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While I agree with some of Varoufakis ideas (e.g. that Greece may be better of leaving the Euro, since internal devaluations are hard), he doesn't portray the o

While I agree with some of Varoufakis ideas (e.g. that Greece may be better of leaving the Euro, since internal devaluations are hard), he doesn't portray the other side objectively. Many of the suggested improvements are objectively sound, e.g. property taxes, tax collection in general, normalized VAT, reducing government corruption and red-tape, removing various monopolies, etc. Greece is the most corrupt country in the EU[1] and also one of the worst for doing business in general[2]. It also has one of the lowest levels of productivity. It's been ~5 years since the first bailout, yet Greece haven't made much progress. Many of the suggested improvements require a simple pen stroke by the parliament. No wonder Germans get tired bankrolling all of Greece. [1] http://www.ekathimerini.com/155963/article/ekathimerini/news/greece-seen-as-most-corrupt-country-in-eu-transparency-international-finds http://www.ekathimerini.com/155963/article/ekathimerini/news... [2] http://www.doingbusiness.org/data/exploreeconomies/greece#starting-a-business http://www.doingbusiness.org/data/exploreeconomies/greece#st...

junto 11y ago
To be fair, the vast majority of the bailouts have gone to paying back debts. Those debts were held with corporate German and foreign banks. And here is the kicker; Those debts are now held by the ECB, which, is not supposed to be a lender of last resort, but now has become one by default. The corporate banks are now safe and have extricated themselves from the risky position they found themselves in 5 years ago. The ECB doesn't care either way. Schauble secretly welcomes a Grexit, because without external support Greece can't move to a new Drachma. The logistics are just impossible by themselves. Schauble wants the rest of the Eurozone to witness what will happen when you exit the Euro without support (it won't be pretty). Hi there France btw. You still like you early retirement, large civil service employment, string unions and social state? Well, you're number one on their hit list.
- calibraxis 11y ago
  Yes, Varoufakis mentioned: "Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone." (http://yanisvaroufakis.eu/2015/07/11/behind-germanys-refusal-to-grant-greece-debt-relief-op-ed-in-the-guardian/ http://yanisvaroufakis.eu/2015/07/11/behind-germanys-refusal...) A bit like nuking Japan was the first shot in US's Cold War against USSR. (But fortunately not as immediately violent.)
  - agumonkey 11y ago
    I find it frightening that someone in their government tries to pull such strings to enforce economic views.
  - taliesinb 11y ago
    The analogy with actual war is I think far less unreasonable that it at first sounds. I-don't-know-who said "The First World War was fought with guns, the Second World War was fought with tanks, the Third World War will be fought with banks." I don't mean to say that this is any kind of tinderbox situation. But it is crystal clear to me that it's at the very least a first-world country being forced by a hegemon into neo-colonial vassal-hood/debt bondage, something that is quite shocking to see, especially when there are no standing armies in sight. And the violence is real, in that Greece is suffering a humanitarian crisis that will only deepen. Actual people will die prematurely, and others' lives will be wrecked, for Schaeuble's example to pay off, as much as newspapers like to abstract this fact behind phrases like "deep pension cuts".
- cuillevel3 11y ago
  > To be fair, the vast majority of the bailouts have gone to paying back debts. Those debts were held with corporate German and foreign banks. Let me cite from another economist, Hans-Werner Sinn: "At that time (late March 2010), French banks had a 53 billion euro exposure to private and public instances in Greece, the German ones a 33-billion euro exposure, the US 10 billion, and the UK 9 billion. [....] At the end of March 2015, the sum of current account deficits accumulated since early 2008 was 108 billion euros, equivalent to one-third of the multilateral and intergovernmental loans provided to Greece, which amounted to 325 billion euros. Two-thirds of the public credit was thus apparently used to finance capital flight and one-third to finance the current account deficit – ultimately the living standard that could no longer be financed with the income of the Greek citizenry. Thus, over the entire crisis period it can hardly be argued that barely 10 percent of the public credit benefited the Greek people, as Finance Minister Varoufakis does. Apart from the above, Greek debtors benefited from the fact that the international community helped them meet their obligations towards foreign creditors, and also made it possible for them to bring their wealth out of the country."
- patrickaljord 11y ago
  > Hi there France btw. You still like you early retirement, large civil service employment, string unions and social state? Well, you're number one on their hit list. Hi there, I'm from France and I would love to see all of the above gone. Any idea when this will happen?
agumonkey 11y ago
> <?> doesn't portray the other side objectively That's the hardest part of this whole issue, everyone say something different. Greeks are ..., Germans are ..., Banks are ... As a non educated (in that matter), it's impossible to understand anything without the feeling you end up as a fanboy for some party.
- taliesinb 11y ago
  > As a non educated (in that matter), it's impossible to understand anything without the feeling you end up as a fanboy for some party. Well, if you care what the outcome is and you decide you want to see one party prevail, that doesn't turn you into a fanboy. Because maybe there really are good guys and bad guys, or at least massively powerful overdogs who will crush entire underdog nations for realpolitikal advantage. Look, Greece is fucked. Tsipras failed. Varoufakis failed. I like them, but they couldn't outwit Germany. The screwed up. They'll be remembered for that, just as Merkel will be remembered for destroying the founding principles of the EU.
  - agumonkey 11y ago
    Actually I want to avoid having to think of it as bad guys vs good guys. And information are mostly (unless you're an insider) <greek|german> guy revealing the truth about the other. I'd love to have a real map of the economic relationships between banks, investors, governments.
taliesinb 11y ago
> Many of the suggested improvements are objectively sound, e.g. property taxes, tax collection in general, normalized VAT, reducing government corruption and red-tape, removing various monopolies, etc. Those have been proposed by Syriza itself, but that hardly matters because the disagreement is not actually about economic policy, at all. The salient features of the Eurogroup deal are things like: "give us $50 billion of your airports, bridges, government land, tourist attractions, etc, but at today's Depression-era prices". Shock doctrine stuff. And: "take far more severe austerity, for the chance to negotiate another bailout you need to pay us back for the previous bailout, without debt relief being on the table, despite your population rejecting this option in the very recent past, despite the IMF concluding the current debt load is clearly massively unsustainable". Make that sound reasonable, please. > It's been ~5 years since the first bailout, yet Greece haven't made much progress. Could it be that the collapse of 25% of Greek GDP under the last 5 years of austerity demonstrates that more austerity isn't the answer? Some economist wise cracked that prescribing austerity for a country in a depression† is like trying to cure a sick patient with regular beatings. † the worst depression of a modern state since the 1930s, incidentally. > No wonder Germans get tired bankrolling all of Greece. Hah, those generous German tax-payers. But wait, aren't they really bailing out German and French banks, at least indirectly, after the ECB gobbled up all that toxic peripheral debt that is was the predictable outcome of wild trade imbalances in an ill-thought-out monetary union? What fraction of Greek bailout money was just recycled into paying back the IMF and ECB? Do you know? Do you know how loan sharks operate? Here's an alternate perspective to jar you out of your slumber: https://foreignpolicy.com/2015/02/20/its-time-to-kick-germany-out-of-the-eurozone/ https://foreignpolicy.com/2015/02/20/its-time-to-kick-german...

junto 11y ago

To be fair, the vast majority of the bailouts have gone to paying back debts. Those debts were held with corporate German and foreign banks. And here is the kicker; Those debts are now held by the ECB, which, is not supposed to be a lender of last resort, but now has become one by default. The corporate banks are now safe and have extricated themselves from the risky position they found themselves in 5 years ago. The ECB doesn't care either way. Schauble secretly welcomes a Grexit, because without external support Greece can't move to a new Drachma. The logistics are just impossible by themselves. Schauble wants the rest of the Eurozone to witness what will happen when you exit the Euro without support (it won't be pretty). Hi there France btw. You still like you early retirement, large civil service employment, string unions and social state? Well, you're number one on their hit list.

calibraxis 11y ago
Yes, Varoufakis mentioned: "Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone." (http://yanisvaroufakis.eu/2015/07/11/behind-germanys-refusal-to-grant-greece-debt-relief-op-ed-in-the-guardian/ http://yanisvaroufakis.eu/2015/07/11/behind-germanys-refusal...) A bit like nuking Japan was the first shot in US's Cold War against USSR. (But fortunately not as immediately violent.)
- agumonkey 11y ago
  I find it frightening that someone in their government tries to pull such strings to enforce economic views.
- taliesinb 11y ago
  The analogy with actual war is I think far less unreasonable that it at first sounds. I-don't-know-who said "The First World War was fought with guns, the Second World War was fought with tanks, the Third World War will be fought with banks." I don't mean to say that this is any kind of tinderbox situation. But it is crystal clear to me that it's at the very least a first-world country being forced by a hegemon into neo-colonial vassal-hood/debt bondage, something that is quite shocking to see, especially when there are no standing armies in sight. And the violence is real, in that Greece is suffering a humanitarian crisis that will only deepen. Actual people will die prematurely, and others' lives will be wrecked, for Schaeuble's example to pay off, as much as newspapers like to abstract this fact behind phrases like "deep pension cuts".
cuillevel3 11y ago
> To be fair, the vast majority of the bailouts have gone to paying back debts. Those debts were held with corporate German and foreign banks. Let me cite from another economist, Hans-Werner Sinn: "At that time (late March 2010), French banks had a 53 billion euro exposure to private and public instances in Greece, the German ones a 33-billion euro exposure, the US 10 billion, and the UK 9 billion. [....] At the end of March 2015, the sum of current account deficits accumulated since early 2008 was 108 billion euros, equivalent to one-third of the multilateral and intergovernmental loans provided to Greece, which amounted to 325 billion euros. Two-thirds of the public credit was thus apparently used to finance capital flight and one-third to finance the current account deficit – ultimately the living standard that could no longer be financed with the income of the Greek citizenry. Thus, over the entire crisis period it can hardly be argued that barely 10 percent of the public credit benefited the Greek people, as Finance Minister Varoufakis does. Apart from the above, Greek debtors benefited from the fact that the international community helped them meet their obligations towards foreign creditors, and also made it possible for them to bring their wealth out of the country."
patrickaljord 11y ago
> Hi there France btw. You still like you early retirement, large civil service employment, string unions and social state? Well, you're number one on their hit list. Hi there, I'm from France and I would love to see all of the above gone. Any idea when this will happen?

agumonkey 11y ago

> <?> doesn't portray the other side objectively That's the hardest part of this whole issue, everyone say something different. Greeks are ..., Germans are ..., Banks are ... As a non educated (in that matter), it's impossible to understand anything without the feeling you end up as a fanboy for some party.

taliesinb 11y ago
> As a non educated (in that matter), it's impossible to understand anything without the feeling you end up as a fanboy for some party. Well, if you care what the outcome is and you decide you want to see one party prevail, that doesn't turn you into a fanboy. Because maybe there really are good guys and bad guys, or at least massively powerful overdogs who will crush entire underdog nations for realpolitikal advantage. Look, Greece is fucked. Tsipras failed. Varoufakis failed. I like them, but they couldn't outwit Germany. The screwed up. They'll be remembered for that, just as Merkel will be remembered for destroying the founding principles of the EU.
- agumonkey 11y ago
  Actually I want to avoid having to think of it as bad guys vs good guys. And information are mostly (unless you're an insider) <greek|german> guy revealing the truth about the other. I'd love to have a real map of the economic relationships between banks, investors, governments.

taliesinb 11y ago

> Many of the suggested improvements are objectively sound, e.g. property taxes, tax collection in general, normalized VAT, reducing government corruption and red-tape, removing various monopolies, etc. Those have been proposed by Syriza itself, but that hardly matters because the disagreement is not actually about economic policy, at all. The salient features of the Eurogroup deal are things like: "give us $50 billion of your airports, bridges, government land, tourist attractions, etc, but at today's Depression-era prices". Shock doctrine stuff. And: "take far more severe austerity, for the chance to negotiate another bailout you need to pay us back for the previous bailout, without debt relief being on the table, despite your population rejecting this option in the very recent past, despite the IMF concluding the current debt load is clearly massively unsustainable". Make that sound reasonable, please. > It's been ~5 years since the first bailout, yet Greece haven't made much progress. Could it be that the collapse of 25% of Greek GDP under the last 5 years of austerity demonstrates that more austerity isn't the answer? Some economist wise cracked that prescribing austerity for a country in a depression† is like trying to cure a sick patient with regular beatings. † the worst depression of a modern state since the 1930s, incidentally. > No wonder Germans get tired bankrolling all of Greece. Hah, those generous German tax-payers. But wait, aren't they really bailing out German and French banks, at least indirectly, after the ECB gobbled up all that toxic peripheral debt that is was the predictable outcome of wild trade imbalances in an ill-thought-out monetary union? What fraction of Greek bailout money was just recycled into paying back the IMF and ECB? Do you know? Do you know how loan sharks operate? Here's an alternate perspective to jar you out of your slumber: https://foreignpolicy.com/2015/02/20/its-time-to-kick-germany-out-of-the-eurozone/ https://foreignpolicy.com/2015/02/20/its-time-to-kick-german...