11 ms·

The defiant stand by Yanis Varoufakis in the E.U. economic negotiations

43 points by grey-area 11y ago

tomjlodeen 11y ago
he's gay
lotsofmangos 11y ago
Austerity politics is bonkers. When there is a recession, the state is the entity that can still borrow and lend at reasonable rates. The money will still be borrowed, but with the state pulling back, it is borrowed at rates that would make a loan-shark blush.
- gadders 11y ago
  That's strange, because it's working fine in the UK.
  - jwdunne 11y ago
    Whhy do you think it's a success in the UK? There are many that don't think it's working at all. I'm not criticising your position, I'm just intensely curious.
    - ZeroGravitas 11y ago
      It's not. The government sharply cut when they got into power, then eased off a bit so that we got a tiny amount of growth to coincide with the election, now they're going to cut more again. So success if you're a neo-con distaster capitalist, failure for everyone else.
      - tjradcliffe 11y ago
        Your account of UK economic growth is not correct: http://www.bbc.com/news/business-32493745 http://www.bbc.com/news/business-32493745 Economic growth in the UK was about 0.5% quarterly for all of 2013 and 2014, and actually dropped to one of the lowest rates in the past two years in the quarter before the election. So unless you broaden "coincide" to mean "the two years preceding an election", or almost half the currently fixed term of Parliament it is not posisble to sustain the claim you make. And if governments can reliably provide economic expansion over two years it isn't clear why they wouldn't do so all the time. The social construction of "neo-cons" and "distaster capitalists" as the hated Other by the Left cannot mask the underlying objective reality that austerity policies have not been anything like the disaster that was confidently predicted, and may have even done some good, although I'm sure the proper economic analysis of the effect of these policies is a good deal more nuanced than the simple post hoc ergo propter hoc claim that pundits will be making, although the pundits on the Right do have the slight advantage of not having to actually make up facts to support their view in this case. EDIT: in an equally contrarian reply to another comment above I did some digging into government expenditures in the UK and your claim fails on that basis as well. Government expenditures are mostly up between 2008 and 2014 inclusive.
      - gadders 11y ago
        So all those people that voted for the policy to continue two weeks ago are neo-con disaster capitalists? I never know there were that many of them.
    - moomin 11y ago
      Indeed, the UK economy is turning around, but it's not clear that's the result of the austerity politics or just the underlying strength of the UK. And net immigration is down, which is a sign that other countries are becoming comparatively more attractive. Finally, George Osborne has discovered the same thing that dogged Gordon Brown: tax receipts are stubbornly failing to rise in line with economic growth.
      - evgen 11y ago
        Actually, today's report has not immigration up to within 2000 of the highest ever recorded. I guess those who vote with their feet disagrees with your assessment.
        moomin 11y ago
        You're right, it's changed a lot in the last year.
    - akhatri_aus 11y ago
      Because the UK went on heavy on cutting its budget, whereas the US went heavy on increasing expenditure (Fiscal keynesian style). The way the UK did it should have dragged them into recession but the UK employment rate improved to under 6% (in spite of the sensationalised immigration 'issue') and the economic growth rate is doing pretty good (on a relative basis to the other G* countries). I don't want to get into the contentious political issues involved but I'll say this too: There may be some argument to the loss involved due the budget cuts but on the typical economic numbers its not too bad/quite good considering austerity was used. 1. http://www.tradingeconomics.com/united-kingdom/unemployment-rate http://www.tradingeconomics.com/united-kingdom/unemployment-...
      - tjradcliffe 11y ago
        I've seen this claim as well, but the data don't seem to support it. UK spending for all levels of government 2008-2014 in constant (2005) pounds (data from: http://www.ukpublicspending.co.uk/download_multi_year_2008_2015UKk_10c1li111mcn_F0t http://www.ukpublicspending.co.uk/download_multi_year_2008_2...): Year GDP Pop Spending £ bln 2005 2008 MW gdp 61.548 582.23 2009 MW gdp 61.904 623.50 2010 1564.9 62.262 697.65 2011 1600.2 62.649 699.89 2012 1621.6 63.067 692.43 2013 1632 63.488 661.32 2014 1665.6 63.912 525.22 There's a huge drop 2013-2014, but before that the spend-up was pretty considerable, and economic growth has been solid since the start of 2013, so if this be "austerity", make the most of it! EDIT: the drop in 2014 is due to local government not being added in. If I look at just "Central Government" from the same source: 2008 MW gdp 61.548 427.07 2009 MW gdp 61.904 458.29 2010 1564.9 62.262 516.99 2011 1600.2 62.649 517.16 2012 1621.6 63.067 522.42 2013 1632 63.488 496.97 2014 1665.6 63.912 525.22 Again, hard to claim much "austerity" in these data.
        akhatri_aus 11y ago
        Austerity can't be looked at only from the spending point of view, especially since it carries with it an element of affordability. Its also about looking at taxation receipts. On overall the deficit between the two has been decreasing which is where the 'austerity' terminology is used. The comparison comes in handy where alot of Europe has been going through this (in spite of decreasing or low economic growth) whereas the US increased its deficits too. What I mean to say is austerity is tied more to the affordability as opposed to the absolute dollar amounts. Deficits Year Amount 2009 156.3 2010 148.6 2011 120.6 2012 99.5
    - gadders 11y ago
      The economy is growing again, unemployment is down, and most people just voted for the policy to continue.
  - jonnycowboy 11y ago
    Austerity has already been debunked as being the best way to economic advancement / recovery, even the IMF agrees: http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-debunked_n_3361299.html http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-deb...
  - discodave 11y ago
    That which is claimed without evidence, can be dismissed without evidence.
- danmaz74 11y ago
  The whole problem with Greece is that the state CAN'T borrow on the market at reasonable rates. That's why they asked (and received) over €200BN in credits from the other EU countries, plus I don't remember how much from the IMF.
  - msellout 11y ago
    If they cannot borrow Euros, they will have two options: default on promises to Greeks (pensions, etc.) or leave the Eurozone and return to their own currency which they can "borrow" from hypothetical wealthier future taxpayers.
    - ZeroGravitas 11y ago
      Implementing dubious political experiments being forced on them as a condition of loans could also be described as a "default on promises to Greeks".
  - antman 11y ago
    The problem is that it the Troika plan half-defaulted Greece in 2010. That half-way policy made Greece lose credibility with private institutions without substantially decreasing its debt.
ExpiredLink 11y ago
The Greek elected confrontation. They got it.
- coldtea 11y ago
  No, they had one-sided confrontation, derision and bullying from the other side for several years. [1] The Greeks merely elected a government to stand up to it. [1] That side of the German stance has been thoroughly discussed even in the Economist, Bloomberg, Financial Times, NYT, etc (as well as the huge financial gains Germany got from the "assistance" they provided).
  - cjensen 11y ago
    Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan.
    - hammerandtongs 11y ago
      Your moralistic tone might be appropriate in a completely simplistic loan from one villager to another villager. In the context of the very high complexity of the actual international system we have it doesn't really work or provide any explanatory power.
      - cjensen 11y ago
        Did you mean to address your comment to the original comment instead of mine? It was the grandparent comment who used the phrase "bullying" to imply immorality. My comment only claims that even if you assume morality in international lending, the particular phrase is not apt.
    - phreeza 11y ago
      'at fault' may be too strong, but Germany surely benefited in the zero-sum game that resulted from the Euro fixing exchange rates within the eurozone: in the old system, Greece could have (and did) increase the exchange rate wrt the Mark to boost exports and keep the economy running. The inability to do this benefited Germany, at the cost of Greece.
Phlow 11y ago
I've heard of 1 tax dodger being forced to pay in Greece, but why haven't I heard about other measure to get some of the money back from the previous corrupt government? Surely there's more that can be done there.
atmosx 11y ago
Hm, I never thought I would come to admire a Greek politician. He is really superb. What the article failed to notice is the EXTREMELY deep domain knowledge this guy has. He literally blows everyone out of the water! In his last interview (on Monday 18 May 2015, at tv show 'enikos') he made a quick reference to BTC stating that it's not going to work 'very well' as a currency but the underlying technology was amazing and sure as hell will heave many real-world applications in the future. He was accused of talking 'macro-economics' at the Eugogroup, as if the 'Eurogroup' is the 'kindergarten' where people are not supposed to have basic macro-economic knowledge. Really amazing guy. I'm proud he is my FinMin. UPDATE/OFF-TOPIC: I see many comments that are disheartening for me as a Greek on a national level. However, I also noticed a lack of basic economic concepts from large parts of the HN crowd. I'm talking about those who take the time to comment. I noticed the same thing in bitcoin-related post discussions. Ultimately I stopped commenting on the subject because there were many people who clearly understood the theory around the protocol bad had really a very narrow (if any) understanding of how macro-economics, currencies, surpluses and public finances (generally speaking) work. This is something that puzzles me and I can't find any reasonable explanation. In other domains, like biology, molecular biology, medicine - domains which I'm able to understand at some level because I'm a pharmacist - the HN commentators seem to be extremely prepared. I wonder if I'm the only one who noticed this (for the specific topic of economics at least) or there are others who think that when talking 'economics' or some other topic, the HN crowd is, on average, not well prepared and the comments are not up to the expected level? Sorry for the huge comment, have a nice day everyone :-)
- graeme 11y ago
  For your question about HN comments and Econ: If you are discussing molecular biology, it's easy to tell that you don't know anything. Not that no one makes mistakes about the subject, but at least there is a sizeable group of people prepared to say "I know nothing about that" Economics is something that everyone participates in. This increases the ease of having an opinion about it, and decreases the number of people willing to say "I know nothing about that" As for Bitcoin, that may be partly due to the halo effect. Bitcoin has an effective technical base. That can lead us to assume that all aspects of Bitcoin are effective. (Note that this is not an argument against Bitcoin. Instead it's an explanation for why people might overestimate it.)
riffraff 11y ago
sadly, Varoufakis combines alternative policy views with a personality a bit too over the lines. I think a more "traditional looking" minister might have produced more results, as Greece work seems to suffer from his "big personality". On the other hand, this[0] wouldn't exist without him. [0] the funniest video on an economic minster I've ever seen https://www.youtube.com/watch?v=Afl9WFGJE0M https://www.youtube.com/watch?v=Afl9WFGJE0M
- icebraining 11y ago
  I believe that's why they replaced him at the negotiations with the lenders.
msabalau 11y ago
So, if one believes that Varoufakis is right, but also believe that the European Commission and the European Central Bank are idiots, empowered by the EU democratic deficit, does anyone have any ideas how to best invest to bet against the EU?
- throwaway12309 11y ago
  buy dollars and wait until the euro explode? It netted me quite a bit this last year
  - meric 11y ago
    If dollars are overbought, gold is an option. A couple of my gold mining stocks more than doubled during the dollar's advance in the past few months. Gold price in USD steady, USD rising, foreign currency and mining costs fall, soaring profit margins.
cyphunk 11y ago
Historically Europe was a region constantly reminded of people power. The Greek crises is the first "European" action in the Eurozone since the foundation of the European Union. Like everyone else I curse under my breath when train drivers on strike make me late to something (german train drivers just closed one of their longest strikes of recent memory). But I'm also grateful that these actions happen as they remind everyone including myself of, well, power of the people, at some point other than the token 4 year vote.

43 points by grey-area 11y ago

he's gay

Austerity politics is bonkers. When there is a recession, the state is the entity that can still borrow and lend at reasonable rates. The money will still be borrowed, but with the state pulling back, it is borrowed at rates that would make a loan-shark blush.

gadders 11y ago
That's strange, because it's working fine in the UK.
- jwdunne 11y ago
  Whhy do you think it's a success in the UK? There are many that don't think it's working at all. I'm not criticising your position, I'm just intensely curious.
  - ZeroGravitas 11y ago
    It's not. The government sharply cut when they got into power, then eased off a bit so that we got a tiny amount of growth to coincide with the election, now they're going to cut more again. So success if you're a neo-con distaster capitalist, failure for everyone else.
    - tjradcliffe 11y ago
      Your account of UK economic growth is not correct: http://www.bbc.com/news/business-32493745 http://www.bbc.com/news/business-32493745 Economic growth in the UK was about 0.5% quarterly for all of 2013 and 2014, and actually dropped to one of the lowest rates in the past two years in the quarter before the election. So unless you broaden "coincide" to mean "the two years preceding an election", or almost half the currently fixed term of Parliament it is not posisble to sustain the claim you make. And if governments can reliably provide economic expansion over two years it isn't clear why they wouldn't do so all the time. The social construction of "neo-cons" and "distaster capitalists" as the hated Other by the Left cannot mask the underlying objective reality that austerity policies have not been anything like the disaster that was confidently predicted, and may have even done some good, although I'm sure the proper economic analysis of the effect of these policies is a good deal more nuanced than the simple post hoc ergo propter hoc claim that pundits will be making, although the pundits on the Right do have the slight advantage of not having to actually make up facts to support their view in this case. EDIT: in an equally contrarian reply to another comment above I did some digging into government expenditures in the UK and your claim fails on that basis as well. Government expenditures are mostly up between 2008 and 2014 inclusive.
    - gadders 11y ago
      So all those people that voted for the policy to continue two weeks ago are neo-con disaster capitalists? I never know there were that many of them.
  - moomin 11y ago
    Indeed, the UK economy is turning around, but it's not clear that's the result of the austerity politics or just the underlying strength of the UK. And net immigration is down, which is a sign that other countries are becoming comparatively more attractive. Finally, George Osborne has discovered the same thing that dogged Gordon Brown: tax receipts are stubbornly failing to rise in line with economic growth.
    - evgen 11y ago
      Actually, today's report has not immigration up to within 2000 of the highest ever recorded. I guess those who vote with their feet disagrees with your assessment.
      - moomin 11y ago
        You're right, it's changed a lot in the last year.
  - akhatri_aus 11y ago
    Because the UK went on heavy on cutting its budget, whereas the US went heavy on increasing expenditure (Fiscal keynesian style). The way the UK did it should have dragged them into recession but the UK employment rate improved to under 6% (in spite of the sensationalised immigration 'issue') and the economic growth rate is doing pretty good (on a relative basis to the other G* countries). I don't want to get into the contentious political issues involved but I'll say this too: There may be some argument to the loss involved due the budget cuts but on the typical economic numbers its not too bad/quite good considering austerity was used. 1. http://www.tradingeconomics.com/united-kingdom/unemployment-rate http://www.tradingeconomics.com/united-kingdom/unemployment-...
    - tjradcliffe 11y ago
      I've seen this claim as well, but the data don't seem to support it. UK spending for all levels of government 2008-2014 in constant (2005) pounds (data from: http://www.ukpublicspending.co.uk/download_multi_year_2008_2015UKk_10c1li111mcn_F0t http://www.ukpublicspending.co.uk/download_multi_year_2008_2...): Year GDP Pop Spending £ bln 2005 2008 MW gdp 61.548 582.23 2009 MW gdp 61.904 623.50 2010 1564.9 62.262 697.65 2011 1600.2 62.649 699.89 2012 1621.6 63.067 692.43 2013 1632 63.488 661.32 2014 1665.6 63.912 525.22 There's a huge drop 2013-2014, but before that the spend-up was pretty considerable, and economic growth has been solid since the start of 2013, so if this be "austerity", make the most of it! EDIT: the drop in 2014 is due to local government not being added in. If I look at just "Central Government" from the same source: 2008 MW gdp 61.548 427.07 2009 MW gdp 61.904 458.29 2010 1564.9 62.262 516.99 2011 1600.2 62.649 517.16 2012 1621.6 63.067 522.42 2013 1632 63.488 496.97 2014 1665.6 63.912 525.22 Again, hard to claim much "austerity" in these data.
      - akhatri_aus 11y ago
        Austerity can't be looked at only from the spending point of view, especially since it carries with it an element of affordability. Its also about looking at taxation receipts. On overall the deficit between the two has been decreasing which is where the 'austerity' terminology is used. The comparison comes in handy where alot of Europe has been going through this (in spite of decreasing or low economic growth) whereas the US increased its deficits too. What I mean to say is austerity is tied more to the affordability as opposed to the absolute dollar amounts. Deficits Year Amount 2009 156.3 2010 148.6 2011 120.6 2012 99.5
  - gadders 11y ago
    The economy is growing again, unemployment is down, and most people just voted for the policy to continue.
- jonnycowboy 11y ago
  Austerity has already been debunked as being the best way to economic advancement / recovery, even the IMF agrees: http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-debunked_n_3361299.html http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-deb...
- discodave 11y ago
  That which is claimed without evidence, can be dismissed without evidence.
danmaz74 11y ago
The whole problem with Greece is that the state CAN'T borrow on the market at reasonable rates. That's why they asked (and received) over €200BN in credits from the other EU countries, plus I don't remember how much from the IMF.
- msellout 11y ago
  If they cannot borrow Euros, they will have two options: default on promises to Greeks (pensions, etc.) or leave the Eurozone and return to their own currency which they can "borrow" from hypothetical wealthier future taxpayers.
  - ZeroGravitas 11y ago
    Implementing dubious political experiments being forced on them as a condition of loans could also be described as a "default on promises to Greeks".
- antman 11y ago
  The problem is that it the Troika plan half-defaulted Greece in 2010. That half-way policy made Greece lose credibility with private institutions without substantially decreasing its debt.

ExpiredLink 11y ago

The Greek elected confrontation. They got it.

coldtea 11y ago
No, they had one-sided confrontation, derision and bullying from the other side for several years. [1] The Greeks merely elected a government to stand up to it. [1] That side of the German stance has been thoroughly discussed even in the Economist, Bloomberg, Financial Times, NYT, etc (as well as the huge financial gains Germany got from the "assistance" they provided).
- cjensen 11y ago
  Voluntarily accepting conditions attached to a loan is not bullying, particularly as the countries giving the loan are in no way at fault for Greece's dire need for a loan.
  - hammerandtongs 11y ago
    Your moralistic tone might be appropriate in a completely simplistic loan from one villager to another villager. In the context of the very high complexity of the actual international system we have it doesn't really work or provide any explanatory power.
    - cjensen 11y ago
      Did you mean to address your comment to the original comment instead of mine? It was the grandparent comment who used the phrase "bullying" to imply immorality. My comment only claims that even if you assume morality in international lending, the particular phrase is not apt.
  - phreeza 11y ago
    'at fault' may be too strong, but Germany surely benefited in the zero-sum game that resulted from the Euro fixing exchange rates within the eurozone: in the old system, Greece could have (and did) increase the exchange rate wrt the Mark to boost exports and keep the economy running. The inability to do this benefited Germany, at the cost of Greece.

Phlow 11y ago

I've heard of 1 tax dodger being forced to pay in Greece, but why haven't I heard about other measure to get some of the money back from the previous corrupt government? Surely there's more that can be done there.

atmosx 11y ago

Hm, I never thought I would come to admire a Greek politician. He is really superb. What the article failed to notice is the EXTREMELY deep domain knowledge this guy has. He literally blows everyone out of the water! In his last interview (on Monday 18 May 2015, at tv show 'enikos') he made a quick reference to BTC stating that it's not going to work 'very well' as a currency but the underlying technology was amazing and sure as hell will heave many real-world applications in the future. He was accused of talking 'macro-economics' at the Eugogroup, as if the 'Eurogroup' is the 'kindergarten' where people are not supposed to have basic macro-economic knowledge. Really amazing guy. I'm proud he is my FinMin. UPDATE/OFF-TOPIC: I see many comments that are disheartening for me as a Greek on a national level. However, I also noticed a lack of basic economic concepts from large parts of the HN crowd. I'm talking about those who take the time to comment. I noticed the same thing in bitcoin-related post discussions. Ultimately I stopped commenting on the subject because there were many people who clearly understood the theory around the protocol bad had really a very narrow (if any) understanding of how macro-economics, currencies, surpluses and public finances (generally speaking) work. This is something that puzzles me and I can't find any reasonable explanation. In other domains, like biology, molecular biology, medicine - domains which I'm able to understand at some level because I'm a pharmacist - the HN commentators seem to be extremely prepared. I wonder if I'm the only one who noticed this (for the specific topic of economics at least) or there are others who think that when talking 'economics' or some other topic, the HN crowd is, on average, not well prepared and the comments are not up to the expected level? Sorry for the huge comment, have a nice day everyone :-)

graeme 11y ago
For your question about HN comments and Econ: If you are discussing molecular biology, it's easy to tell that you don't know anything. Not that no one makes mistakes about the subject, but at least there is a sizeable group of people prepared to say "I know nothing about that" Economics is something that everyone participates in. This increases the ease of having an opinion about it, and decreases the number of people willing to say "I know nothing about that" As for Bitcoin, that may be partly due to the halo effect. Bitcoin has an effective technical base. That can lead us to assume that all aspects of Bitcoin are effective. (Note that this is not an argument against Bitcoin. Instead it's an explanation for why people might overestimate it.)

riffraff 11y ago

sadly, Varoufakis combines alternative policy views with a personality a bit too over the lines. I think a more "traditional looking" minister might have produced more results, as Greece work seems to suffer from his "big personality". On the other hand, this[0] wouldn't exist without him. [0] the funniest video on an economic minster I've ever seen https://www.youtube.com/watch?v=Afl9WFGJE0M https://www.youtube.com/watch?v=Afl9WFGJE0M

icebraining 11y ago
I believe that's why they replaced him at the negotiations with the lenders.

msabalau 11y ago

So, if one believes that Varoufakis is right, but also believe that the European Commission and the European Central Bank are idiots, empowered by the EU democratic deficit, does anyone have any ideas how to best invest to bet against the EU?

throwaway12309 11y ago
buy dollars and wait until the euro explode? It netted me quite a bit this last year
- meric 11y ago
  If dollars are overbought, gold is an option. A couple of my gold mining stocks more than doubled during the dollar's advance in the past few months. Gold price in USD steady, USD rising, foreign currency and mining costs fall, soaring profit margins.

cyphunk 11y ago

Historically Europe was a region constantly reminded of people power. The Greek crises is the first "European" action in the Eurozone since the foundation of the European Union. Like everyone else I curse under my breath when train drivers on strike make me late to something (german train drivers just closed one of their longest strikes of recent memory). But I'm also grateful that these actions happen as they remind everyone including myself of, well, power of the people, at some point other than the token 4 year vote.