not rocket science. When no one in the private sector is spending, the government must spend dramatically more to revive economic activity, even if it means worsening deficits and debt in the short term. When the economy revives, then the government can collect increased tax revenues from all the new profits and also reduce its own spending while increasing taxes to pay down debt and cure deficits.
We already learned this lesson from the Great Depression in the 1930s. Why cannot they do so in Europe? It is not merely a matter of abject, horrible suffering in Greece and elsewhere in Europe (e.g., Spain, Portugal, Ireland, etc.). Their moribund economy has been a severe drag on the world economy since 2010.
The Germans and others have exhibited an irrational, ruinous fetish about debt, likening public debt to private profligacy. But the two are not the same. Excessive government spending in ordinary times is harmful and ruinous during a time of prosperity. But during a time of recession it alone can save an economy from a self-reinforcing spiral of depressed spending, depressed business orders, ensuing lay-offs, and ever more depressed spending.
It is not rocket science. When no one in the private sector is spending, the government must spend dramatically more to revive economic activity, even if it means worsening deficits and debt in the short term. When the economy revives, then the government can collect increased tax revenues from all the new profits and also reduce its own spending while increasing taxes to pay down debt and cure deficits.
We already learned this lesson from the Great Depression in the 1930s. Why cannot they do so in Europe? It is not merely a matter of abject, horrible suffering in Greece and elsewhere in Europe (e.g., Spain, Portugal, Ireland, etc.). Their moribund economy has been a severe drag on the world economy since 2010.
The Germans and others have exhibited an irrational, ruinous fetish about debt, likening public debt to private profligacy. But the two are not the same. Excessive government spending in ordinary times is harmful and ruinous during a time of prosperity. But during a time of recession it alone can save an economy from a self-reinforcing spiral of depressed spending, depressed business orders, ensuing lay-offs, and ever more depressed spending.
38
Yanis Varoufakis is tellung us that his government is serious about its agenda and that he has abandoned game theories in dealing with Greece's creditors. He also appeals to citizens of the Eurozone to put "their interests center stage". Although Eurozone countries share the single currency, national interests still prevail! Leaders have to account for the use of their taxpayers' money!
It's applaudable that his government wants to distance itself from its predecessors and is determined to forge reforms. His idealism is noteworthy. But it will take years to carry out structural reforms, like taxing the rich and diversifying Greece's economy. Would the voters have the patience and endurance to wait that long? They had enough of hardship, that's why they voted for Syriza. If the government doesn't deliver, they would bring it down again!
It's applaudable that his government wants to distance itself from its predecessors and is determined to forge reforms. His idealism is noteworthy. But it will take years to carry out structural reforms, like taxing the rich and diversifying Greece's economy. Would the voters have the patience and endurance to wait that long? They had enough of hardship, that's why they voted for Syriza. If the government doesn't deliver, they would bring it down again!
4
The advantage of the new government of Greece is already in the fact that these are people who want to change things for the benefit of their people. This is the primary goal, and that's fine.
4
That is all true. Neverthesless, positions and arguements of the Euro-Group are also true. This is no longer a shared game, as each party has set its own rules.
The objectives of the former game have never been realistic. Greece is a country that lacks fundamental conditions to comply with the criteria to comply with a Euro-based economic and social environment.
It looks as if the game and its objectives have changed now: Who is to blame for the inevitable Grexit? How can each party sell this to its electorate?
The objectives of the former game have never been realistic. Greece is a country that lacks fundamental conditions to comply with the criteria to comply with a Euro-based economic and social environment.
It looks as if the game and its objectives have changed now: Who is to blame for the inevitable Grexit? How can each party sell this to its electorate?
2
I really really hope that Varoufakis's idea will be turned into reality. I just can't ignore the fact that he stands against the great machine, that knows perfectly how to enslave people and how to manipulate their minds. But so many people around the world got sick of this system, and it's not just teenager's angst, it's a well-realized willing of adult and conscious people to change things that are obviously wrong.
1
The problem with the EC is that when a member state faces financial collapse the social security and seniors' medical checks do not keep coming from the center, as they do in the US when Florida or Arizona real estate goes bust. If Europe is a real community, it has to take care of all of its citizens. If borrowing governments wasted their loans, it is also true that lenders knew the risks and expected they could compel the local populace to pay, no matter what. It is an untenable arrangement and the lenders will have to suffer, too.
2
"Our government is not asking our partners for a way out of repaying our debts. We are asking for a few months of financial stability that will allow us to embark upon the tasks of reforms....." The new finance minister makes a convincing, eloquent case.
A new government and what appears to be a new, logiclal approach to this crisis. A few more months to determine if the new prime minister is on the correct path......if not, back to the drawing board. This crisis has been with us for an extended period of time. What is the harm in allowing another few months for the EU to assess whether this govenment has a viable plan?
"The care of human life and happiness and not their destruction, is the first and only object of good government."
Thomas Jefferson
A new government and what appears to be a new, logiclal approach to this crisis. A few more months to determine if the new prime minister is on the correct path......if not, back to the drawing board. This crisis has been with us for an extended period of time. What is the harm in allowing another few months for the EU to assess whether this govenment has a viable plan?
"The care of human life and happiness and not their destruction, is the first and only object of good government."
Thomas Jefferson
5
I get it; Greeks don't like paying taxes. I don't like paying taxes either.
12
Although I feel very bad about the economic conditions in Greece and their social consequences, we must remember that Greece would not be in this situation if the Greek elite actually paid their taxes. But it is apparent that the Greek government still lacks the social legitimacy to collect taxes from its own population. What the Greek finance minister fails to realize is that the German government probably also lacks the social legitimacy to collect taxes for Greece from its population.
16
Reading the comments here reminds me, resoundingly, why I have never sought to become any level of expert in European politics. It also, at points, makes our strong regional and historical differences in this country look manageable, not in small part because here we are all part of an American ideal, a dream and a vision, set in motion more than 230 yrs. ago, one which almost all citizens share. Hooray.
I find rigid positions in the face of changing circumstances a stinking bore. What's the point of pushing Greece, and Spain, too for that matter, so far down that it can never get back up?
The United States eagerly and intensely moved to rebuild Europe, and to a lesser extent Japan, after history's most deadly and destructive war, WW II. We did so, in part, in our own self interest: we needed Europe to come back so we could access their markets to help propel American economic growth. This worked like a charm, bringing on around 50 yrs. in which average American household incomes rose and helped to create the largest, best off, single nation middle economic class in the history of the world, with massive wealth at the top.
Europe will not return to full prosperity until it finds a way to help Greece and other southern and eastern nations escape being the basket cases they have become. Find a way. Make some deals. Put the debts on hold, forgive some debts, too. Build for tomorrow and stop fighting over yesterday.
Doug Terry
I find rigid positions in the face of changing circumstances a stinking bore. What's the point of pushing Greece, and Spain, too for that matter, so far down that it can never get back up?
The United States eagerly and intensely moved to rebuild Europe, and to a lesser extent Japan, after history's most deadly and destructive war, WW II. We did so, in part, in our own self interest: we needed Europe to come back so we could access their markets to help propel American economic growth. This worked like a charm, bringing on around 50 yrs. in which average American household incomes rose and helped to create the largest, best off, single nation middle economic class in the history of the world, with massive wealth at the top.
Europe will not return to full prosperity until it finds a way to help Greece and other southern and eastern nations escape being the basket cases they have become. Find a way. Make some deals. Put the debts on hold, forgive some debts, too. Build for tomorrow and stop fighting over yesterday.
Doug Terry
5
I agree with economist Varoufakis, and also with Greece's finance minister. First, if Europe is one, every one must share the burdens of every other. If not, better split Europe and let its counties dwindle into oblivion. In the second place, Greece can pay only if it makes money, an it cannot make money if every surplus goes to pay the banks that, knowingly, made bad loans. And third, this is a turning point as a decission must be taken if to give back the wealth to the ones that produce it, the european citizens, or agree to keep it in the hands of a handful of finance people that only move the money for- and backwards witouth ever making a new factory, a new shop, a new productive development IN EUROPE and for the european citizens.
1
Varoufakis takes a moral stand that Greece needs a few months of financial stability so as to "have a creditable plan for growing the economy in order to repay those loans, help the middle class get back on its feet and address the hideous humanitarian crisis."
Presumably the debtors don't believe this can be done and/or are against the principle of extracting the money to repay the debt from the top 1% of Greeks rather than cutting pensions and government services and selling off assets like the Port of Piraeus to other countries or to private interests. I don't know enough about the facts of the case to judge but privatization is often more an ideology than good financial practice. The US military offers examples of politicized and insane privatized expenses with no financial accountability. Our banks and financial services have lobbied for laws that favor them and are a disaster for debtors, especially student debtors, and their various fees amount to a tax on the entire US economy. The previous government of Greece seems to have had no control over its own economy.
I'm surprised that Germany, which treats its workers and its people well, would have zero sympathy. Maybe Varoufakis should consult them on how to restructure with the welfare of ordinary Greeks in mind rather than tell them to take a hike while he figures it out.
Presumably the debtors don't believe this can be done and/or are against the principle of extracting the money to repay the debt from the top 1% of Greeks rather than cutting pensions and government services and selling off assets like the Port of Piraeus to other countries or to private interests. I don't know enough about the facts of the case to judge but privatization is often more an ideology than good financial practice. The US military offers examples of politicized and insane privatized expenses with no financial accountability. Our banks and financial services have lobbied for laws that favor them and are a disaster for debtors, especially student debtors, and their various fees amount to a tax on the entire US economy. The previous government of Greece seems to have had no control over its own economy.
I'm surprised that Germany, which treats its workers and its people well, would have zero sympathy. Maybe Varoufakis should consult them on how to restructure with the welfare of ordinary Greeks in mind rather than tell them to take a hike while he figures it out.
1
The Euro is the elephant in the room. It shackles together countries that have very little in common besides their geographical proximity. A national currency is a fundamental tool of sovereignty. Southern European countries have abdicated their sovereignty to the stronger north, who is abusing them shamelessly. Greeks are not Germans. Their systemic corruption is different than that of Germany. A corrupt lender (and provider of unnecessary military equipment payable in Euros) has bribed a corrupt borrower and is now torturing the latter. So far, no politician in power in Europe has the courage to hint that maybe the Euro was not such a great idea, after all. Greece will be the first, but not the last country to get out of the Euro. Events are now moving faster than ideas are among the European bureaucratic class which rules (ineffectively) by decree through its banking mechanisms. Varoufakis is a voice of reason but I doubt he will be listened to.
1
The euro was a great idea. The problem was admitting Greece into the euro.
1
The EU is playing with Greece to the game of the cat against the maus.
Yesterday Mr Schäuble, with his habitual sensibility, commented that “he has pain for the Greek people which trusted this Government”, while Der Siegel (the German Government loudspeaker) said that Tsipras is loosing his support also in Greece: Germany is now also playing the war-type propaganda card!
Mr Varoufakis promised at the yesterday's Eu Meeting that he will wait the end of this week with the hope to receive a more positive answer to their requests.
It is my opinion that the Greek Government should instead treat the EU that they will leave the EU and the Eurozone if their request will be totally ignored: that is the only hot point that could shake all EU members, and not only.
In the meantime they would be better to go ahead with any alternative solutions and parallel dealings with other countries to solve the Greek socioeconomic emergency caused by the Troika.
Also this is a good shaking point, because this could pose a bigger question at NATO level.
The game became hard and urgent, so needs hard players and urgent decisions.
Yesterday Mr Schäuble, with his habitual sensibility, commented that “he has pain for the Greek people which trusted this Government”, while Der Siegel (the German Government loudspeaker) said that Tsipras is loosing his support also in Greece: Germany is now also playing the war-type propaganda card!
Mr Varoufakis promised at the yesterday's Eu Meeting that he will wait the end of this week with the hope to receive a more positive answer to their requests.
It is my opinion that the Greek Government should instead treat the EU that they will leave the EU and the Eurozone if their request will be totally ignored: that is the only hot point that could shake all EU members, and not only.
In the meantime they would be better to go ahead with any alternative solutions and parallel dealings with other countries to solve the Greek socioeconomic emergency caused by the Troika.
Also this is a good shaking point, because this could pose a bigger question at NATO level.
The game became hard and urgent, so needs hard players and urgent decisions.
3
Yanis Varoufakis,
You are a breath of fresh air.
Many of us knew you (and read your works) before you were appointed to your current office. We continue to be impressed by your ability to speak truth to power, while looking into power's eyes. You have come to the conclusion that the status quo is worse for Greece than the current course. That I agree. Other political parties in Europe have come to the same conclusion.
Teach those vapid, greedy, nation-destroying, family-destroying, speculating European banks a lesson. Tell them: NO MORE liquidation of nation's resources with their endlessly printed currency.
I hope, in time, coming off of this victory against the banks, you will be able to work with other rising parties in Europe to force REAL STRUCTURAL BANKING REFORM throughout Europe and then the world.
Perhaps the Second Phase of Democracy also begins in Greece. You would make proud my nations founders, who were roundly opposed to the tyrannical powers of banking: Jefferson, Jackson, and Lincoln. You are in good company, you should know, on your travels and, you have many friends throughout the world.
You are a breath of fresh air.
Many of us knew you (and read your works) before you were appointed to your current office. We continue to be impressed by your ability to speak truth to power, while looking into power's eyes. You have come to the conclusion that the status quo is worse for Greece than the current course. That I agree. Other political parties in Europe have come to the same conclusion.
Teach those vapid, greedy, nation-destroying, family-destroying, speculating European banks a lesson. Tell them: NO MORE liquidation of nation's resources with their endlessly printed currency.
I hope, in time, coming off of this victory against the banks, you will be able to work with other rising parties in Europe to force REAL STRUCTURAL BANKING REFORM throughout Europe and then the world.
Perhaps the Second Phase of Democracy also begins in Greece. You would make proud my nations founders, who were roundly opposed to the tyrannical powers of banking: Jefferson, Jackson, and Lincoln. You are in good company, you should know, on your travels and, you have many friends throughout the world.
10
But we aren't going to do what is right, and write down some portion of the Greek debt, are we? We aren't going to do this because obscenely wealthy bankers now dictate the economic policy in Germany.....and in essentially every other advanced western nation. Make no mistake, it is not "the Germans" or "the Swiss" or "America" that is driving the insanity of austerity. It is the banks.
13
No, it's not. Unfortunately it's european taxpayers' money.
1
Why dont you open your checkbook drain your own bank account and send you money to the Greek Govt before you ask the Germans to do the same.
2
I think the smartest next move for the EU would be to extend a 12-month interest-deferred payment holiday to Greece, and give that nation the chance to put one trembling foot ahead of the other - while at the same time being prepared to yank the deal at the first sniff of new or continuing corruption. Austerity on its own is not a solution, and those who persist in believing it is can point to no example in world economic history that supports their belief.
8
Dear Mr. Varoufakis. Civilization is not a game, indeed. Civilization is the amplification of human nature as it is meant to be, at its best.
Without love, no human baby would ever survive more than a few days. We are born out of love. So is civilization. In the past century, Germany's atrocities rested on obeying, no matter what.
So Germany had a pattern of finding “right” only what fit its leadership.
What authorities are German authorities now evoking, to act as robots anxious to keep Greece a “debt colony”?
Obviously the mood of High Finance.The world political leadership is still anxious to please High Finance. For High Finance, Greece is an example that needs to be made. For those who want to break High Finance, the new Greek government shows the way.
Because “right” has to be defined according to the Greek people, not according to what is right for High Finance, which has gone completely mad.
To check for madness, see the $800 trillions of financial “derivatives”, more than ten times world GDP. Contemplate also the four French banks that, should any of them fail, would bring down the world financial system.
You suggest to target “large-scale corruption” instead of the Greek middle-class with its privately owned pharmacies. However, the largest-scale corruption in this world is High Finance itself, the authorities German authorities abide by.
Greece saw worse, at Thermopylae and Salamis. Sometimes, it is right to fight, just because it’s right, no matter what.
Without love, no human baby would ever survive more than a few days. We are born out of love. So is civilization. In the past century, Germany's atrocities rested on obeying, no matter what.
So Germany had a pattern of finding “right” only what fit its leadership.
What authorities are German authorities now evoking, to act as robots anxious to keep Greece a “debt colony”?
Obviously the mood of High Finance.The world political leadership is still anxious to please High Finance. For High Finance, Greece is an example that needs to be made. For those who want to break High Finance, the new Greek government shows the way.
Because “right” has to be defined according to the Greek people, not according to what is right for High Finance, which has gone completely mad.
To check for madness, see the $800 trillions of financial “derivatives”, more than ten times world GDP. Contemplate also the four French banks that, should any of them fail, would bring down the world financial system.
You suggest to target “large-scale corruption” instead of the Greek middle-class with its privately owned pharmacies. However, the largest-scale corruption in this world is High Finance itself, the authorities German authorities abide by.
Greece saw worse, at Thermopylae and Salamis. Sometimes, it is right to fight, just because it’s right, no matter what.
5
It will be 2058 by the time Greece has paid back its EU debt. Who will be around to witness the event; to celebrate & savour it? Will it be achieved? The racing form is not positive. And Greece wants its financial crisis treated as a humanitarian problem not an economic catastrophe. Whatever you call it, it is a tragedy, a home-made one.
1
Good point....2058 is a long time. And we should all be asking the people of Greece--and their politicians: "how the hell did you get so far in debt so quickly"?
But then of course, America would have to explain how we got 18 trillion in debt keeps adding to it--with no obvious plans to end the deficits--or ever pay back the debt.
But then of course, America would have to explain how we got 18 trillion in debt keeps adding to it--with no obvious plans to end the deficits--or ever pay back the debt.
1
I support Greece's stance.
Like all other creditors, Bond holders also carry a credit risk. Why should they alone be repaid 100%?
A company's employees are not asked to repay a company's debt should it default. Similarly, why should citizens of Greece be forced to pay Bond holders when they didn't directly borrow from them?
Like all other creditors, Bond holders also carry a credit risk. Why should they alone be repaid 100%?
A company's employees are not asked to repay a company's debt should it default. Similarly, why should citizens of Greece be forced to pay Bond holders when they didn't directly borrow from them?
5
Well, yes, an economic "model" is usually a bad model of the real world.
So then, starting from a bad model of the real world posing putatively as
a real model of the real world, we find that Buster Keaton can fall off of
a bicycle six hundred ninety two times before the final reel has played
out.
So then, starting from a bad model of the real world posing putatively as
a real model of the real world, we find that Buster Keaton can fall off of
a bicycle six hundred ninety two times before the final reel has played
out.
Mr. Varoufakis I'm impressed that Immanuel Kant has been such a major influence, in this day and age that certainly came from left field! Nonetheless, let me add that Mr. Piketty's seminal work on inequality should not be overlooked, if implemented, it could be the greatest social experiment ever...targeting large scale corruption and leaving pensioners and family-owned pharmacies untouched.
1
Does Greece's colorful and clever Finance Ministrer know an example of a country solving its debt problem by assuming and adding to its existing debt? Greece's new government as the previous governments could have solved the immense corruption and the enormous bureaucracy without adding to the existing 353 billion euros of debt. It's time for action and not rhetoric.
2
Didnt every country after the world wars added more debt?
1
This is one American hoping the your sober assessment of the pain inflicted on the people of Greece will persuade the people of Europe (not the angry, selfish rich) to help their fellow Europeans grow their economies and employ those so desperately looking for jobs.
4
an appeal to game theory, kant and hegel, i am impressed. but that and $2.50 gets the greek minister a ride on the nyc subway.
this is a debtor/creditor negotiation, and so unfortunately game theory, or at least strategic thinking, does apply. these creditors also include debtors, such as portugal, italy and spain (PIS), and so it is a multi-party, multi-dimensional game, involving a pure creditor, germany, some more creditors than debtors, benelux and maybe france, and some more debtors than creditors, PIS. the greek minister wants to simplify, but the facts dont warrant simplicity.
there will be an agreement reached, distasteful to all, at the last moment, after a deilcious dinner and fine wine served at eu headquarters in the hague late into the night, as the eu ministers are wont to do.
and then everyone will do it again in a year or two, and be happy doing it again, because it will be only greece at the other side of the table, again, and not PIS as well.
this is a debtor/creditor negotiation, and so unfortunately game theory, or at least strategic thinking, does apply. these creditors also include debtors, such as portugal, italy and spain (PIS), and so it is a multi-party, multi-dimensional game, involving a pure creditor, germany, some more creditors than debtors, benelux and maybe france, and some more debtors than creditors, PIS. the greek minister wants to simplify, but the facts dont warrant simplicity.
there will be an agreement reached, distasteful to all, at the last moment, after a deilcious dinner and fine wine served at eu headquarters in the hague late into the night, as the eu ministers are wont to do.
and then everyone will do it again in a year or two, and be happy doing it again, because it will be only greece at the other side of the table, again, and not PIS as well.
We shall now watch Europe extract a pound of flesh from Greece without a drop of blood, and the Greeks make bricks without straw.
1
Mr. Varoufakis: Please Proceed. Your view is correct. Good Luck!
5
The truly irrational actors here are the debt holders. They've lost their money, period. They won't get it back. Punishing Greece is just an act of spite, and even that is irrational since it will just damage the EU and world economy further. Varoufakis's claims not to be bluffing are in themselves cheap talk, but he knows as an economist that the only way to make red lines credible is to sufficiently stake your reputation on it that to back down will destroy you. This is him throwing the steering wheel out the window, to use the game-of-chicken metaphor currently popular. Kant notwithstanding, he is being totally rational here. I only wish I could expect the same of Germany.
2
I propose what I'm calling a 33.33% plan. The investors agree to a 33/33% haircut, Greece agrees to pay 33.33% of what it owes. The EU prints Euros to cover the remaining 33.33%. It may be simplistic but some sort of new thinking is needed to fix this.
2
I think you will find a lot of support for your plans here, Mr Varoufakis. We're curious about the details though. How exactly will you "embark upon the task of reforms that the broad Greek population can own and support, so we can bring back growth and end our inability to pay our dues."? When you say "Against such cynicism the new Greek government will innovate. We shall desist, whatever the consequences, from deals that are wrong for Greece and wrong for Europe." what innovation do you refer to?
It seems to be clear that a bloated bureaucracy, tax evasion, over-dependence on welfare and a failure to innovate are among major factors that affected the Greek economy. To me, the obvious first steps would be to first take this opportunity (with your strong mandate) to restructure the government bureaucracy and make it more efficient. And second - to push for retraining the workforce to make it competitive in the areas that are currently hiring strongly - such as IT. And yes - break with the EU if you must, this is not the time for baby steps.
It seems to be clear that a bloated bureaucracy, tax evasion, over-dependence on welfare and a failure to innovate are among major factors that affected the Greek economy. To me, the obvious first steps would be to first take this opportunity (with your strong mandate) to restructure the government bureaucracy and make it more efficient. And second - to push for retraining the workforce to make it competitive in the areas that are currently hiring strongly - such as IT. And yes - break with the EU if you must, this is not the time for baby steps.
34
Forget about building an economic dynamo, the Greek people aren't industrious enough to work at the productivity levels needed to attract that sort of capital investment. Their government needs to hire the IRS, to teach them how to collect their cut before the taxpayer gets his money-grubbing hands on the cash. It doesn't help the U.S. spend less than it collects, but it prolongs the inevitable.
1
How can Greek government grow their economy by rehiring public employees that they had to borrow huge sums of money for in the 1st place?
Wealth has to exist to redistribute it.
Wealth has to exist to redistribute it.
8
I'd be grateful if anyone could point to a country where imposed austerity measures actually helped to fix a country's economy. Short or preferably long term is fine. Anyone?
It's the IMF's favorite cudgel, but then the IMF is a wholly owned tool of the large multinational corporations and banks, and insists on the privatization of anything worthwhile in the country it's 'helping', handing whatever it is over to their multinational overlords as a condition of their 'help'.
That is the 100% consistent unbroken record enjoyed by the IMF - formalized, codified, legalized thievery.
The Greeks, to their credit, finally said "NO!".
It was about time someone did.
It's the IMF's favorite cudgel, but then the IMF is a wholly owned tool of the large multinational corporations and banks, and insists on the privatization of anything worthwhile in the country it's 'helping', handing whatever it is over to their multinational overlords as a condition of their 'help'.
That is the 100% consistent unbroken record enjoyed by the IMF - formalized, codified, legalized thievery.
The Greeks, to their credit, finally said "NO!".
It was about time someone did.
4
If they had some kind of concrete solution, that would be great.
The old regime didn't address root causes like wealthy tax dodgers; hopefully that will turn around, and hopefully someone will give Greece a few carrots and not just the stick...
The old regime didn't address root causes like wealthy tax dodgers; hopefully that will turn around, and hopefully someone will give Greece a few carrots and not just the stick...
What we are witnessing is financial terrorism. Greece is saying "I can't breathe", and the world should listen.
6
You are correct!
A situation where a grown up or developed country acts like a child violates every rule in the civilized playbook, then when the adults come to dicipline the child for the bad behavoir they kick and screem so much it kills them enstead of taking there medicine. Sime kids will never grow up.
A situation where a grown up or developed country acts like a child violates every rule in the civilized playbook, then when the adults come to dicipline the child for the bad behavoir they kick and screem so much it kills them enstead of taking there medicine. Sime kids will never grow up.
1
This was an interesting piece but after having read it I'm not sure what I've learned. Mr. Varoufakis spends a significant amount of time discussing game theory and his background in the subject. Yet we should believe it when he says he is not currently practicing its principles? He says that he is not bluffing when he discusses his redlines. But everyone knows the point of a bluff is to make people think you aren't bluffing.
What I didn't hear is any sense of Greece's plan to become more competitive. No plan for improved tax collection. No changes to bloated pension systems like delaying retirement age etc. I'm not an austerity hawk but I would like to hear an actual plan rather than more talk about political games.
What I didn't hear is any sense of Greece's plan to become more competitive. No plan for improved tax collection. No changes to bloated pension systems like delaying retirement age etc. I'm not an austerity hawk but I would like to hear an actual plan rather than more talk about political games.
5
Hard-working Greek farmers and craftsmen and small business owners have been burdened with, and broken by, the debt taken on by their corrupt 1%. That debt was pushed by Deutsche Bank and Wall Street with the idea that they could charge high interest and would have an EU guarantee.
Now Greek children are going hungry. Old people are committing suicide. Sick people can't get medications. Thousands of nurses were laid off.
Germans believe the myths their media and their chancellor are telling them - that the Greeks are lazy and wasteful, so it's all their fault. It's always easy to scapegoat people when they are down. The truth is that German taxpayers are now being asked to guarantee the gambles of Deutsche Bank.
The bankers gambled and they lost. As always, they wanted to privatize their profits and now they want to spread around their losses - enabled by the German Christian Democrats under Angela Merkel.
Mr. Varoufakis is correct. I hope he and his government persist.
Now Greek children are going hungry. Old people are committing suicide. Sick people can't get medications. Thousands of nurses were laid off.
Germans believe the myths their media and their chancellor are telling them - that the Greeks are lazy and wasteful, so it's all their fault. It's always easy to scapegoat people when they are down. The truth is that German taxpayers are now being asked to guarantee the gambles of Deutsche Bank.
The bankers gambled and they lost. As always, they wanted to privatize their profits and now they want to spread around their losses - enabled by the German Christian Democrats under Angela Merkel.
Mr. Varoufakis is correct. I hope he and his government persist.
8
From what I've seen, the Germans don't actually believe the Greeks are lazy or wasteful; they have seenh how wealthy Greeks managed to get away with not paying taxes, how Goldman Sachs (among others) helped with the "creative accounting" which let Greece into the EU, and would like to see serious reforms pushed through that would help out the poor and milddle class, while getting the rich to pay their share.
Germans don't mind helping the poor; they do mind financing more Porsche Cayennes...
Germans don't mind helping the poor; they do mind financing more Porsche Cayennes...
2
Perhaps the Eurozone countries can issue mutually-guaranteed bonds. The guaranties will be only for the next 6 semi-annual interest payments. This is what the US government did in the 1980s to rescue Mexico (and bail out Citibank). In short, this can work like health-insurance, where the sick patient has access to resources to be nursed back to good health. This “rolling guarantee” approach provides a "smoothing period" something that is extremely vital to the whole banking/investment system. Thus, countries like Greece, can borrow at a much lower interest rate, that can make refinancing much affordable.
This also gives the moral ground to all country-members to question financial policies in all other members.
Furthermore, this solution does not depend on more political integration, and therefore it stands a better chance at being adopted.
This also gives the moral ground to all country-members to question financial policies in all other members.
Furthermore, this solution does not depend on more political integration, and therefore it stands a better chance at being adopted.
5
This is called ELA (Emergency liquidity assistance, http://www.economist.com/blogs/economist-explains/2015/02/economist-expl... ), greece can take up to 5 Billion.
But all this is in vain if the greeks keep on the banking march, every day 200 million euro are withdrawn. The first thing to enforce would be a capital control on the banks to ensure liquidity.
We are aware of what is happening to all financial assistance - at the moment this would be just irresponsible lending, and we don't want to be rebuked again for handing out credits which no effect.
But all this is in vain if the greeks keep on the banking march, every day 200 million euro are withdrawn. The first thing to enforce would be a capital control on the banks to ensure liquidity.
We are aware of what is happening to all financial assistance - at the moment this would be just irresponsible lending, and we don't want to be rebuked again for handing out credits which no effect.
1
Well done, Professor Varoufakis! Wishing you the best of luck and open minds at the negotiating table. Reason must win out in the end, or all of Europe will lose.
7
May the "Force" be with Greece if, indeed, Truth is on that country's side.
7
Excellent, Mr. Varaofakis. Be free. Be free from loans, be free from reforms, be free from Germany, be free for the ECB.
Blaze your own trail for Greece that you aspire.
Just stop insisting that Europe and Germany give you more of their tax dollars to pave the way.
Best of luck on your freedom quest - though I rather doubt that you really want it.
Blaze your own trail for Greece that you aspire.
Just stop insisting that Europe and Germany give you more of their tax dollars to pave the way.
Best of luck on your freedom quest - though I rather doubt that you really want it.
7
The Greek problem is the result of how our financial system operates. The ability to fool is admired, and tax avoidance and evasion are respected and emulated throughout. Only when these otherwise admirable activities prevent the repayment of debt do they become bad.
Creditors needed investments for their funds, and a wide range of public and private authorities worked to reassure them that these investments were safe or at least insured. Creditors knew how the system worked, so they were aware that their choices were leaps of faith, based on trying to see through rose-colored information to the reality beneath.
For creditor choices of investment to be more than leaps of faith, the system has to be more transparent. Since the ordinary ways of doing financial business are based on privacy and lack of transparency, this change in the system would replace financial swashbucklers with bean counters and make financial existence boring. Since creditors have not demanded such a change, they should be stuck with the consequences of failing to do so.
Creditors needed investments for their funds, and a wide range of public and private authorities worked to reassure them that these investments were safe or at least insured. Creditors knew how the system worked, so they were aware that their choices were leaps of faith, based on trying to see through rose-colored information to the reality beneath.
For creditor choices of investment to be more than leaps of faith, the system has to be more transparent. Since the ordinary ways of doing financial business are based on privacy and lack of transparency, this change in the system would replace financial swashbucklers with bean counters and make financial existence boring. Since creditors have not demanded such a change, they should be stuck with the consequences of failing to do so.
3
Magnificent!
I wish for you continuing Strength and Success.
I wish for you continuing Strength and Success.
5
Why isn't Mr. Varoufakis talking about collecting Greek taxes? Why isn't he talking about reforming bloated Greek bureaucracies to allow small businesses to exist legally, instead of in the underground economy? Why is the situation for Greece so intolerable that it cannot exist another few months? Despite Mr. Varoufakis' disclaimers, this is all about a stare-down between Germany's financial leadership and the new political leadership of Greece, to see who will blink first. That is the essence of gamesmanship. The EU, and especially Germany, has danced to the Greek pipes before, playing the song of 'reform tomorrow, but relief today.' The real cynicism which is sinking the Greek boat is the cynicism which the Greek people have toward their own government, which leads them to shun taxes at every turn, and take government jobs where there is no work, and wait for the next injection of Euros to keep the banks liquid. European lenders, especially Germany, is excoriated for lending to Greece (see Krugman's columns) and then excoriated for not lending (again, see Krugman). But nothing works if people don't pay any taxes.
14
What Mr. Varoufakis is asking for is quite reasonable. The sources of irrationality emanate from Germany and other northern European countries. These countries are constrained by a straitjacket of puritanical self-rightousness.
If the European countries can not bring themselves to act with a sense of rationality and caring about the Greek situation and the oppression that is being experienced by the Greeks, then other countries in the world, including the US, should help out this small country. After all, if Greece leaves the Euro zone there is a good possibility that other countries will too, and that will be bad for everybody.
If the European countries can not bring themselves to act with a sense of rationality and caring about the Greek situation and the oppression that is being experienced by the Greeks, then other countries in the world, including the US, should help out this small country. After all, if Greece leaves the Euro zone there is a good possibility that other countries will too, and that will be bad for everybody.
7
Sustaining an international economic system based on mounting unsubstantiated debt is delusional. The casinos of Macau makes more financial sense than Frankfurt's bankers. Collapse is inevitable. It's fitting that capitalism and democracy display their oil and water quality in Greece.
4
Greece is better off leaving the Euro so it can devalue its currency to make its products more competitive overseas and to attract many more tourists with a cheaper currency. That's is growth. Staying in the Eurozone would make "returning to growth" an impossible goal. I can see Mr. Yanis' point of view, but I can also see the German point of view. According to the former Singaporean minister Lee Kuan Yeu, long-term growth and prosperity can only achieved with following the rules of law, fair taxation, and a clean government without corruption. Greece has so far refused to do any of the above. So how can long-term and lasting growth be achieved? By the way, Singapore is a lot smaller and poorer than Greece and it has become one of the richest countries in the world within 30 years by following the rules above.
42
A recent report said that a, I believe, significant majority of Greeks favor staying in the Euro. This, no doubt the present government takes into account.
You, Mr. Varoufakis, are the specter that the EU has been living in fear of, for almost a decade.
Your allegiance to the Troika has neither been "purchased", or otherwise gained, so for the moment you are a wild card.
I have little doubt that there is a plan in the works, a fallback position, a plan that will appear to acquiesce to certain of your demands, but in actual fact will be nothing more than a sop designed to help you save face and gain your allegiance.
Unless your demands are met fully, there is no way out for Greece, if it wants to remain a sovereign nation, other than to default on its debt obligations, leave the EU, and devalue the new drachma.
As I said earlier in a post in Krugmans article, this will be an opportunity for Greece to get its house in order, rebuild its economy, gain the respect of its people and put them back to work.
Haven't there been too many games already, in Europe, and elsewhere, games that have been designed to further enrich the insatiable .01%ters, and beggar the masses.
A great many people are waiting, watching, wanting to believe you are not another player...
Your allegiance to the Troika has neither been "purchased", or otherwise gained, so for the moment you are a wild card.
I have little doubt that there is a plan in the works, a fallback position, a plan that will appear to acquiesce to certain of your demands, but in actual fact will be nothing more than a sop designed to help you save face and gain your allegiance.
Unless your demands are met fully, there is no way out for Greece, if it wants to remain a sovereign nation, other than to default on its debt obligations, leave the EU, and devalue the new drachma.
As I said earlier in a post in Krugmans article, this will be an opportunity for Greece to get its house in order, rebuild its economy, gain the respect of its people and put them back to work.
Haven't there been too many games already, in Europe, and elsewhere, games that have been designed to further enrich the insatiable .01%ters, and beggar the masses.
A great many people are waiting, watching, wanting to believe you are not another player...
6
Many may not realize this, but if Syriza secures a favorable deal it could be a game changer for left-wing political activism throughout the developed world.
Decades of continual financialization, privatization, and cronyism have consigned the working poor and middle class to a state of permanent economic insecurity. Nothing will change until we collectively recognize that the policies pushed by Schäuble and other vapid elites are detrimental to human welfare. Sadly, millions of ordinary workers across Europe are having their primary economic interests undercut by the Eurozone's structural flaws. Major financial institutions, on the other hand, are thriving under the current conditions. It has become increasingly apparent that the chief beneficiaries of this deplorable system are the bankers, and their political partners.
Of course, a similar story could be told about the United States and a number of other countries. Deep-set economic malaise is, unfortunately, not confined to Europe. There is nothing sensible about the currency union's defective design and Germany's/the Northern Bloc's austerity fetishism. Rather than address the root causes of the Euro crisis, the EU elites would prefer to kick the can down the road, and shift the blame onto 'profilgate' Greeks. These narrow-minded politicians have backed themselves into a political corner since they have consistently refused to acknowledge the central role played by internal imbalances in creating this awful mess.
Decades of continual financialization, privatization, and cronyism have consigned the working poor and middle class to a state of permanent economic insecurity. Nothing will change until we collectively recognize that the policies pushed by Schäuble and other vapid elites are detrimental to human welfare. Sadly, millions of ordinary workers across Europe are having their primary economic interests undercut by the Eurozone's structural flaws. Major financial institutions, on the other hand, are thriving under the current conditions. It has become increasingly apparent that the chief beneficiaries of this deplorable system are the bankers, and their political partners.
Of course, a similar story could be told about the United States and a number of other countries. Deep-set economic malaise is, unfortunately, not confined to Europe. There is nothing sensible about the currency union's defective design and Germany's/the Northern Bloc's austerity fetishism. Rather than address the root causes of the Euro crisis, the EU elites would prefer to kick the can down the road, and shift the blame onto 'profilgate' Greeks. These narrow-minded politicians have backed themselves into a political corner since they have consistently refused to acknowledge the central role played by internal imbalances in creating this awful mess.
10
For many years, the citizens of Greece were bombarded by advertisements for loans for every activity that they could not afford. I visit Greece every summer and those ads were everywhere! Some were unbelievable. For example, diakopodaneia were loans offered to finance an August vacation! Those that offered them now want to punish those that accepted them! Amazing! Who is more irresponsible? This humanitarian crisis requires a humanitarian approach that respects human dignity and targets hope for the future.
7
so people are not responsible for their own actions? advertisements trump free choice?
2
You make Greeks sound very stupid. If these ads are so compelling they would be in use all over the world. Appears they are effective only in Greece. Wonder why?
2
I'm not an economist, so perhaps there is something I'm missing when I read of Greece's economic travails. The GDP of Greece is approximately the same size as that of the State of Connecticut in the United States. And yet, it appears that Greece wields enormous influence in the political and economic initiatives of the European Union. Clearly this is a case of the tail wagging the dog?
1
Greece's problem is that it is Socialist society with a Capitalist's tastes. Greeks want to enjoy the personal consumption of countries grounded in capitalism, but work government jobs until age 55 upon which time they should retire to (more) leisure. Yes, I'm painting with a broad brush here, but is more accurate than not.
Greece will leave the Euro not because they want to run a primary surplus of 1% vs. 4.5%, but because they will not undertake the major structural reforms necessary to give Greece a chance at long-term economic success.
Greece will leave the Euro not because they want to run a primary surplus of 1% vs. 4.5%, but because they will not undertake the major structural reforms necessary to give Greece a chance at long-term economic success.
13
Spoken like a true ideologue. There's this place that would drive you crazy. It's called France. No, not the dying country you imagine, but the real home of 60 million people, some very wealthy, some very poor, but all free of your pathetic Calvinist obsession with the virtue of self-sacrifice
1
Hard to believe the Germany's history of WWI harsh reparations is not still playing a factor in their current perspective towards Greece even if subconsciously.
1
The problem is not Greece, but the world-wide monetary system. The monetary system requires for every dollar created, a dollar of debt plus interest. This means that in the aggregate there literally is never enough money to pay off the debt.
An alternative monetary system has been analyzed in a research paper by none other than the research department of the International Monetary Fund. It is entitled, "The Chicago Plan Revisited," and what it contains contradicts many of the statements made by the troika and the mainstream media. August 2012 , WP 12/202, Jaromir Benes and Michael Kumhof.
In order to solve the debt crisis, we must look at fresh ideas because the current ideas cannot solve the debt crisis. Even responsible spending by governments and people require that there still be left over much more debt than could ever be paid. Under our current monetary system, perpetual and growing debt, in the aggregate, is mandatory; and Greece's future is all our nations' future.
But under alternative monetary systems, like the one listed above, neither the people, nor their governments will be stuck in perpetual growing debt. We must realize that none of the proposals mentioned in the media can solve the ever-growing worldwide debt crisis. Only new ideas can do that.
An alternative monetary system has been analyzed in a research paper by none other than the research department of the International Monetary Fund. It is entitled, "The Chicago Plan Revisited," and what it contains contradicts many of the statements made by the troika and the mainstream media. August 2012 , WP 12/202, Jaromir Benes and Michael Kumhof.
In order to solve the debt crisis, we must look at fresh ideas because the current ideas cannot solve the debt crisis. Even responsible spending by governments and people require that there still be left over much more debt than could ever be paid. Under our current monetary system, perpetual and growing debt, in the aggregate, is mandatory; and Greece's future is all our nations' future.
But under alternative monetary systems, like the one listed above, neither the people, nor their governments will be stuck in perpetual growing debt. We must realize that none of the proposals mentioned in the media can solve the ever-growing worldwide debt crisis. Only new ideas can do that.
2
To mix metaphors, with the European humanitarian crisis you've got the bit in your teeth, but must still give it the spurs. It is well enough to speak of impermissible suffering, but also needful to measure it in ways that will resound beyond the confines of the Greek electorate. Pinned to the relationship of hardship and productivity is the supply side as well as demand, both available to forecast growth discontinuities. Quantify for Greece, but also across the EU, a grand project whose announcement the social media would consider a rearing neigh, helping to deflect the steel being wielded. Getting numbers for the "humanitarian leap" out there would help immeasurably, perhaps warming up to a gallop at the provincial level, then making the full charge at municipalities. Admittedly, this would be a formidable project requiring transdisciplinary data, but it does seem necessary if 324 million other Eurozone citizens are to pivot on 11 million Greeks.
Greece is just a deadbeat and should be treated accordingly.
One difference from when Greece first got it's bailout is that no one cares now.
When the first Greek bailout was negotiated, there was fear that Greece's default would bankrupt the big Euro banks.
That was the only reason Greece got a sweetheart deal, which Greece no longer wants to comply with.
The Euro banks aren't going to go under now when Greece defaults.
Go ahead. Default. No one cares.
Greece is a small blip on the world financial radar screen.
We won't miss you.
One difference from when Greece first got it's bailout is that no one cares now.
When the first Greek bailout was negotiated, there was fear that Greece's default would bankrupt the big Euro banks.
That was the only reason Greece got a sweetheart deal, which Greece no longer wants to comply with.
The Euro banks aren't going to go under now when Greece defaults.
Go ahead. Default. No one cares.
Greece is a small blip on the world financial radar screen.
We won't miss you.
8
Exactly.
For the time being, it amounts to German (European) pensioners paying their Greek compatriots. But that ship has sailed!
Especially with your outrageous demands. Fact is that Greece should have never been admitted into the Eurozone. It was all based on fabricated/ falsified statistics.
How does one reconcile an economic zone w/ a country of tax cheaters/liars. One doesn't!
Time to call it quits!
For the time being, it amounts to German (European) pensioners paying their Greek compatriots. But that ship has sailed!
Especially with your outrageous demands. Fact is that Greece should have never been admitted into the Eurozone. It was all based on fabricated/ falsified statistics.
How does one reconcile an economic zone w/ a country of tax cheaters/liars. One doesn't!
Time to call it quits!
8
Mr Varoufakis,
you have set the benchmark high! A Finance Minister who is not only eloquent, but knowledgeable of economics, compassionate to the misery of a populace suffering due to austerity AND be able to quote philosophy!!?
Joe Hockey (current Treasurer of Australia) please take note, here is a template to model yourself and your actions upon.
you have set the benchmark high! A Finance Minister who is not only eloquent, but knowledgeable of economics, compassionate to the misery of a populace suffering due to austerity AND be able to quote philosophy!!?
Joe Hockey (current Treasurer of Australia) please take note, here is a template to model yourself and your actions upon.
3
Kant also contended that using reason without applying it to experience only leads to theoretical illusions. Have Greece’s euro-zone partners listened to Kant? Since 2010, they have been committed firmly to a program of austerity based on their version of reason. They have been steadfastly refusing to abandon this program to start negotiating, instead, for a new program in which debt repayment would be tied to the growth of Greece’s economy. In contrast, Yanis Varoufakis has responded constructively to the (catastrophic) experience of the Greek people. He is proposing a sensible, growth-driven repayment of debt but Angela Merkel (and her euro-zone colleagues) has been saying no. So, ironically, Kant’s Greek student practices his teachings whereas his German student seems to be possessed by theoretical illusions. But extrapolating from Dr. Merkel’s stellar economic and social record, I am confident that, before the closing-of-the-ring, she would make sure that reason and experience come together.
1
There has been a lot of talk about games and who blinks first. Instead it would be very helpful to learn how the new Greek government is going to address tax collection, what projects they are going to fund that benefit the economy and increase employment in the private sector and what protections they are going to put in place to prevent looting of these funds. Such clear statements, in my opinion, would go long way to influence public opinion in Europe and elsewhere in Greece favor.
2
Very true. And with dogmatic Marxists at the head of the new government, what is the likelihood of meaningful reform in that direction? Zero. They just want OPM (other people's money) once again. But as Thatcher said, it eventually runs out.
1
So if money runs out, where did it go? Clearly the Greeks dont have it.
1
The story line of this soap opera is getting tired. Someone should decide to do something to move the plot along. If Greece can't pay its debts, then there is nothing to be done. The French and German banks that so enthusiastically threw money at Athens now have to face the music. Greece will default and the world will move on. I hope it happens sooner rather than later. I am so tired of reading the same thing over and over about this never ending "crisis."
3
The era of never ending growth is ending. Greece is the canary in the coal mine.
1
There's no good reason to keep Greece in the Euro. They have proven that they are not reliable. Throw them out and write off the debt.
7
Greece entered the Eurozone with fake financial data, and later abused this by obtaining cheap loans which were used for everything but economic development. Compare this to Czech, Poland, Hungary and other industrious nations which never entered the Eurozone, in order to be more competitive, at the expense of the standard of their own citizens.
Greece failed to use the the abundance of foreign funding (2001-onward) to establish economic dominance in the emerging economies of the Balkans (Albania, Bulgaria, Macedonia, Kosovo, etc.). Due to the corrupt practices of the mainly government-owned companies- telecoms, banking, petroleum, etc., most of the investments in those countries collapsed or are presently working with loss.
Greece failed to use this period of 5-6 years of foreign aid to improve the tax collection system - you can still pay a non-fiscal cash bill in any restaurant and hotel in Greece.
Syriza has no administrative capacity to make the necessary reforms - most of the government employees were hired by PASOK or ND, and by firing counsellors and re-hiring janitors, you are ousting the professional administration that could technically deliver any reforms.
You are cancelling the privatization, and with that you are picking in the eye of the global interests, such as Germany. Furthermore, you are threatening to rewind the process in already privatized companies!?
So how do you think the heartbreaking rhetoric and another 6 months of funding will help you?
Greece failed to use the the abundance of foreign funding (2001-onward) to establish economic dominance in the emerging economies of the Balkans (Albania, Bulgaria, Macedonia, Kosovo, etc.). Due to the corrupt practices of the mainly government-owned companies- telecoms, banking, petroleum, etc., most of the investments in those countries collapsed or are presently working with loss.
Greece failed to use this period of 5-6 years of foreign aid to improve the tax collection system - you can still pay a non-fiscal cash bill in any restaurant and hotel in Greece.
Syriza has no administrative capacity to make the necessary reforms - most of the government employees were hired by PASOK or ND, and by firing counsellors and re-hiring janitors, you are ousting the professional administration that could technically deliver any reforms.
You are cancelling the privatization, and with that you are picking in the eye of the global interests, such as Germany. Furthermore, you are threatening to rewind the process in already privatized companies!?
So how do you think the heartbreaking rhetoric and another 6 months of funding will help you?
11
What is a man of integrity and good will doing in politics? It is obvious that Yanis Varoufakis is ill prepared to sell out the people who elected him in order to assure his fortune or fame.
The Euro Zone is in for some very hard times if they must now face a statesman instead of a gamesman.
What have the Greeks brought among us?
The Euro Zone is in for some very hard times if they must now face a statesman instead of a gamesman.
What have the Greeks brought among us?
8
How about a repayment plan that is based on growth. That is, Greece only pays its debts when it has growth. You want Greece to pay. Ok. Then help Greece grow.
3
Greece has to make structural reforms and that bit of jargon actually means that they have to stop having 3 people in the public sector do the work of 2, they have to have people retire later in life on less money, hey have to accept that there economy will shrink in size but that is not a bad thing as their economy was artificially inflated with debt to an unsustainable size.
All this German bashing and faux Keynesian-ism is prolonging the inevitable.
All this German bashing and faux Keynesian-ism is prolonging the inevitable.
27
I don't know if all this talk of lazy, feckless Greeks is true, but most of the corrupt have already siphoned off their money; hence all the new faux Greek restaurants, delis and property owners in London & SE England.
What I do know is that Greece has lost 25% GDP in 4 years and now has 50% unemployment. For people pushed so far default holds little fear.
What I do know is that Greece has lost 25% GDP in 4 years and now has 50% unemployment. For people pushed so far default holds little fear.
3
Which is worse? Greece being tied to the current bailout program or Greece being on the drachma. I think it is a draw. So Mr. Varoufakis, I agree. Greece needs a completely new deal and the time to work it out. Your people need relief.
2
Yes, the Greek people need relief, but it's not everyone else's responsiblity to pay for it. The suffering Greek people did in fact elect over and over -- for decades -- the crooks that have ruined the economy. So they need to fix their own problems.
Their relief will come through returning to a devalued drachma. Vide Argentina et al.
Their relief will come through returning to a devalued drachma. Vide Argentina et al.
2
Truth to power. Good luck to Yani and Greece!
6
Lets be honest, did Greece deserve to be in E.U? Or how about Bulgaria? Or perhaps Romania? Or Croatia? These are some of the nations that are simply too corrupted, or have been for years. Greece and all of the estern Europe need serious change, first corruption, then financial reforms.
Does anyone even talk about 2004 Olympics in Greece, what happen? Big bubble! Western Europe has made many mistakes by letting country from estern europe joyin E.U way too easy, they are paying the price for it now, and will be for years to come.
Does anyone even talk about 2004 Olympics in Greece, what happen? Big bubble! Western Europe has made many mistakes by letting country from estern europe joyin E.U way too easy, they are paying the price for it now, and will be for years to come.
2
It is time for Mr. Varoufakis to start acting as finance minister not as a arrogant bully. Threatening with Leaving Euro zone is childish. EU will survive Greece will be left out and another military dictatorship is not out of question.
3
yani, you know what the history of modern greece is - one long chain of repressive governments. only for the last 30 years has greece enjoyed any kind of freedom. unfortunately, many of the politicians who brought about that change were corrupted by money and power...and helped bring the country to the dire straights it finds itself in today.
are the greek people ready to pull the plug on the euro? that is the question...i know syriza enjoys great popular support right now, but in the same breath people say they do not want to break their chains to the euro...they cannot have their cake and eat it too!
i for one would like to see the country begin to rebuild free from the control of brussels - and more importantly from germany. i would return tomorrow if i could be assured that i would not be returning to a society resembling a snake pit - where one needed a crony network to get the simplest tasks done, or arbitrary policies of the robber-state did not make life impossible.
many greeks wish to return to greece - but first there has to be real desire to implement change. the first steps have been taken, now our hope is you follow through with your promises! so far, so good!
are the greek people ready to pull the plug on the euro? that is the question...i know syriza enjoys great popular support right now, but in the same breath people say they do not want to break their chains to the euro...they cannot have their cake and eat it too!
i for one would like to see the country begin to rebuild free from the control of brussels - and more importantly from germany. i would return tomorrow if i could be assured that i would not be returning to a society resembling a snake pit - where one needed a crony network to get the simplest tasks done, or arbitrary policies of the robber-state did not make life impossible.
many greeks wish to return to greece - but first there has to be real desire to implement change. the first steps have been taken, now our hope is you follow through with your promises! so far, so good!
1
Greece promised many times to weed out corruption and to reform
Read Greece’s Newest Odyssey
By THOMAS L. FRIEDMAN
Published: May 11, 2010
Never happened,
Read Greece’s Newest Odyssey
By THOMAS L. FRIEDMAN
Published: May 11, 2010
Never happened,
2
Viva Varoufakis! Invoking Kantian ethics is brilliant. It reminds us all that the European Union must be true to Enlightenment ideals and not punitive austerity.
4
Yes -- but does Varoufakis really not know about Kant's view on the obligation to repay one's debts? Because there are many Germans who will happily provide him with the references.
1
In the US, when someone goes bankrupt, the lenders are forced to write off a portion of their loans to the debtor, sometimes a large portion. However, they are permitted to take possession of the debtor's assets, and they certainly will loan the person no more money for several years. The bankrupted is forced to reduce spending to come into line with his or her income.
The problem with Greece is that it committed fraud in representing its finances for years, and now wants to go back to spending more than its income, with others being forced to finance its spendthrift ways. I personally hope that Merkel hangs tough, and that Greece is forced to default and leave the euro zone. It's bankruptcy is no more important than Detroit's was.
The problem with Greece is that it committed fraud in representing its finances for years, and now wants to go back to spending more than its income, with others being forced to finance its spendthrift ways. I personally hope that Merkel hangs tough, and that Greece is forced to default and leave the euro zone. It's bankruptcy is no more important than Detroit's was.
1
One has to admire Yanis Varoufakis and Alexis Tsipras! They are not afraid to speak truth to power. Austerity has paralyzed Greece. Anyone with two eyes can see this plain as day. And yet the calls for austerity have not been called out for their economic barbarism and brutality. An economic war against Greece has been waged and fought without a single bullet fired. And no one in Europe has spoken a word, except to demand Greece pony up fast. The only democratic way out of this dark ages for Greece, (who has a majority of her voters having recently decided austerity must go) is to let Greece Grow and prosper while she pays off her enormous debt. Otherwise a nation of slaves is born in the what was the birthplace of democracy. And if that happens it will allow the whole world to see anti-democratic mess that is Europe. And if that happens as we all know things will get ugly and dark indeed.
3
When you lend money, you are taking a chance it will not be paid back. It's an investment. It's an asset. Investments and assets can lose money. Nobody forces anyone to lend money; the lender does it willingly and should be aware of the risks involved.
Sorry, Germany and the others, but Greece is not able to pay you back as agreed. Grow up and start renegotiating their debt.
Sorry, Germany and the others, but Greece is not able to pay you back as agreed. Grow up and start renegotiating their debt.
3
They know it won't be paid back, but they're now being asked to advance further good moneys after bad with no change in borrower behavior. I believe that's one of the definitions of insanity.
Greece has a debt problem but the larger problem is structural. Requesting a smaller GDP growth target to help all those in needed is correct, but not doing the required reforms is wrong.
1. Greece has a particularly large public sector which is grossly inefficient and corrupted. There are hundreds of thousands of families which are fully vested in this. All major parities in the past did nothing to hurt this block of voters and you are no different. For example, you want to re-hire even those who were fired because of submitting false documents and you refuse to evaluate public employees.
2. The private sector has lost more than 1 million jobs. Yet your party refuses to implement most of the reforms that the EU is recommending to open up the economy and allow the creation of new jobs in the private sector. Unfortunately, most in your party believe that the way to grow the economy is for the state to hire more permanent employees (which is very different from Obama’s approach to spend money on infrastructure projects to kick start the economy).
3. When growth is the number one target, education matters. Yet the new prime minister of education said that academic excellence is a plaque that needs to be removed from the system because those that achieve it at young age have a burden to carry for the rest of their lives, while those that don’t feel like second class citizens!
So tell me Dr. Varoufakis, which sane person would continue financing this "kind" of Greece?
1. Greece has a particularly large public sector which is grossly inefficient and corrupted. There are hundreds of thousands of families which are fully vested in this. All major parities in the past did nothing to hurt this block of voters and you are no different. For example, you want to re-hire even those who were fired because of submitting false documents and you refuse to evaluate public employees.
2. The private sector has lost more than 1 million jobs. Yet your party refuses to implement most of the reforms that the EU is recommending to open up the economy and allow the creation of new jobs in the private sector. Unfortunately, most in your party believe that the way to grow the economy is for the state to hire more permanent employees (which is very different from Obama’s approach to spend money on infrastructure projects to kick start the economy).
3. When growth is the number one target, education matters. Yet the new prime minister of education said that academic excellence is a plaque that needs to be removed from the system because those that achieve it at young age have a burden to carry for the rest of their lives, while those that don’t feel like second class citizens!
So tell me Dr. Varoufakis, which sane person would continue financing this "kind" of Greece?
48
You're wrong on a couple points, beginning with the fact that Greece isn't requesting a "lower GDP growth target." Greece wants to be able to run a lower primary surplus--1.5% in stead of 4.5%, which means that it will be able to invest more money back into its economy and its people, which would lead to higher growth, not lower.
4
The EC has no policy of reforms for Greece other than austerity. Budget demands are the only way outside interests and nations can engage in Greece's internal affairs; to present direct demands for specific policies violates Greek sovereignty. Instead the internal interference is framed as balance sheet goals--as they are in the US to destroy safety nets.
Moreover, both Greece's President and Minister are repeatedly open and transparent about Greece's past malfeasance and are willing to engage in restructuring Greece's economy--but without preserving and separating the special interests of the rich, who are fleeing the Greek banks. Greece's new government has been honest in telling the small nation that it must correct its sins of omission, but not by commission of reforms that benefit the elite.
Beyond its past, Greece is now being used as a sacrificial goat, called not to atone but to heel, as a warning to others who would forsake the orthodoxy and control wealthy special interests.
Moreover, both Greece's President and Minister are repeatedly open and transparent about Greece's past malfeasance and are willing to engage in restructuring Greece's economy--but without preserving and separating the special interests of the rich, who are fleeing the Greek banks. Greece's new government has been honest in telling the small nation that it must correct its sins of omission, but not by commission of reforms that benefit the elite.
Beyond its past, Greece is now being used as a sacrificial goat, called not to atone but to heel, as a warning to others who would forsake the orthodoxy and control wealthy special interests.
2
The bailout money from Germany went to German banks to finance German loans to Greece, none of it went to Greece to help Greece's economy. Why should Greece care what you think?
We need more politicians like Varoufakis.
Politicians with ethics and courage.
They are so rear that we hardly recognize them.
They are so rare that we assume an underhand complex motive rather than the simple truth.
The Austerity loving politicians are afraid that any alternative to their hair brain brutality might work. They could be proved wrong.
We in Ireland are shamed by our leaders who back the austocrats rather than
their own people. The ordinary people of Europe need to stand together so that elite and there laptop politicians are tamed.
I wish you well Yanis but I fear your enemies are more interested in there own skins and fat pay checks to allow you to succeed.
Politicians with ethics and courage.
They are so rear that we hardly recognize them.
They are so rare that we assume an underhand complex motive rather than the simple truth.
The Austerity loving politicians are afraid that any alternative to their hair brain brutality might work. They could be proved wrong.
We in Ireland are shamed by our leaders who back the austocrats rather than
their own people. The ordinary people of Europe need to stand together so that elite and there laptop politicians are tamed.
I wish you well Yanis but I fear your enemies are more interested in there own skins and fat pay checks to allow you to succeed.
17
I am afraid your country is more in need of a real minister than a 'finance' minister.
1
Minister Varoufakis makes an elegant, sincere, and even passionate plea that Greece is not playing a "game" with respect to renegotiating its debt as part of its commitment to the European Union (E.U.), but insists on being treated like an equal, and not an inferior, member of the E.U. There is too much lecturing and victim-blaming going on, especially given Greece's multi-year compliance with debt and demands that have led it to the brink of economic pauperism and total collapse. The European experiment with austerity is, as many economists like Paul Krugman in today's Times and the late John Maynard Keynes before him predicted, a total failure. If the German-led led E.U. cannot move past its apparent psychological rigidity an accept the economic reality of austerity, then Greece will be forced to default and perhaps exit the E.U. A tragedy of Greek proportions is playing out which for Germany may be its own Gotterdammerung.
4
Dear Mr Minister;
I think as many in the EU do, which is, inclusion of Greece, Spain & Portugal in the currency was probably a misstep.
The hard working, industrious folks of Greece are now subjected to hardships and the dream of prosperity under the Euro seems dwindling.
A good option would be to consider as you called it "end the humiliation", thus considering in Greece's National interest this option, a planned ( not abrupt) exit from the currency while keeping it's other status like free movement, market access etc intact.
It could be a win win, help boost Greece economy with a weaker currency, also help you bring back the social benefits currently being deprived as part of the current bailout.
I think as many in the EU do, which is, inclusion of Greece, Spain & Portugal in the currency was probably a misstep.
The hard working, industrious folks of Greece are now subjected to hardships and the dream of prosperity under the Euro seems dwindling.
A good option would be to consider as you called it "end the humiliation", thus considering in Greece's National interest this option, a planned ( not abrupt) exit from the currency while keeping it's other status like free movement, market access etc intact.
It could be a win win, help boost Greece economy with a weaker currency, also help you bring back the social benefits currently being deprived as part of the current bailout.
You don't have to convince NYT readers or liberal bloggers in the English speaking world. They are already firmly on your side. You need to convince your partners in the Eurozone that Greece can raise enough revenue to arrive at *modest* budget deficits. This won't happen unless Greece finally modernises her bureaucracy and cracks down on tax evasion. Previous Greek governments have promised exactly that, but failed to deliver. Unsurprisingly, your Euro-partners are no longer giving any Greek government the benefit of the doubt, esp. Syriza, which has vowed to return to political clientilism.
In the good old days, at least 15% of Greek government spending was financed through new debts. This is why you are in this mess, and why EU-financed stimulus alone will not solve your problem, because growth in Greece has never translated into good government and into an effective tax regime.
Also, you need to understand that not just the Dutch, the Germans, and the Spanish, but the entire Euro-group want to an example of Greece, which will have to leave the EU in order to leave the Euro. If you don't yield, the Eurogroup will crush your banking system, force you into a default, and ultimately force you to quit Europe. Greece's GDP is not much larger than that of metropolitan Detroit, which is why many in Europe feel that a Greek default is a risk worth taking to make a *political* point. After all, this ceased to be about economics a long time ago.
In the good old days, at least 15% of Greek government spending was financed through new debts. This is why you are in this mess, and why EU-financed stimulus alone will not solve your problem, because growth in Greece has never translated into good government and into an effective tax regime.
Also, you need to understand that not just the Dutch, the Germans, and the Spanish, but the entire Euro-group want to an example of Greece, which will have to leave the EU in order to leave the Euro. If you don't yield, the Eurogroup will crush your banking system, force you into a default, and ultimately force you to quit Europe. Greece's GDP is not much larger than that of metropolitan Detroit, which is why many in Europe feel that a Greek default is a risk worth taking to make a *political* point. After all, this ceased to be about economics a long time ago.
2
Yanis Varoufakis the finance minister of Greece still refers to Germany here as Greece's "partner." Greece is Germany's colony. There is one one way out FREEDOM from Germany's weapon of mass destruction aka the Euro.
2
The European taxpayers will pay again, as they did for each Greece bankruptcy, and the Greek Church and the Greek politicians will keep not paying taxes and getting wealthier. Why should it change according to Greeks?
3
That is imprecise. EZ citizens have not lost a single euro due to Greek bailouts. On the other hand the private sector haircut in 2012 took away 43 bn from Greek banks and insurance funds. Everybody says "you had a haricut". Yes, but we funded it!
At the same time private lenders were able to sell 50 bn of bad Greek bonds before the haircut, at very good prices, thanks to the time bought by the first greek bailout of 70 bn. In fact they profited.
We have not missed a single payment since we got the bailouts. That means you get your money back, which is what we try to ensure.
And the sums you hear about are not nowhere near the real debt burden to EU. That is because states are not persons. Since they are perpetual (they do not die like persons do), their debt is perpetual too. They can get new debt to fund old ones. So a haircut would effectively mean that EU taxpayers only lose *interest money*.
Given that simple but understated fact, La Tribune estimates that a 2/3 write-off of the Greek debt would cost the French taxpayers just 10.5 euros per year. Yes, you read right. 10.5 euros per year. 400 mn divided by taxpayer number. Estimations that each Frencman has given 600 euros to the Greeks, each Dutchman 1000 euros etc, are non-economical tabloid misconceptions.
It is a matter of politics and not morality. Germany would not allow another policy since their suppression of the South maintains the Euro at high prices, which is what they prefer to do for several reasons.
At the same time private lenders were able to sell 50 bn of bad Greek bonds before the haircut, at very good prices, thanks to the time bought by the first greek bailout of 70 bn. In fact they profited.
We have not missed a single payment since we got the bailouts. That means you get your money back, which is what we try to ensure.
And the sums you hear about are not nowhere near the real debt burden to EU. That is because states are not persons. Since they are perpetual (they do not die like persons do), their debt is perpetual too. They can get new debt to fund old ones. So a haircut would effectively mean that EU taxpayers only lose *interest money*.
Given that simple but understated fact, La Tribune estimates that a 2/3 write-off of the Greek debt would cost the French taxpayers just 10.5 euros per year. Yes, you read right. 10.5 euros per year. 400 mn divided by taxpayer number. Estimations that each Frencman has given 600 euros to the Greeks, each Dutchman 1000 euros etc, are non-economical tabloid misconceptions.
It is a matter of politics and not morality. Germany would not allow another policy since their suppression of the South maintains the Euro at high prices, which is what they prefer to do for several reasons.
27
Dear Mr. Minister..you can not ignore the Past and just hope for a bright future without doing the necessary in the Present.
3
The fact is that Greece owes money it can't repay and wants to borrow more so that it can spend more. The country doesn't want to comply with the bailout terms, and it has the option to declare bankruptcy, leave the Euro, go back to its own currency and then test the waters with capital markets. Calling its major creditor Nazis and demanding war reparations seems an even less promising strategy.
5
The priority of the Greek government should be the care and welfare of the Greek people. The international bankers want to change the rules of lending from one of mutual risk to one where they never lose. Lending involves risk and the bankers lost their bet on Greece. There should be no taxpayer bailouts for the banks. Let them take their losses just like everyone else does when a loan goes bad. Negotiations and adjustment of terms are certainly in order, but the Greek government must enter any negotiations with the intent of serving their citizens first. Otherwise, we will see more bank bailouts and more bank risk subsidized by people who cannot afford to ensure that the moneyed class always wins. The Greek people have suffered and are suffering - the banks will survive a little suffering and the world financial and political community will be better for it.
45
80% of Greek debt is currently held by government institutions and not banks. The only banks that will suffer from a Greek default are Greek banks. You're jousting at windmills.
"The priority of the Greek government should be the care and welfare of the Greek people."
O.K. Impedimentus. Fair enough. Now, as a bank you want to happily take billions in loss after loss for the Greek people, I'm going to give the Greek government the new loan they need for "the care and welfare of the Greek people".... why?
O.K. Impedimentus. Fair enough. Now, as a bank you want to happily take billions in loss after loss for the Greek people, I'm going to give the Greek government the new loan they need for "the care and welfare of the Greek people".... why?
Let's be clear. To suggest this is an issue of predatory banks losing their bet on Greece is wrong. Several Greek governments of the time, with the help of several international firms, deliberately lied and falsified its debt and economic figures. This helped the government to go on functioning with massive and unsustainable deficits,which were necessary to dole out public money and jobs (in many cases existing only on paper) to their supporters. Tax evasion was ( and is) rampant, normalized, and accepted. Public sector payrolls were bloated, and the jobs involved enjoyed cushy benefits and absurd job security. Many of the people on payroll were absentee.
The people of Greek enjoyed living on borrowed money for years, until the crash came. While some debt relief may be prudent and practical to help Greece get back on its feet, it MUST be accompanied by serious reform. Germany, and others, would be foolish to provide debt relief without REAL structural reform on taxes, public sector jobs and welfare benefits would be foolish and ill-advised. Why should there be debt relief when the Greek retirment age is lower than Germany's, while the Greek minimum wage is higher than Germany's, and while pensioner benefits remain unsustainable?
The people of Greek enjoyed living on borrowed money for years, until the crash came. While some debt relief may be prudent and practical to help Greece get back on its feet, it MUST be accompanied by serious reform. Germany, and others, would be foolish to provide debt relief without REAL structural reform on taxes, public sector jobs and welfare benefits would be foolish and ill-advised. Why should there be debt relief when the Greek retirment age is lower than Germany's, while the Greek minimum wage is higher than Germany's, and while pensioner benefits remain unsustainable?
Shouldn't Greece also learn how to tax its moneyed elite based on its own tax rules?
3
Has Greece put into place the structural reforms it needs to do? Like collecting taxes?
10
Political leaders with Mr. Varoufakis's clear-eyed vision, integrity, and wisdom are rare. May he prevail over the narrow interests of the European leaders he is contending with, particularly Mrs. Merkel.
3
This is no gaming theory when you want to change the rules of the game in, all others do embrace. Or just call it gaming about the gaming, to make the game fitting to your approach, and not the approach fitting to the game.
Some demands are simply just not realistic - like renouncimg the independence of the European Central Bank. This is sanctuary, the ECB shall never become a piggybank for some countries, their task is money, not finances.
Some of the new rules are very radical, and even though i would like them to be at least discussed, it would take rather years than weeks. Countries simply don't like to be rushed. And again, don't tell us this is for a common good or benefits us all, we want to judge that by ourself, and we want to sift throught that without ruffle or excitement.
Also at the domestic politics. Yes you made campaign promises - but isn't that exactly what all your predecessor have done, and what brought greece into this malaise in the first place ?
There are loose knots, and every european would like greece to make the rich take their share of the burden. If you would make some progress on this issue, this would give you a leverage for negotiations. But up to now it has been a deja vu of greeks failed policies.
And a final issue: everyone complains about germany, but noone wants to replace them. Stability is our most valuable asset, this is the metarule of the game, germany has been chosen to ensure that.
Some demands are simply just not realistic - like renouncimg the independence of the European Central Bank. This is sanctuary, the ECB shall never become a piggybank for some countries, their task is money, not finances.
Some of the new rules are very radical, and even though i would like them to be at least discussed, it would take rather years than weeks. Countries simply don't like to be rushed. And again, don't tell us this is for a common good or benefits us all, we want to judge that by ourself, and we want to sift throught that without ruffle or excitement.
Also at the domestic politics. Yes you made campaign promises - but isn't that exactly what all your predecessor have done, and what brought greece into this malaise in the first place ?
There are loose knots, and every european would like greece to make the rich take their share of the burden. If you would make some progress on this issue, this would give you a leverage for negotiations. But up to now it has been a deja vu of greeks failed policies.
And a final issue: everyone complains about germany, but noone wants to replace them. Stability is our most valuable asset, this is the metarule of the game, germany has been chosen to ensure that.
7
Instead of Germany ensuring stability, it appears to me that Germany's intransigence is once again ensuring.... instability and the slow breakdown of the union.
"... germany has been chosen to ensure that." I don't know who chose Germany for anything.
I doubt that Chancellor Merkel will want to go down in history as the leader whose stubborness was most responsible for the breakup of the E.U. And while other leaders will be culpable, it will be Germany, for historical reason, that will get the blame.
I doubt that Chancellor Merkel will want to go down in history as the leader whose stubborness was most responsible for the breakup of the E.U. And while other leaders will be culpable, it will be Germany, for historical reason, that will get the blame.
2
Your views seem unfortunately to be representative of many Germans: Germany knows what's best for the periphery countries, so they had better submit and put up with what Germany wants from them. Can't you even consider the possibility that the austerity policies that Germany prescribed have made things worse in Greece?
Varoufakis's saying that he has the interests of the whole of Europe in mind isn't just political posturing. I think as an academic economist he is quite qualified to offer his well-constructed ideas on returning the Eurozone economy to growth. He is trying to cut through German stubbornness.
As for ECB independence, is the ECB's decision to refuse Greek collateral a couple of weeks ago the action of an independent central bank? I don't see Varoufakis proposing the use of the ECB as a piggy-bank.
Finally, you criticize his reference to his campaign promises. You can't just use the failure of previous Greek policies to advocate the denial of democratic rights to the Greeks. This Eurozone will only work if the people of the peripheral economies are given some voice in proceedings. It's refreshing to see Greek politicians who are not so quick to capitulate in debate as were (and are) the politicians of my country, Ireland.
Varoufakis's saying that he has the interests of the whole of Europe in mind isn't just political posturing. I think as an academic economist he is quite qualified to offer his well-constructed ideas on returning the Eurozone economy to growth. He is trying to cut through German stubbornness.
As for ECB independence, is the ECB's decision to refuse Greek collateral a couple of weeks ago the action of an independent central bank? I don't see Varoufakis proposing the use of the ECB as a piggy-bank.
Finally, you criticize his reference to his campaign promises. You can't just use the failure of previous Greek policies to advocate the denial of democratic rights to the Greeks. This Eurozone will only work if the people of the peripheral economies are given some voice in proceedings. It's refreshing to see Greek politicians who are not so quick to capitulate in debate as were (and are) the politicians of my country, Ireland.
3
How odd that the NYT protests Netanyahu coming to speak to Congress and make a good showing to his base just before elections, but says not a word about Varoufakis lobbying for backing (emotional or financial) from the US the very week that Greece's feet are being held to the fire with the EU. Hypocrisy at its finest.
16
How odd not to be able to tell the difference between a major diplomatic gaffe -- arranging a talk with one branch of a major ally's government while keeping the branch responsible for foreign policy in the dark -- and appealing to the citizens of a powerful third party nation in a newspaper article.
67
The NYT, along with the majority of the country including not only Democrats in Congress but a significant number of Republicans as well, are complaining about Netanyahu coming to address Congress at the invitation of Republican Speaker of the House John Boehner because it's an unprecedented breach of protocol and a shockingly open display of disrespect and meddling in US domestic partisan politics.
For your analogy to even remotely work, you'd have to be complaining about what exactly, that this op ed writer didn't write this to President Obama instead, to have Obama send it to the NYT? Or that he should have addressed it to Obama, because that's what op ed writers from other countries who are in the government have traditionally done....
No, I'm sorry, there's no way to make that analogy work. It's one of the most bizarre ideas I've ever read in my life.
For your analogy to even remotely work, you'd have to be complaining about what exactly, that this op ed writer didn't write this to President Obama instead, to have Obama send it to the NYT? Or that he should have addressed it to Obama, because that's what op ed writers from other countries who are in the government have traditionally done....
No, I'm sorry, there's no way to make that analogy work. It's one of the most bizarre ideas I've ever read in my life.
35
How do you reconcile a speech before the US Congress as the equivalent of an op-ed in the NYTs? Hypocrisy at its finest? Please, give us all a break from such silly sermonizing.
18
You have a lot of support from Krugman advocates here. I believe that he would endorse your thought. Yes, the EU must change towards Greece, meaning, Germany must change. They must change precisely along the lines you propose. I think I've read that this all could potentially cause Germany to exit the Euro. I say with you, Yanis, do whatever is best for the Greek people themselves. They rightly come first, not the creditors.
65
But where would Greece and the people of Greece be without creditors?
1
It is not practical for Germany to exit the Euro.
Yes but, Yanis, show us the firm plan to bring home the billions that Greek rad evaders had hidden in Switzerland. Show us the firm plan to open the economy and stop the corruption that appears to be everywhere. Germany's idea of "give Greece austerity or give Greece death"' to steal a bit from Our founding fathers, is both impractical and wrong. But the Greek economy must change its ways if it wants to grow.
Deja vu
Thomas E. Friedman, NY Times, May 11. 2010: Lunch with the Greek PM
"Papandreou makes clear that he knows that the deal with the E.U. was not your garden-variety bailout-for-budget-cuts. No, if you really look closely at what it will take for Greece to mend its economy, this is actually a bailout-for-a-revolution. Greece’s entire economic and political system will have to change for Greeks to deliver their side of this bargain.
Papandreou says he is ready and so, too, he insists, is his country: “People are saying to me, ‘change this country — go ahead and change it.’ People realize that it needs change. You don’t want to miss this opportunity.”
They missed it.
Fool me once, shame on you; fool me twice, shame on me
Thomas E. Friedman, NY Times, May 11. 2010: Lunch with the Greek PM
"Papandreou makes clear that he knows that the deal with the E.U. was not your garden-variety bailout-for-budget-cuts. No, if you really look closely at what it will take for Greece to mend its economy, this is actually a bailout-for-a-revolution. Greece’s entire economic and political system will have to change for Greeks to deliver their side of this bargain.
Papandreou says he is ready and so, too, he insists, is his country: “People are saying to me, ‘change this country — go ahead and change it.’ People realize that it needs change. You don’t want to miss this opportunity.”
They missed it.
Fool me once, shame on you; fool me twice, shame on me
41
If by They you mean the previous conservative government who were in part responsible for the deficit, debt and collapse of the economy, a smaller partner to Pasok, but still complicit, then yes they did. They is not Syriza, Syriza are the other, people who don't have dirt on their hands, people with a different viewpoint other than constant compromises towards banks and with the welfare of its people top of the agenda.
If, having been given a decent crack at the whip then Syriza fail, then fair enough, but at the moment nobody is willing to give them air to breathe for fear of it showing up the inadequacies of the neoliberal world governments and their ideological need to wound the poor and lower middle classes with austerity that has been proven time and again not to work.
If, having been given a decent crack at the whip then Syriza fail, then fair enough, but at the moment nobody is willing to give them air to breathe for fear of it showing up the inadequacies of the neoliberal world governments and their ideological need to wound the poor and lower middle classes with austerity that has been proven time and again not to work.
1
he was sucking up to an american neo liberal. the terms of the deal were impossible. how many children have to be hungry in greece before german sadism is satisfied?
1
missed what? they imposed savage budget cuts that destroyed their economy and many people lives. and it (predictably) did not work. go read the Krugman piece today. math is math.
1
You bring up an interesting point: what are the motives of the other 18 players in Europe? Just as Greece alone put an end to European sanctions against Russia for its actions in Ukraine, any other country in Europe can veto the changes Greece seeks to the 2012 Memorandum.
So those red lines you talk about (poor choice of words by the way because Barrack Obama will almost certainly read this piece), if they are truly non-negotiable, then the bailout will almost certainly terminate at the end of this month because of the other 18 European countries, there are at least some who will never agree to your proposals.
In fact, some of these countries will be happy to let you kill the 2012 bailout agreement because it would mean that they no longer have to support you. Remember that even before you threatened to go over to Russia's side, there was opposition from Europe to lending Greece more money. It took heavy handed interference from the American President to force everyone into line.
What will Greece do if the bailout support ends prematurely? You are right in that no one can force Greece to leave the euro zone (you could not leave either even if you wanted to), but what would it mean to stay if the coffers are empty and salaries go unpaid? The Greek economy would collapse. But I suspect that would be the kind of revolution Tsiprais has been plotting all along.
Motives, it is all a question of motives.
So those red lines you talk about (poor choice of words by the way because Barrack Obama will almost certainly read this piece), if they are truly non-negotiable, then the bailout will almost certainly terminate at the end of this month because of the other 18 European countries, there are at least some who will never agree to your proposals.
In fact, some of these countries will be happy to let you kill the 2012 bailout agreement because it would mean that they no longer have to support you. Remember that even before you threatened to go over to Russia's side, there was opposition from Europe to lending Greece more money. It took heavy handed interference from the American President to force everyone into line.
What will Greece do if the bailout support ends prematurely? You are right in that no one can force Greece to leave the euro zone (you could not leave either even if you wanted to), but what would it mean to stay if the coffers are empty and salaries go unpaid? The Greek economy would collapse. But I suspect that would be the kind of revolution Tsiprais has been plotting all along.
Motives, it is all a question of motives.
21
We keep hearing from fans of the current fiscal situation in Greece that "Germans don't want to support the Greeks" or "they would no longer have to support you..."
Greece is now running a current budget surplus, so any funds going through Greece from Germany or Europe or Singapore are not supporting Greeks; they are supporting the creditors who recklessly lent to a corrupt previous government and now want to squeeze out every drachma, they are supporting the debt sharks who bought up Greek debt at pennies on the dollar, they are supporting international financial agencies that are happy to take everyone's money so that they can funnel it to those lenders and hedge funds.
Greece is now running a current budget surplus, so any funds going through Greece from Germany or Europe or Singapore are not supporting Greeks; they are supporting the creditors who recklessly lent to a corrupt previous government and now want to squeeze out every drachma, they are supporting the debt sharks who bought up Greek debt at pennies on the dollar, they are supporting international financial agencies that are happy to take everyone's money so that they can funnel it to those lenders and hedge funds.
22
"The Greek economy would collapse."
The Greek economy has shrunk by 25%. Unemployment is above 25%. These numbers are WORSE than in the Great Depression. And have gone on for as long. The Greek economy collapsed 7 years ago. And, under the failed plan of the Troika, has only gotten consistently worse.
The Greek economy has shrunk by 25%. Unemployment is above 25%. These numbers are WORSE than in the Great Depression. And have gone on for as long. The Greek economy collapsed 7 years ago. And, under the failed plan of the Troika, has only gotten consistently worse.
1
The entities that own Greek debt bought it off foolish greedy lenders. Why should the Greek people be willing to ruin their lives to pay off either group? If you screwed up financially, you'd file bankruptcy, wouldn't you? Or would you destroy your family?
1
It's time for leaders in Europe to step back and take a breather--with only one question in mind: if Greece leaves the EU, so what?
They lied about their underlying financials, in order to be admitted to the EU
They then conducted a drunken orgy of spending--like it didn't matter--to finance a lifestyle they couldn't afford--and didn't deserve.
They lied about their level of deficit spending--after they were admitted.
They received loans--in exchange for promising structural change.
They asked the EU to take a hair-cut on the loans, when they couldn't service the debt.
The EU took the hair-cut--in exchange for (again) promises of structural changes.
Greece is once again at the table--asking for more flexibility--and they have not made the structural changes. They have not privatized any businesses. They have not cut government as promised. They have not taken steps to curb corruption. They have not improved their tax collection practices.
Now, they want more concessions.
In other words: Greece hasn't kept their end of the bargain--but they want a better bargain from the EU--or else!
And this all leads to one important question: since when do debtors get to dictate terms to their lenders? It's complete folly.
Note to the EU. Wave goodbye---to your billions and to Greece's membership. You'll be better off. Let them print and eat worthless Drachmas.
They lied about their underlying financials, in order to be admitted to the EU
They then conducted a drunken orgy of spending--like it didn't matter--to finance a lifestyle they couldn't afford--and didn't deserve.
They lied about their level of deficit spending--after they were admitted.
They received loans--in exchange for promising structural change.
They asked the EU to take a hair-cut on the loans, when they couldn't service the debt.
The EU took the hair-cut--in exchange for (again) promises of structural changes.
Greece is once again at the table--asking for more flexibility--and they have not made the structural changes. They have not privatized any businesses. They have not cut government as promised. They have not taken steps to curb corruption. They have not improved their tax collection practices.
Now, they want more concessions.
In other words: Greece hasn't kept their end of the bargain--but they want a better bargain from the EU--or else!
And this all leads to one important question: since when do debtors get to dictate terms to their lenders? It's complete folly.
Note to the EU. Wave goodbye---to your billions and to Greece's membership. You'll be better off. Let them print and eat worthless Drachmas.
75
I couldn't agree more. For decades they lived on bloated salaries for jobs may didn't even show up to do, they retired early on obscene pensions, and refused to pay tax. Worst of all, they didn't save for a rainy day. Why should the EU take another haircut so a petulant child can avoid paying the piper?
27
There would be no better prove of concept for Varoufakis than greece being on their own.
Even if greeks would get all they ask for, it would be the other countries which would bleed to ensure the stability of the euro. This concept wouldn't work if all countries would copy greece. The recovery of greece would very much depend on the germans exporting huge piles of stuff and not asking for wage increases for themself.
Also there is a looming moral hazard.
Even if greeks would get all they ask for, it would be the other countries which would bleed to ensure the stability of the euro. This concept wouldn't work if all countries would copy greece. The recovery of greece would very much depend on the germans exporting huge piles of stuff and not asking for wage increases for themself.
Also there is a looming moral hazard.
3
The most telling phrase here is this; "since when do debtors get to dictate terms to their lenders."
And the answer is,always, when the lender refuses to negotiate.
And as a side bar, the new government in Greece is truly new and it would be the height of folly not to give them a chance to begin to set matters right. What you propose is the sort of nostrum that has always led to human catastrophes.
It is hard not to conclude that a lot of conservatives would rather see Greece crushed than repay its debts.
To sacrifice a whole country to satisfy the self righteousness of the righteous would be beyond foolish.
And the answer is,always, when the lender refuses to negotiate.
And as a side bar, the new government in Greece is truly new and it would be the height of folly not to give them a chance to begin to set matters right. What you propose is the sort of nostrum that has always led to human catastrophes.
It is hard not to conclude that a lot of conservatives would rather see Greece crushed than repay its debts.
To sacrifice a whole country to satisfy the self righteousness of the righteous would be beyond foolish.
2
If Greece wants to convince it's creditors that a real change is desirable it should first convince the Greek people that change can only come through hard work and sacrifices. Thew Greek populist government of Tsipras, which has just vowed to rehire thousands of let-off civil servants and cancel numerous privatization deals, is not demonstrating any desire to jump start the economy through a free market. Greece should strike a deal with Germany and France and agree on long term industrial investments (i.e. automobile factories) in Greece that will create thousands of jobs and help Greece build an new economy.
24
Sacrifices? What does 25% general unemployment rate and upwards of 40% in the 18-30 age bracket sound to you?
Greece does not need a BMW factory. IT needs to get rid of its own internal problems and look at their primary industries, tourism and agriculture which have been killed by the euro.
Greece does not need a BMW factory. IT needs to get rid of its own internal problems and look at their primary industries, tourism and agriculture which have been killed by the euro.
2
I honestly have no idea what planet people on here are from, but Automobile factories? Free markets? Is that working well in america then?
Greece's industry has been destroyed by decades of neglect and having non EU neighbours, the majority of textiles are produced across the borders in Albania or Bulgaria and it's never really had much in the way of engineerng or electronics. Its exports have been woefully neglected, indeed tonnes of tomatoes (and they are some of the finest) are destroyed because it was not worth selling them in the internal market and the external market was barely accessible even within the EU due to government incompetence. One thing the Greeks have in abundance is olives, but even a lot of that is sold in bulk for slashed prices to the Italians and then mixed with inferior grade Italian olive oil (that's to say that specific oil is, not that all Italian oil is) and sold as Italian olive oil! The products it can export it doesn't very well, and the one thing it does exploit well is location, and both tourism and shipping flourish, but both are vulnerable to the magnates and oligarchs that have and do avoid paying the taxes they should.
The Greek economy could be okay, it's just totally mismanaged.
Greece's industry has been destroyed by decades of neglect and having non EU neighbours, the majority of textiles are produced across the borders in Albania or Bulgaria and it's never really had much in the way of engineerng or electronics. Its exports have been woefully neglected, indeed tonnes of tomatoes (and they are some of the finest) are destroyed because it was not worth selling them in the internal market and the external market was barely accessible even within the EU due to government incompetence. One thing the Greeks have in abundance is olives, but even a lot of that is sold in bulk for slashed prices to the Italians and then mixed with inferior grade Italian olive oil (that's to say that specific oil is, not that all Italian oil is) and sold as Italian olive oil! The products it can export it doesn't very well, and the one thing it does exploit well is location, and both tourism and shipping flourish, but both are vulnerable to the magnates and oligarchs that have and do avoid paying the taxes they should.
The Greek economy could be okay, it's just totally mismanaged.
4
We continue to speak of the "Greek Bailout". Even Mr. Varoufakis, the present finance minister, implies the same. It was not a Greek bailout, it was a bailout of Germany's, France's and England's banks and financial institutions that had been allowed by EU regulators to make feckless and irresponsible loans to a corrupt and and criminal enterprise that was the Greek Government.
Not to be forgotten is that that corrupt, criminal government was coaxed into purchasing billions of dollars worth of sideways floating submarines from Germany to defend against the threat of another NATO state, Turkey.
Call a spade a spade, assess and allocate the damage and losses fairly and move on.
Otherwise the European Union will ultimately collapse
Not to be forgotten is that that corrupt, criminal government was coaxed into purchasing billions of dollars worth of sideways floating submarines from Germany to defend against the threat of another NATO state, Turkey.
Call a spade a spade, assess and allocate the damage and losses fairly and move on.
Otherwise the European Union will ultimately collapse
148
A bailout is about paying out lenders to ease the debts - get your definition right.
And no matter what, a 500 Billion bailout (240 are remaining as debt) is not just an oops. To pile up such a burden is a major systematical malefunction. There are bad actors in the european unions, but it is on everyones own behalf to deal with that.
It seems to me that you want to pledge for greece is not immatured enough to join the club.
And no matter what, a 500 Billion bailout (240 are remaining as debt) is not just an oops. To pile up such a burden is a major systematical malefunction. There are bad actors in the european unions, but it is on everyones own behalf to deal with that.
It seems to me that you want to pledge for greece is not immatured enough to join the club.
1
Yes! Thank you. It was not a bailout of Greece but a bailout of bankers who made bad and stupid bets and do not want to pay the price. The bankers should be guaranteed profits and repayment? I think not.
Mr Brashich, you seem to have deeper insights than most readers on the so-called "Greek Bailout". Let me add this to your thoughts: there is clear evidence that for many years preceding the debt crisis (and even when the crisis was imminent), the political establishment of the major EU powers were applying political pressure to the aforementioned major financial institutions and regulatory bodies to "overlook" irregularities and ensure continuous flow of money to Greece, effectively acting as brokers for EU's heavy industries (which were the ultimate beneficiaries of Greece's spending -- along with those making some handsome commissions, of course). Let's not forget that it was a US-initiated investigation that led to the revelation of the Siemens huge corruption scandal -- just to mention one prime example....
1
Ah, finally another voice besides Krugman in the wilderness of corporate self-interest and German blindness. Please know, Mr. Varoufakis, that there are many of us here in the United States who are on your side and hoping that you can help lead the Greek people out of that wilderness into a new era of prosperity and well being.
195
Put the money where your mouth is.
You don't help your own poor people, there is a lot of greece happening in the US. Give everyone a free access to health care, because that's what is standard in europe - what is holding you back ?
The US didn't pay for prisoners of gitmo, who had been tortured and released after years without any charge ( http://en.wikipedia.org/wiki/Murat_Kurnaz ). You may stand up for Goldman and Sachs cooking the books for greece to meet the Maastrich criteria.
You may actually help iraq and not just selling them expensive weapons.
Your hypocrisy is just a nuisance.
You don't help your own poor people, there is a lot of greece happening in the US. Give everyone a free access to health care, because that's what is standard in europe - what is holding you back ?
The US didn't pay for prisoners of gitmo, who had been tortured and released after years without any charge ( http://en.wikipedia.org/wiki/Murat_Kurnaz ). You may stand up for Goldman and Sachs cooking the books for greece to meet the Maastrich criteria.
You may actually help iraq and not just selling them expensive weapons.
Your hypocrisy is just a nuisance.
9
Another voice--besides Krugman? I would argue, it's the SAME voice. It's the irresponsible voice of Socialism--where other people's money is never valued.
3
He is 100% right. If you have no money you can pay your debts.
7
I think the issue is that the Greek political-socioeconomic system needs to be fundamentally changed. Having lived in the Balkans for several years, I see the Greek situation through a Balkan lens. In many Balkan countries, there is corruption, which leads to a fundamental distrust of government, which leads to tax evasion, which leads to government deficits, and therefore government borrowing in order to maintain social spending programs to maintain stability, which is necessary because the private sector is skewed toward maintaining corrupt, vested interests based on an uncompetitive economy. It's a vicious circle. Can the new government change things? Why not give Greece a temporary moratorium on debt service to demonstrate a willingness to crack down on corruption and tax evasion in order to generate the spending capacity needed to lessen austerity? The pact between the government and the governed in Greece needs to be completely re-written in order for the vicious circle to be broken. It may not be possible, but give the new government a window of opportunity to change Greece for the better.
64
Yes. That makes good sense.
Act now.
Act now.
1
The Balkan angle is interesting. After WW2 the State Department couldn't decide if Greece should belong to their European desk or the Middle Eastern, partially due to it's history as part of the Ottoman empire.
Sound reasoning. I ask because I do not know- has Greece been given this opportunity already?
He brings European Hope to my heart...........
Libya, Ukraine, 50% youth unemployment, Europe has to think big. Greece is micro. What will build the foundations for multi-regional prosperity?
Growth-linked, long term, high-quality European Infrastructure Bonds. Build a carbon zero infrastructure. Develop install European dc grid , ballistic graphene from North African solar to Russian gas turbines. Grid battery revolutions. And then sell the finest 21st century technologies and products to the world. Anything less is pushing a string against cataclysmic momentums.
.............and a long lovesong...:
https://vimeo.com/hilarykoobsassen/ascendent-accumulation
Libya, Ukraine, 50% youth unemployment, Europe has to think big. Greece is micro. What will build the foundations for multi-regional prosperity?
Growth-linked, long term, high-quality European Infrastructure Bonds. Build a carbon zero infrastructure. Develop install European dc grid , ballistic graphene from North African solar to Russian gas turbines. Grid battery revolutions. And then sell the finest 21st century technologies and products to the world. Anything less is pushing a string against cataclysmic momentums.
.............and a long lovesong...:
https://vimeo.com/hilarykoobsassen/ascendent-accumulation
5
I wish all politicians were this articulate and this coherent with their campaign promises. Best of luck Y.V.
116
Unfortunately, most are.
1
The only course that provides hope for both ordinary Greeks and for their creditors is to restore the Greek economy to health. Obviously, requiring Greece to raise taxes and cut spending enough to run generate fiscal surpluses sufficient to meet their debt obligations will destroy--not build--its economy.
Only if a sufficient monetary supply and a sufficient level of government spending are sufficiently maintained to stimulate and grow the Greek economy will Greece's creditors be repaid without Greeks suffering even more than they have. If the European Central Bank pushes too hard, Greece may find it necessary to abandon the euro and return to its own currency so that it can float at a level where its exports become more attractive. Insisting on Draconian measures may ultimately raise the question of just how many divisions the ECB has.
Only if a sufficient monetary supply and a sufficient level of government spending are sufficiently maintained to stimulate and grow the Greek economy will Greece's creditors be repaid without Greeks suffering even more than they have. If the European Central Bank pushes too hard, Greece may find it necessary to abandon the euro and return to its own currency so that it can float at a level where its exports become more attractive. Insisting on Draconian measures may ultimately raise the question of just how many divisions the ECB has.
16
Isn't it time for debtors to simply admit that Greece can't and won't repay its debts? Loan Greece no more money, write off the money already thrown into the black hole. and let Greece run its own affairs: either reform its tax collection system to get enough to support the services it insists Greeks need or else don't -- and let some of the services end. As it is Greece is the tail wagging the dog. There's no need to do anything regards Greece's membership in the European community. If Greece wants to stay (without financial props) let it stay. If Greece wants to leave the community and struggle on its own, that's alright too. Greece (like many defaulters before) will not cease to exist simply because outsiders stop loaning it money. It will simply have to make some decisions about how it plans to proceed from here.
38
I understand that one of the problems in the Greek government's budget is the lack of consistency in collecting taxes. Is it true that the Greek taxpayers stopped paying taxes in the last couple of months in expectation of a Syriza victory so that the Greek government now has 5 billions Euro less revenue than planned ?
Have you presented to the Eurozone a credible plan how to overcome this obstacle before demanding that the current program be replaced by a bridging loan without any conditions ?
Have you presented to the Eurozone a credible plan how to overcome this obstacle before demanding that the current program be replaced by a bridging loan without any conditions ?
19
The time has come for the EC lenders to recognize the limits of their philosophy that a rolling loan gathers no loss. Greece can never repay the loans that were both improvidently given and taken without an economy that produces enough to both operate the country and pay off the country's debt and such an economy cannot exist under the current circumstances. A work out agreement that ties the required hair cut the lenders must now accept to the obligation of the Greek government to both collect all of the taxes owed it as well as expend the savings of the work out on the country's infrastructure can bring the Greek economy back to a semblance of normal. But do either of the parties want that or would they rather have their talking points. These negotiations will provide the answer. I am not without any hope, just the barest thread.
10
Yet, Mr Varoufakis never mentioned any haircut for current bond holders in this op-ed piece. He speaks only about growing the Greece economy so that it can repay debts. In not talking about haircuts or writing off bad debts, Mr. Varoufakis can pretend to be an elegant statesman. He has been unwilling to admit that Greece wants others to write off Greece's debts to them. Without doing so he is not really being open and honest.
3
"The major influence here is Immanuel Kant, the German philosopher who taught us that the rational and the free escape the empire of expediency by doing what is right." Wow! This is the right finance minister at the right time to be at the helm in Greece. I hope for the sake of the future of Europe that Angela Merkel comes to her senses and crafts a plan along the lines that Varoufakis has proposed. And if she doesn't, leaving the Euro is the only way out to a better future.
72
I admire everything that Greece has accomplished throughout history. The country is worthy of great respect. As one little person, I try to buy Greek products from olive oil to yogurt. I have been dismayed about the proliferation of so-called "Greek Yogurt" products that, in fact, are recipes stolen from the Greek people. I'd like the Greek government to seek a patent on this name and own it as a wonderful product that no one else came up with. Maybe this is an example of political ineptitude but I continue to buy yogurt that at least has a close tie with the country. Greek yogurt cannot come from New Jersey. Greece has so much to offer the world but ineptitude & mismanagement has given it the short stick
9
The secretly negotiated TTIP does exactly propose that Greek Yogurt and German Beer does not have to come from either country.
The author raises interesting questions but I am pessimistic anything will change the outcome, especially in the long term. History has shown that when the economic outlook is bleakest those with the most transportable skills leave to parts of the world where they can make a new start. This is unfortunate for many reasons but mostly because those are the exact skills and drive that the country needs most.
So in all this discussion all I hear is how to keep some semblance of the status quo instead of how to grow the economy in new ways or retrain workers for new skills to take advantage of new opportunities. Then again maybe that's the difference between capitalism and socialism.
So in all this discussion all I hear is how to keep some semblance of the status quo instead of how to grow the economy in new ways or retrain workers for new skills to take advantage of new opportunities. Then again maybe that's the difference between capitalism and socialism.
4
Having visited Greece for the first time last summer, I was at once devastated by the evident suffering on the streets of Athens and at the same time admiring of their determination. The determination to live with a sense of dignity under brutal conditions.
Syriza's frankness in articulating their position is refreshing. And Varoufakis is hardly arguing like a radical. His is a middle of the road path to rebooting the European economy , when all Europeans' economic interests are taken into consideration.
Frankly, we need this frankness in our own political culture. We need a plan that speaks to the economic interests of all. This before the 1% realizes too late that they could have had less obscene gains and political stability instead of pitchforks, torches, and civil strife.
Syriza's frankness in articulating their position is refreshing. And Varoufakis is hardly arguing like a radical. His is a middle of the road path to rebooting the European economy , when all Europeans' economic interests are taken into consideration.
Frankly, we need this frankness in our own political culture. We need a plan that speaks to the economic interests of all. This before the 1% realizes too late that they could have had less obscene gains and political stability instead of pitchforks, torches, and civil strife.
130
Agree. Our 1% is becoming our less-than- 1%.
Mr. Varoufakis, you are standing up against the neoliberal orthodoxies which have caused so much harm.
Please continue what you are doing.
Please continue what you are doing.
170
Need we remember that it was Goldman Sachs that was brought in to "cook the books" in preparation of Greece's Euro entry, developing the tools and culture for an already corrupt political process to flourish, that same culture that almost tanked the world economy two years before Greece teetered on the brink of disaster. P. Krugman's editorial on this same page is both timely and wise - providing it is read, its content remembered in the righteous circles writing history.
1
Well you are dealing with Germany which seems at the moment to have lost its soul. They seem to have forgotten WW1 .
28
The Greeks want nothing to change when it is obvious that significant cultural and economic changes have to be made.
24
It's funny how the cultural and economic changes being demanded of the Greeks, and of the middle and working classes almost everywhere, are to the advantage of the very well-heeled. Not to let past Greek governments off the hook, but there are often two parties to a bad debt, a spendthrift borrower and an avaricious lender who knows perfectly well that he can cash in regardless - exactly as happened in the US mortgage crisis.
An equitable resolution of the Greek crisis demands that the creditors share in taking the same bath they demand of their debtors. The cultural change that's needed most is among the world's high financiers run amok, along with their political servants. Just maybe, the Greeks are the ones who can force it on them.
An equitable resolution of the Greek crisis demands that the creditors share in taking the same bath they demand of their debtors. The cultural change that's needed most is among the world's high financiers run amok, along with their political servants. Just maybe, the Greeks are the ones who can force it on them.
55
M,
An "Equatable Resolution" would be for Greek Citizens to begin to pay taxes, Greek Public Employees to stop taking "little envelopes" to do their jobs, the Greek Government to go after the citizens hiding money abroad not the Editor who publishes the list of who's hiding the money and all Greeks to shut down one of Europe's largest "Grey" economy.
None of which is going to happen!
An "Equatable Resolution" would be for Greek Citizens to begin to pay taxes, Greek Public Employees to stop taking "little envelopes" to do their jobs, the Greek Government to go after the citizens hiding money abroad not the Editor who publishes the list of who's hiding the money and all Greeks to shut down one of Europe's largest "Grey" economy.
None of which is going to happen!
5
The case made by Krugman in vain
With game theory comes up again,
Will attention be paid?
Is Merkel afraid?
To shut down austere retention/
With game theory comes up again,
Will attention be paid?
Is Merkel afraid?
To shut down austere retention/
12
last line should have been
And austerity will retain?
And austerity will retain?
3
Greece is a distracting symptom of a general malaise:
no economic dynamo begotten with all the cheap cash available.
No big - for the grand kids - multiplier effect to harvest for peace, prosperity and profit. No 21st century European hegemony or economy.
In short, No way forward to what should be.
no economic dynamo begotten with all the cheap cash available.
No big - for the grand kids - multiplier effect to harvest for peace, prosperity and profit. No 21st century European hegemony or economy.
In short, No way forward to what should be.
1
Good one, Larry.
2