I once spoke with the former US finance minister, Larry Summers. He said to me: “Yanis, you’ve made a huge strategic mistake.” I asked him in what way. “You won the election.” From the very outset, Syriza has borne the brunt of tremendous anger because we called a programme into question that has been the dominating and unchallenged doctrine in Europe for years: austerity. A policy of cuts that has been failing for years but that is systematically impoverishing our population. It leaves people feeling hopeless. Both young and old. What we are currently experiencing is the total triumph of neoliberalism [over democracy]. It spells the end of humanity.Amen if that is so. But the fat lady hasn't sung just yet. Conquering a small country like Greece is not conquering Europe, let alone the world.
Monday, August 3, 2015
Yanis Varoufakis — "They bury the values of democracy"
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“They bury the values of democracy”. My heart bleeds for Greeks. What they mean by that is that they no longer have the right to vote themselves piles of other peoples’ money: German and other core country taxpayers’ money in particular.
If Greeks are so keen on the people of one country voting themselves money earned by people in other countries, how about reversing the whole process: give Germans the right to vote themselves the contents of Greeks’ bank accounts, plus Greek owned houses and Greek islands.
Give the negotiations more time. A precedent was set in Cyprus, and more will set with Greece.
"If Greeks are so keen on the people of one country voting themselves money earned by people in other countries"
It is not money earned by people in other countries. The way ESM works is that other member states issue promises. Euros come from ECB.
Varoufakis:
In 2008, the Greek government of the day under Karolos Papoulias passed a bill allowing the state to spend 28 billion euros in one go. But none of that went to pay the pensioners, officials or workers. It was a gigantic rescue programme for the banks. And as a result government debt virtually exploded. All of the recovery programmes that have since been launched on behalf of Greece, are no more than bank rescue packages. The headlines in the papers always say: “More financial aid for the Greeks”. Or “New cash injections for Athens”. When instead they should read: “Banks get taxpayer’s money again.” Leave me be with your money! That’s nothing more than help for BNP, Société Générale and Deutsche Bank...
We tried to implement an emergency food programme for the poor – but the troika disallowed it. We tried to take action against the wealthy, the oligarchs and the sharks – that was also disallowed. I’ve asked for help in these issues from my dialogue partners in Berlin, Brussels and Paris. But that wasn’t forthcoming. Instead, the Eurogroup told us unceremoniously that we shouldn’t do anything on our own initiative. If we did, they would punish us. We didn’t have a chance. They wanted to stonewall us. When we nevertheless took action against the oligarchs, the troika simply protected them...
From the very beginning the aim was to cause our government to collapse or to overthrow it.
...the big surprise for me was how little the concept of democracy means to the most important players. How indifferent they are to the tangible impact of their policies. When I wanted to address the issue in the Eurogroup, Dijsselbloem just snapped at me, saying: “We don’t talk about that. It’s too political!”
...Throughout this euro-crisis, the question is never whether the structure of the eurozone is the reason why everything has become unstable. The fact that surplus countries have been forced into the straitjacket of a common currency with importing countries. All one hears is that the lazy Mediterraneans have lived beyond their means and that they should simply be as hardworking and frugal as the Germans.
That is the mantra.
It’s all about the balance of power. Who was responsible for awarding all those loans? The BMW Bank. The Mercedes-Benz Bank. Purchase! Enjoy! Here’s a loan, you don’t need your own money! But every reckless borrower is faced with a ruthless lender. The bankers were fully aware that they were taking an immense gamble – but they were driven by wanton greed...
The fundamental question remains: are the powers that be really interested in ending this crisis?
This crisis of the century is too good to leave it unexploited. Right at the outset, Schäuble told me that we could no longer afford our welfare state. In this sense, they are unashamedly taking advantage of the humanitarian catastrophe. Thanks to this crisis, they can now implement all these painful things – wage cuts, pension cuts, privatisation – that would never win them any votes at an election.
...the Eurogroup is where the future face of Europe is being shaped, where decisions are being made that affect the lives of millions. Where, if not there, should we be having discussions?
...Schäuble represents Germany; and Germany is Europe’s powerhouse. That constitutes the key strength of his arguments. Not wisdom....
Just recently I visited Germany and countless people approached me in the street, saying: “You’ve given us the courage to believe that a better Europe is possible.”
http://www.stern.de/politik/ausland/yanis-varoufakis---they-bury-the-values-of-democracy--6364696.html
The bankers were fully aware that they were taking an immense gamble –
Or they were aware that those loans carried zero risk.
Schäuble told me that we could no longer afford our welfare state
Malthusians are winning...
So Neoliberalism is actually Neomalthusianism. Discredited by reality they have found another foothold.
Krisjan,
Yes but loans granted to Greece gratis the ECB printing press get spent on, amongst other things, imports from Germany and other core countries. Assuming the latter countries’ economies are at capacity (which is approximately true, if not exactly true) then demand has to be reined in in core countries. Thus in effect taxpayers in core countries pay for loans to Greece: something which German taxpayers have worked out.
I imagine you’ll understand that point, though I wouldn’t expect “John” whose comment is just under yours above to get it.
Yes I understand Ralph, It is about imbalance in EZ. It is a moral battle because they think they all have independent economies, they don't yet understand what the euro did to their independence, politically and economically.
Ralph,
For every dollar lent, there is a borrower. For every net exporter, there is net importer. If there is fault, then there is fault on both sides. That is why there is the maxim - "neither a borrower nor a lender be!"
It is also true, that in a market economy with a limit on the currency issued, the currency will ultimately accumulate in a few hands. Therefore, that currency has to be taxed out of those few hands, or it has to be lent to willing borrowers. No currency accumulation, no lending. So the best way, and the Christian (Kristjan) way is for the Governments to spend on the poor, and to tax the rich (unless of course the rich spend on philanthropy or on increasing the wealth of their employees) - So bring back the 95% marginal tax bracket!
See also this article Could We Ever See a Maximum Wage in the U.S.?
People seem to have forgotten that the US once had a 95% top marginal tax bracket (90% + 5% surcharge) which was only done away in the early 1960's)
@Ralph
"Yes but loans granted to Greece gratis the ECB printing press get spent on, amongst other things, imports from Germany and other core countries."
Actually, the loss of demand for German goods has forced them to develop more trade outside the Eurozone. The amount of money issued by the ECB is far too little to sustain internal trade across the zone, especially in the face of German hoarding.
Bad ideas of dead economists.. they're infested by people that believe that money magically comes into existence if you just "make more stuff" and that you can eat all of the pizza and never have to buy more flour or pepperoni. Schauble and his buddies should go run a pizza shop for awhile.
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