Greek finance minister resigns


#1

[Read the post]


#2

Here is the FUBAR situation, it becomes difficult due to propaganda and creative accounting to clearly evaluate where the line is between bank profit, wealth transfer from the ‘responsible’ EU nations(Germany and Nordics), and overly generous ‘vote for handouts’ social policy.
It used to be that European and every other country to spiral inflate/devalue their currency to run away domestically created and denominated debt.
But… It is like starting a nuclear war in the international economy, the first player who starts to devalue forces the other players to do so or be left behind, with the first devaluer getting the most value out of the action, it weakens the other devaluers devaluation like taking out opposing missiles in the silo.
Now as of old the PIIGS (Portugal, Ireland, Italy, Greece, Spain) are looked at as the irresponsible nations and peoples of Europe and they do have a post WW-II history(when history and application of law for some reason starts for most people and previous is a literary mythical period) of inflating, which they can’t do anymore with the Euro and ECB.
We are entering a period of instability perhaps akin or far exceeding the Arab spring and the bubble-bust-reinflates starting with the dot-com breakdown.
(I don’t like to write long posts so this is a-lotta-stuff compressed)


#3

The Greeks should default on their debt. Then Merkel can bail out the banks who lent to the Greeks in 2003-2004, rather than handing money to the Greeks for a month so they can return it to the foreign banks. There needs to be a write-down on Greek debt. What must happen is an evaluation of the expected losses incurred by the rest of Europe if Greece exits the Euro, as an estimate of the write-down that must be made to allow Greece to remain in the Euro. The young people suffering the consequences of austerity in Greece (vast unemployment, high taxes encouraging the black market to flourish) are not the ones who took on the debt a decade ago.


#4

Well said, much like the gigantic thermonuclear(as in cold war pork) F-U that the WW-II generation gave to the currently alive generations. Prosperity bought with the wealth of your grandchildren, like Greece(and America) where the old folks will not retire despite most people still having generous retirements which have begun to pay out, double dipping on the underemployed and transferring the value of their(the young’s) work.


#5

Varoufakis is my hero. He has huge cojones. He faced the UE economy ministers and said “I will not play your rigged game”, he was elected to guard Greeks against further austerity and used the ultimate tool to fight the troika’s authoritarianism: DEMOCRACY.

Eurogroup ministers hates him, that’s why I love him.


#6

He has no cojones. If he had, he’d stay and try to solve the mess he helped create. He said he would resign if the referendum would not go his way. The referendum went his way, yet he still resigns, basically disappointing one last time the people who voted his way and wanted to follow him.

Maybe going into negotiations with a “business is war” state of mind wasn’t the best idea. Unlike in free market talks between companies, in political negotiations you can’t simply get up and go and look for another negotiation partner if things don’t go your way. Game theory has its limitations in real life. He tried his hand at being a minister for five months, came up empty on all of his promises and now simply drops the mic and walks away, leaving the rest to shovel the pile of shit he left for them.

That’s not cojones.


#7

Apparently, the Greek government thought of Varoufakis as a liability, because of his confrontational style of negotiating. With the referendum, the Greek government made it clear it will not go along with the EU’s original plan. But now Greece’s government will have to negotiate something fast, and take at least some of the lemons, or be in serious trouble, and apparently Varoufakis did not show to be willing to go along with this. “The Moor has done his work, the moor may go now”.

The EU, and especially Germany, wouldn’t be too sad if Greece went bankrupt. The Euro would drop, which would benefit mainly Germany’s export oriented economy. Greek businesses would go bust on a vast scale, being dried out by their banks - unemployment would soar, which would then lead to an oversupply of cheap labour in the EU. As EU citizens, many highly skilled Greece people would be “free” to move to countries like Germany, leading to a drop of labour costs there, compensating for the weak Euro. German and international corporations could buy up large chunks of Greece’s public sector and private economy for knock-down prices. And Deutsche Bank & their cronies could suck out the sad remains of the Greece’s national economy for decades to come.

I’m from Germany, and I think it’s a bloody shame, it’s imperialism and extortion on a national level. I think the EU, the IMF, the German government, the conservative media and yellow press fuelling resentments against the “lazy Greeks”, and last but not least the voters supporting this criminal racket should all eat shit and die.

IMF boss Christine Lagarde reportedly once made a public remark to the effect of Varoufakis not being a grown-up. Well, if being a grown up means being paid near a million dollars a year for sucking out whole countries to the bone, like her and her co-conspirators, and screw the people actually dying in that process, then I hope the world will get rid of a few grown-up politicians and functionaries and have more like Varoufakis.


#8

I don’t think that’s fair. The subtext of his announcement was that he was asked to resign by Tspiras - I suspect because he was hated by the Troika and it’ll make it easier to re-open negotiations without him. In other words, he’s played “bad cop” and his removal is now being offered as a very cheap “concession”.

Alternatively, he might have been sacked because he was useless. In any case, I don’t think it speaks to his balls or lack of same.


#9

Sure thing. Varoufakis had become a person with whom noone wanted to negotiate anymore. Replacing him could only improve the siatuation - especially after this farce of a referendum (which was about an offer that was no longer valid the moment the referendum was called for by Tsipras). Naturally both things will now be used as bargaining chips by Tsipras: “See, our people would not agree to this, we need a better offer” and “See, I even replaced that guy you become to hate so much”. Both are things of which a seasoned politician should be rather unimpressed by as both have no bearing on any substantial points in the negotiation.

Tsipras and Varoufakis were woefully unprepared to be in the positions they are in now. Biting the hand that feeds you (and in this case - kept you live the last five years) is unwise in any circumstance, but making enemies out of people like Dijsselblom, Schäuble and Lagarde was just a worse than useless show of bravado.


#10

This is exactly what UK eurosceptics said the Euro was going to do. By creating a single currency without a single government it has allowed financially irresponsible nations like Greece to use the North European credit card. Now they want to get out of paying the bill - and would like voters in the North European countries to carry the can for them. I can see why that’s appealing to the Greeks - but not why it’s appealing to the Germans etc etc. It is also exactly what the EU’s panel of independent economists said would happen, which they chose to ignore. Greece only got access to the credit card to begin with because they forged the economic requirements of euro membership (with the connivance of EU).

Those saying Merkel et al should bail them out fundamentally misunderstand the great public opposition in Germany and other nations to doing so. The silly populist stuff from Greece around WWII etc has only strengthened that mood - I suspect it is simply not doable, even leaving aside the issue of the message it would send to Portugal, Ireland etc. The alternative, dropping out of the Euro and back to the drachma is probably better for Europe (I suspect it’s largely priced in by the markets already), but it will be dreadful for Greece and for the Greek people. Sadly some will see this as the price they have to pay.

There’s no easy fix to this - and sadly the pretense from Syriza that there is, coupled with an overly antagonistic negotiating style, has done nothing to improve their position. I expect them to drop out of the Euro, with very significant local consequences.


#11

it would take far too much time to explain who created the mess (hint: the players who brought Greece into the Euro) but Varoufakis had no hand in creating it!


#12

Clarification: I meant the current negotiation mess (alienated negotiation partners), not the economic mess Greece is in.

The economic mess was mainly created by several generations of Greeks for whom paying taxes was more of a suggestion, not a law and that combined with a bloated governmental body wasting the few taxes that did get paid. The country had been run into the ground for several decades. Getting into the Euro-zone (with it’s 230 billion in transfers paid to Greece) was the best way to hold off the collapse for a few more years, but ultimately it had to fail.


#13

I was made aware of a certain preference by some Eurogroup participants [eurozone finance ministers], and assorted ‘partners’, for my … ‘absence’ from its meetings

Not that I’m well versed in fiscal political machinations but isn’t this kind of behaviour a perfect example of the kind of pompous and impractical ideological inflexibility characterising the conservative agenda that led to this mess?

Will they continue to stick their fingers in their ears, enabled by the support of their home political-base, until they run Greece out of Europe and into the waiting arms of Russia?

From this layman’s perspective, it seems like the same incredibly short-sighted bullshit that always seems to flow from conservative ideologues.


#14

Oh, so the popular will in one country has to be “fundamentally understood”, but the popular will of another country is clearly “populist”. Nice game.

A credit card used to buy European goods and weapons, making Northern Europe irresponsibly richer (Germany is running surpluses too high for the European parameters, but who cares, right?). Which is why they were issued that card in the first place, even though they all knew it would be abused.

Oh yes there is: knocking on the door of some of the businesses that got richer by this merry business. But that would hurt people who shouldn’t be touched, right?


#15

… was the natural thing to do for anyone who understand anything about macroeconomics. Lagarde (a lawyer) is now despised even by her own analysts, since she’s clearly not serving the IMF but rather her right-wing French friends who catapulted her where she is now. Schäuble’s and Dijsselblom’s CV are ridiculous compared to Varoufakis’ when it comes to economic studies. Which is why they can’t be in the same room: he talks a language they don’t understand. That goes the same for most other European leaders btw: every time he proposed something, they had to adjourn so that they could let them be interpreted by their little helpers, without whom they simply could not grasp anything.


#16

It would be nice to leave the banks to eat their bad debts, but unfortunately the banks that made the stupid loans to Greece were bailed out about 4 years ago. Now it’s the governments that stupidly bailed out the banks that stupidly lent to Greece that get to eat it along with Greece. Unfortunately (for Greece anyway) the bail-out governments also control this process, and appear to be a lot more interested in making Greece an example to the other, larger, countries in the euro to whom the banks also made stupid loans than in reducing the impact on Greek kids.

Well played UK, Sweden, Denmark (The wealthy EU, non-Euro countries).


#17

If by that you mean that Greece should enforce its tax laws, I completely agree.


#18

I was reading something this weekend which broke down the ‘aid’ that Greece has received from the EU in this crisis. I think 60% of it went straight into the pockets of pre-crisis lenders. And another 20ish% was mostly a pass-through to lenders (but had some effect in supporting post-crisis greek finance). Only 8% or something was direct aid to greek people.


#19

Sure, as well as Germany and France asking their banks for some of that ill-gotten money to be returned.

Besides, to enforce tax laws you need money to pay your enforcers. This government (run by a party who has never been in power before, and hence does not have any real responsibility in the corruption that came before) was starved of credit by the same people who were also asking them to “collect money”. Note also how the breakdown in negotiation happened not on issues like “efforts to reduce corruption and collect more tax” (something Syriza actually promised during elections in very clear terms, unlike its competitors), but on welfare cuts. Because everyone know you will pay your taxes more happily if you’re starving, right?


#20

Now that’s an interesting approach. If nothing agreed to by a previous government is binding upon a successor government, parliamentary politics will start getting very interesting indeed.

Clearly, Greece is going to have to get out of the euro and go it alone. I wish her success in doing so.