An anti-austerity economist who has angered peers with his brash style, Varoufakis is facing calls to quit after returning from a meeting of euro zone finance ministers in Riga isolated and empty-handed while Athens scrambles to avoid bankruptcy. Read more.
But what was he supposed to come back with? All he had from Day 1 were empty threats. I hope this guy doesn't play poker; he'd be lucky to leave with his underwear still on.
Now Tsipras should resign, too, because he's gonna promote the same class of useless wimp to that position and expect results that are going to be unattainable. The Germans must be beside themselves with laughter.
Varoufakis lost, Tsipras lost, Syriza lost, the Greek people lost, Europe lost...they all lost the day Tsipras got elected and said "Greece will not leave the euro." Bingo. You. Are. Done.
I called it here from Day 1.
What a bunch of pansies.
Another Liberal Class of ball-less, gutless, pansies selling out again.
I may go back to voting. You know, I gave that up after Obama. No reason to vote. However, now I am thinking of going back and I am going to vote Conservative across the board. I am going to vote for the rightest of right wingers that I can possibly vote for. At least that way I can see the person's eyes who's about to take everything from me. It's a lot better than being stabbed in the back.
And now that I've said that...
Get ready for Hillary.
26 comments:
I tweeted on the subject of politicians and balls recently:
https://twitter.com/RalphMus/status/583838113836990464
"I am going to vote for the rightest of right wingers that I can possibly vote for."
Probably the outcome all over the West tbh. Right now the only hope for Europe is LePen lol
(TYPO)
As a child, many years ago, I remember seeing a photographic sequence where a rabbit/hare, chased by a bobcat, was eventually cornered. Having nowhere else left to go, the rabbit turned on the bobcat. Frigthened and stunned, the bobcat left the rabbit escape.
If a rabbit is capable of that, maybe we are too. Maybe we just need to be deep enough in shit to react.
So, that's the good news I can offer.
The bad news is that, as a wise man once told me, no one knows how deep the latrine may be.
I guess we'll have to wait and see. Pass the por corn, please.
Good one, Ralph!!
What's with the let's-give-Varoufakis-a-kick mentality on this blog and the threads?
Varoufakis is the only rational, even sane, finance minister in the EZ and EU, but his position is almost impossible. Years from now he'll be recognised for his farsightedness, as he stood practically alone in trying to stop a destructive unravelling of the EZ and possibly the EU.
His only hope is (or rather was) to get Italy, Ireland, Spain, Portugal, etc on his side of the argument and threaten Germany with Armageddon - mass default which would sink German banks.
Unfortunately, all these turkeys have voted for Christmas. How Greece can possibly remain a member of the EZ is difficult to see.
A banking collapse and a far worse depression would ensue if Greece tried to reintroduce the drachma. If Greece continues its membership of the EZ, it'll bleed to death slowly and painfully.
So, all you tough guys, forever bitching about Varoufakis's testicular fortitude, what do you propose he does? Can't you appreciate his position? When your chief negotiating partner is the deranged lunatic Wolfgang Schauble, your problems are extremely serious.
The only rational proposal I've heard is Richard Werner's. He proposes that Greece inform its commercial banks that it expects/cajoles/demands/threatens these banks to credit the Greek state with as many euros as is necessary to keep the state functioning. Why Greece has not implemented it is a mystery! Meanwhile, the troika can go fuck itself.
John I dont know about that wrt YV ...
Imo he hasn't demonstrated that he understands the 'tyranny of the math' (to borrow a phrase from Bill Mitchell. ...) in regards to the NIA results that the Ez people are demanding. ..
I think he lacks a crucial form of understanding to be able to be Greece's finance minister. .
This is good news imo... rsp
John Im sure he's a good person... rsp
Matt , compared to whom... to Schauble aka glorified accountant-stupid lawyer the Grinch?
And are you assuming YV will be replaced by someone who is more competent?
The only thing good that can come out of the whole situation is that it blows up. And the sooner, the better.
@RalphMus lol
John:His only hope is (or rather was) to get Italy, Ireland, Spain, Portugal, etc on his side of the argument and threaten Germany with Armageddon
No. Greece can just decide to reassert its sovereignty after being subjected to impossible demands and illegal treatment. Leave the Eurozone, or arrange to be thrown out - which still may be the actual strategy.
A banking collapse and a far worse depression would ensue if Greece tried to reintroduce the drachma.
No, the uncritical acceptance of this belief - especially by Greeks like Varoufakis is the biggest problem Greece has. The most potent weapon in the hands of an oppressor is the mind of the oppressed. (NOT "the oppressed's" lack of balls)
As Mark Weisbrot said, the most likely outcome of Greece leaving the Eurozone is ... a robust recovery.
If Greece could leave the EZ painlessly, I'd be for it.
But how could Greece practically reintroduce the drachma without the country imploding? I have the greatest respect for people like Mitchell, Weisbrot, etc, but what is their solution? What would they actually do if they were in YV's position?
It has probably now dawned on YV that his "negotiating partners" are quite mad and know nothing about economics. Apparently, YV was met with scorn and derision when he started talking economics to the other finance ministers! WTF!!!
What practical steps could Greece take? Freeze bank accounts while the euro is being withdrawn? How do you circumvent the associated dangers?
As far as I can tell, Varoufakis wants to restructure the "debt", end the austerity, get the economy growing and stay within the EZ. It may or may not be the best solution, but it is at least a practical solution. Why should this be more difficult to achieve than default, exit and economic mayhem?
Fine, you'll say that economic mayhem will not result by reintroducing the drama. But until I hear a plan that does address all these concerns I'll remain sceptical.
Any reason why Werner's proposal wouldn't work?
Magpie
re: If a rabbit is capable of that, maybe we are to
yabut, coyotes hunt in packs :/
Mike -
re: I am thinking of going back and I am going to vote Conservative across the board
So if you can't beat 'em you'll join 'em? nfw -shut up!
What we are seeing on this thread is exactly what TPTB aim at creating. They put up a solid wall and let everything bound off it, creating confusion and dissension among those throwing stuff against the wall about what to throw, how to throw it, when to throw, who should throw, when to stop throwing and either give up or join TPTB;
Syriza is not a monolithic party and it governs by coalition. It was given a confusing and even contradictory mandate that it has tried to work within.
Yanis had a role to play and he played. That game is played out. I see the changes that have been made as a strategic retreat.
Operations people know that its not necessary to win every battle to win a war. If fact, it's been shown against the "invincible" US on several occasions over the past decades that it's possible to loss all the battles as still win the war through attrition, making to costly politically to continue.
This is far from over, and the longer that Greece can hold out, the better the chances of wearing down political support for the wall and also building a strong base domestically.
As far as solutions go, the real problem that Greece faces is the structure of Greek society in which the wealthy have run the show and made of with the booty. That's the real issue that needs to be confronted and Syriza is well aware of this. It doesn't matter whether Greece stay in the EZ or leaves if this is not addressed.
This is more a political game now, as the players all realize. It would be simple to to solve this economically, as YV and other people, including people here have pointed out.
There's a difference between knowing what to do and being able to do it, and that's what counts in a political game. The generals can have the best strategy in the world, and even overwhelmingly superior force, but if they can't implement it, it's worthless.
Vietnamese General Giap had a much weaker force against both the French and the US, and he defeated and humiliated both with a better strategy that he could make work — twice. The Russians did the same thing with Napoleon and Hitler.
But how could Greece practically reintroduce the drachma without the country imploding?
The question is bizarre. Why would the country implode? Varoufakis has arguments that it would. They make no sense, as Warren Mosler has pointed out.
As far as I can tell, Varoufakis wants to restructure the "debt", end the austerity, get the economy growing and stay within the EZ. It may or may not be the best solution, but it is at least a practical solution.
MMTers have agreed with Varoufakis that this, the "good Euro" is the best solution, for Greece and the rest of the EU, and I agree too.
Why should this be more difficult to achieve than default, exit and economic mayhem?
Because it requires the cooperation of the rest of the Eurozone. They don't want to cooperate.
Greece owes a debt. But its creditors prevent Greece from repaying the debt, showing it is not about debt, but about humiliating and degrading an "inferior". The problem that dwarfs everything else is that the oppressed internalize belief in their own inferiority, and Varoufakis has to the extent that he makes unsound arguments that Greece cannot "do an Argentina".
Fine, you'll say that economic mayhem will not result by reintroducing the drama. But until I hear a plan that does address all these concerns I'll remain sceptical.
But you haven't stated any concerns, just said "mayhem", "danger" and "imploding". Nobody says that there won't be some pain, for a short time. Argentina saw a 5% decline after its default - for one quarter - and then quite strong growth for years.
It really is pretty simple. Right now, Greece is or was running a primary surplus and has basically balanced trade. So as Dean Baker says, the question is not how much financing Greece will get from Europe, but how much financing Greece will give Europe. Basically, Greece is bartering for its imports right now. No real reason for that to change in any way but for the good. It will get foreign exchange from its substantial tourism and shipping sectors and spend it on imports, particularly on necessary ones for the transition period. Greece can feed itself and doesn't need any food imports.
The robust growth would come from ending austerity, from not throwing away the enormous resources of its workforce, from domestic consumption and investment, from "import-substitution." That is what happened in Argentina, and since Greece has much more to export than Argentina had it should have even more success. And after the robust growth, resuming payments on the old debt becomes much easier to sustain.
The only rational proposal I've heard is Richard Werner's. He proposes that Greece inform its commercial banks that it expects/cajoles/demands/threatens these banks to credit the Greek state with as many euros as is necessary (John).
Werner is very good. Where did he write about that?
I proposed long ago that Portugal implement a similar scheme - based on commercial banks lending to the government and using TARGET2 to pay foreign debt with those newly created euros - to escape from austerity.
You may read it here:http://pt.slideshare.net/mobile/joseguilherme56/target2-and-rollover-of-portugals-public-debt-feb-1-2014-jose-g-q-ataide
Calgacus, the reasoning is that the mere rumour of a reintroduction of the drachma, whose value would be uncertain in the extreme, would trigger bank runs which would result in a systemic banking collapse. That seems a very likely scenario. That's why I asked whether freezing bank accounts, and heaven knows what else, may be necessary.
We agree that YV's proposals are far easier to implement than what the troika is proposing, and that it has nothing to do with anything other than looting Greece. So contrary to all the anti-YV comments, YV by definition is not the problem, neither is his replacement and neither is Syriza. The problem evidently is the troika. But how do we help Greece?
Argentina did not have to reintroduce the peso. Introducing a currency which many believe to be worthless will trigger bank runs.
Your argument about Greece being able to feed itself, its tourism, and its exports may be true, but that doesn't address the immediate problem of reintroducing a currency. So I ask again, what practical steps can be taken to limit a banking collapse in the event of reintroducing the drachma? Maybe it's a perfectly simple matter and involves no pain whatever and is a piece of cake. Fine, how do you do it?
Jose, for Werner click on the following (2.30 minutes in). https://www.youtube.com/watch?v=TQw9pydsyBg
"But how could Greece practically reintroduce the drachma without the country imploding?"
By just carrying on and letting the ECB refuse to clear the TARGET2 balances.
Then Greek Euros simply float wrt German Euros as a matter of design and the Greek central bank liquidates and refloats the banks.
The government then makes sure that any entity borrowed in German Euros is put into administration and refloats the entity with loans from the new Greek banks.
Sheet all the losses home to German Euro holders and get rid of as much external debt as possible. Then go to functional finance administration and a full Job Guarantee with rationing of imports to needed goods.
In other words people you really need to learn how to run a system in a crisis. A cool head, good strategy and sensible tactics is all you need.
As MMT shows all you can control is your domestic circulation and domestic production. So as a government you concentrate hard on making that work the best you can and making best use of the limited external resources at your disposal. Very similar to a war economy.
It's an approach that also defeats sanctions. So taking the successful parts of the Russian and Cuban experiences helps as well. Russia is stimulating its domestic industries and Cubans developed a fascinating make-do-and-mend attitude.
So I'm afraid the doom and gloom merchants are just that - throwing out Fear, Uncertainty and Doubt to prop up the status quo.
'Bank collapses' are nothing to worry about - except for bank bond and share holders. 'Foreign investment' is pure bullshit. 'Lack of government revenue' is irrelevant.
On the import side if the Europeans take their ball home you invite delegations from Russia, China and Argentina to bid for your business. They wouldn't be able to get on a plane to Athens quick enough.
Certainly I reckon I could manage a Greek exit from the Eurozone pretty well. It'd be an interesting system administration challenge.
John,
The new 'drachma' pops into existence automatically the moment the ECB refuses to clear a TARGET2 balance. (aka removing the peg).
Since notes and coins in the Eurozone are already marked with the NCB that issues them you already have 'drachma' notes in circulation.
The Eurozone was built to come apart easily - despite the rhetoric.
I've written about it before
Neil,
Thanks so much for that. I think I just about get the general gist of it.
So it would seem the fears of bank runs and systemic collapse are unjustified.
Nevertheless, are there any issues that would concern you with respect to reintroducing the drachma? What could go wrong?
The best studies on TARGET2 are still the three short papers written in 2010 and 2011 by Peter Garber of Deutsche Bank (who's studied the subject since its origins way back in the 90s) and John Whittaker at Lancaster University.
Here's Whittaker on the (unlikely) event of the ECB cutting off the Bank of Greece from the TARGET2 system:
If Greece’s access to TARGET2 credit were cut, the decision would be taken out of its hands and it would be forced out of the euro. In particular, without TARGET2 credit, it would be inconsistent for the BoG to continue with unrestricted issue of euro banknotes which could still be used for making cross-border payments, allowing the BoG to continue running up eurosystem debts (...) One is forced to envisage attempts by means of border controls to prevent banknotes leaving Greece until the BoG changed its issue in order to identify them as Greek (drachmas), or the rest of the eurozone countries changing the design of their euro notes in order to distinguish them from Greek euros.
In theory banking system failure could be well-managed if one has the necessary expertise on hand. One must question whether the Greek government retains sufficient institutional knowledge to make this work. Many had recommended taking U.S. banks into receivership in 2009 assuming the capability existed and civil servants were up to the task. I suspect winding down a single large bank would have been beyond their power.
@ Ben
Bill Black said that was just a bullshit excuse on the part of the TPTB to avoid the law. They even called the normal process of bank resolution called for under the law "nationalization" to further prejudice public opinion against following the law, in addition to sewing fear about doing it.
Where the problems would have arisen was in sorting out the banking from the non-banking aspects of the big banks, and that would have resulted in the non-banking financial sector taking a big hit for the bad debts. This was the real issue and TPTB used their power to protect class interests and shove the hurt onto "the little people."
Which just goes to show how much academics know about the system.
Greek Euro bank notes have a 'Y' in the serial number. I have one here.
So people in the rest of Europe would have to learn to stop accepting Y serial euro notes.
John:Calgacus, the reasoning is that the mere rumour of a reintroduction of the drachma, whose value would be uncertain in the extreme, would trigger bank runs which would result in a systemic banking collapse. That seems a very likely scenario.
Neil has answered this. Warren Mosler has too in various places, like his defense of Weisbrot, and also some old pieces at Naked Capitalism with Philip Pilkington that garnered praise from none other than Yanis Varoufakis.
Lapavitsas & Flassbeck are also worth reading on such matters and don't buy the FUD. And when the Greeks hire someone smart like Neilos Wilopoulos to run their banks, I would start exchanging my Dollars & Euros for Drachma / Y-serial notes!
Well, the academic in question is quite aware of the serial code feature in euro notes.
He wrote this in 2011:
... the banknotes issued by NCBs are indistinguishable. The serial code on each euro banknote contains a country letter: X refers to Germany and T to Ireland, for instance. However, this identifies the NCB that commissioned the printing of the notes, which may or may not be the NCB that issued them. This is because notes are distributed around the NCBs between printing and issue; also an NCB may reissue notes previously issued by other NCBs that it has redeemed. Notes drawn from a bank in a particular country may thus have any letter.
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