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Varoufakis and the memorandum

by Migeru Fri Feb 13th, 2015 at 04:32:14 AM EST

Cross-posted from The Court Astrologer

Now that the Greek cliffhanger has moved on to whether Tsipras will give in to Merkel or not, let me go back to the debate over the past two weeks on Yanis Varoufakis' position on the Troika. The favourite claims of the Very Serious People were that the Greek government was making different statements abroad from what it said in Greece, that it was flip-flopping on their acceptance of the "program", or that Varoufakis in particular was one day saying he rejected the memorandum in toto and the next that it accepted 70% of the reforms, as if that were a contradiction.

In fact, to understand the Greek position one need only pay attention to what Varoufakis (mostly) has been saying, as opposed to what the press said he has been saying, and not assume that just because Syriza are radical leftists they must be talking nonsense. With this in mind, let's take a look at Varoufakis' second address to the Greek Parliament on February 10, during the debates preceding the new government's confidence vote. It is not hard to see that Varoufakis' position can be summarised as follows:

  • The "memorandum" is a "pyramid scheme" whereby an insolvent Greece is made to indebt itself further in order to pay its creditors on condition that it shrink its income.
  • The "program" is a "fig leaf" intended to cover up the fraudulent logic of the "pyramid scheme" "memorandum".
  • The "troika" are bureaucrats sent to Greece to implement "austerity" and with no authority to discuss the "reforms" they are charged with overseeing.
  • Some of the "reforms" happen to be positive, some negative, but this is all incidental as they are part of the "fig leaf".
  • The SYRIZA government agrees with 70% of the "reforms" and considers the rest "toxic".
  • Because the "troika" bureaucrats do not have the authority to discuss the "toxic" reforms, the SYRIZA government does not recognise them as interlocutors. It does recognise the "institutions" and "partners" with an authority to discuss the "reforms".
  • The SYRIZA government is willing to negotiate a new "program" with the legitimate "institutions" and "partners", but not to extend the existing "fig leaf".
  • The SYRIZA government "accepts 0%" of the "memorandum" and its "austerity" "pyramidal logic".
As this was already clear at least since the press conference with Schäuble 5 days earlier, serious people who make snide remarks about 70% not being the same as 0% are being intellectually lazy.

To illustrate the depths of misrepresentation, be it due to laziness or dishonesty, in the serious people's commentary, let's look at Varoufakis' "cunning plan" for negotiating with the Eurogroup:

Our only tactic, ladies and gentlemen of the Opposition, would be to come up with reasonable, sensible proposals. I will not go with any available tacticism. Although I have spent many years of my life with game theory, I assure you that it will not apply it. Game theory is for gaming. Not playing with the future of Greece. Not playing with the future of Europe. Without bluffs, without twists and turns, this is our "cunning" tactic.
Now look at the reporting:To substantiate my above interpretation of Varoufakis' position, here is an excerpt from the Greek Parliament's official journal for February 10 [.doc file], google-garbled. To find the speech in the very long file, just perform a textual search for 'ΒΑΡΟΥΦΑΚΗΣ' (all caps) which indicates he's the one speaking, whereas lower case returns dozens of hits of references to him by other speakers.
The Memorandum for us very simply defined. Was that the combination of new debt accumulated over already unsustainable loans and private debt, provided the shrinking incomes, from which have to be repaid the old and new loans. That was the understanding.

...

This is the memorandum which was born in 2010 and which remains philosophical, macroeconomic, morally toxic and the skeleton, the basis of the program, which "run" and "running" up to our election. Is pyramidal austerity imposed and guarded with periodic visits the troika of envoys technocrats three important institutions to whom we belong and will belong and in which we are working, but not on the basis of stewardship and enforcement by a group of technocrats who send in the country us, with colonial features, this pyramid austerity.

Question: What percentage of the Memorandum accept? Just 0%! We will not accept nor a condition that enhances the vortex of the crisis, which magnifies the rate of debt, further wage reductions, new taxes on those who have already exhausted from taxation. We will not tolerate even a line, not a word, not one of the "red" lines that Mr. Venizelos, which reinforce the denial of reality and sacrifice Greeks of the most powerless without cause. We will not succumb to the deceitful error that deregulation of the labor market is reformed.
Ladies and gentlemen, the Memorandum, the pyramidal austerity loans the fed condition growing decline of our society, this story ended. This does not mean that ended the loan agreement with our partners. To stop, however, this Loan Agreement to be toxic require a new agreement, a new contract between us and our partners. Elected to negotiate. What to negotiate? A new agreement.

...

For example, why reject the commitment to reform the tax code -We have no reason to do it, just because it is part of the list of the MoU; - or the commitment of the redefinition of the concept of tax evasion? We want to do that. 70% of this "fig leaf" of the paper, the list, which came mnimoniaki logic pyramidal austerity is either irrelevant or independent of the mnimoniaki logic.

I repeat: What percentage of the Memorandum accept? We accept 0%, ladies and gentlemen.

...

Konstantinos SKREKAS: The "fig leaf" we want to hear.

...

GIANIS VAROUFAKIS (Minister of Finance): The "red" lines are yours and ours. And we have more. But overall, if the yield line to line and quantitatively, around 30% is toxic, mnimoniako piece which will reject.

And just so that it cannot be said that I take things out of context, I reproduce the entire speech below the fold. Enjoy.


ΓΙΑΝΗΣ ΒΑΡΟΥΦΑΚΗΣ (Υπουργός Οικονομικών): Κυρία Πρόεδρε, κύριες και κύριοι συνάδελφοι, δεν είναι στιγμή για πανηγυρισμούς, λεονταρισμούς είτε διαξιφισμούς, όταν διακυβεύονται τόσα λόγω -και το λέω αυτό με γνώση- της απερισκεψίας κάποιων εταίρων μας και μερικών τεχνοκρατών, που εν τη σοφία τους κρίνουν ότι είναι προτιμότερο να παίξουν παιχνίδια με τους ευρωπαϊκούς θεσμούς από το να δώσουν στην Κυβέρνησή μας το μόνο που ζητούμε από την αρχή που εκλεγήκαμε, που είναι μερικές εβδομάδες γαλήνης, ώστε να καταθέσουμε τις προτάσεις μας σε διαβούλευση με τους εταίρους μας.
GIANIS VAROUFAKIS (Minister of Finance): Madam President, ladies and gentlemen, it is time for celebration, bravado or bickering when stake so due and I say this with gnosi- the recklessness of some of our partners and some technocrats, which in its wisdom judge that it is better to play games with European institutions than to give our government the only thing we ask from the beginning that we were elected, which is a few weeks of tranquility, to give our recommendations in consultation with our partners.
Παρόλο ότι δεν είναι στιγμή για πανηγυρισμούς θα πω κάτι χωρίς όμως πανηγυρική διάθεση και θα το πω επειδή το πιστεύω. Με την ψήφο εμπιστοσύνης σήμερα ξεκινάει η μεταμνημονιακή περίοδος της χώρας, εγκαινιάζεται επίσημα η επιστροφή της αξιοπρέπειας που έχει κάνει τους συμπατριώτες μας σε όλα τα χωριά και σε όλες τις πόλεις να χαμογελούν χωρίς ίχνος εθνικισμού.
Although it is not time for celebration will say something but not solemn mood and I will say because I believe it. By a vote of confidence today starts metamnimoniaki period of the country, officially inaugurated the return of dignity that has made our compatriots in all the villages and in all the cities to smile without nationalism trace.

Οι κρίσιμες στιγμές, όμως, απαιτούν καθαρά λόγια και καθαρό μυαλό. Τι εννοώ όταν αναφέρομαι στο τέλος του μνημονίου για να είμαστε ξεκάθαροι. Θα σας πω, τουλάχιστον, εγώ τι εννοώ. Επιτρέψτε μου, επειδή οι ανακρίβειες υπονομεύουν την εθνική προσπάθεια που καταβάλλουμε -και που θα καταβάλλουμε από αύριο στις Βρυξέλλες- να είμαι επακριβέστατος, κάτι που θα συνιστούσα σε όλους και σε όλες.
The crucial moments, however, require clear words and clear mind. What I mean when I refer to the end of the Memorandum to be clear. I'll tell you, at least, what I mean. Let me because inaccuracies undermine national efforts -and will pay tomorrow in Brussels to'm very accurately, something that I would recommend to all and in all.
Θέλω να σας διαβεβαιώσω ότι δεν υπάρχει καμμία αμφιβολία πως η διαφωνία «ταΐζει» και ενισχύει τη δημοκρατία, αλλά όχι η διαστρέβλωση της άλλης άποψης.
I want to assure you that there is no doubt that the dispute "feeds" and strengthens democracy, but not the distortion of the other terms.
Το μνημόνιο για εμάς ορίζεται πολύ απλά. Ήταν εκείνος ο συνδυασμός νέων δανείων που συσσωρεύτηκαν επί ήδη μη βιώσιμων δανείων και ιδιωτικών χρεών, υπό τον όρο της συρρίκνωσης των εισοδημάτων, από τα οποία καλούνται να αποπληρωθούν τα παλιά και τα νέα δάνεια. Αυτό ήταν το μνημόνιο.
The Memorandum for us very simply defined. Was that the combination of new debt accumulated over already unsustainable loans and private debt, provided the shrinking incomes, from which have to be repaid the old and new loans. That was the understanding.
Προ του 2010 το Ακαθάριστο Εθνικό Προϊόν της χώρας μεγεθυνόταν -νομίζω ότι συμφωνούμε όλοι μας σε αυτό- μέσα από μη βιώσιμο δανεισμό. Είχαμε μια κλασική περίπτωση πυραμιδικής μεγέθυνσης και όχι σοβαρής ανάπτυξης της χώρας. Μετά το 2010, όταν έσκασε αυτή η «φούσκα», μπήκαμε σε μια περίοδο μεγάλης λιτότητας, που είναι το πλέον φυσιολογικό όταν έχεις σκάσιμο μιας «φούσκας».
Prior to 2010, the Gross Domestic Product of the country enlarges -nomizo that we all agree on self through unsustainable borrowing. We had a classic case of pyramidal growth rather serious development of the country. After 2010, when popped this "bubble", entered a period of great austerity, which is the most normal when you blow a "bubble."
Δυστυχώς, όμως, και εκείνη η περίοδος μετά το 2010 χαρακτηρίστηκε και πάλι από έναν μη βιώσιμο δανεισμό. Περάσαμε από την κλασική περίπτωση της πυραμιδικής μεγέθυνσης σε μια μοναδική στην ιστορία περίπτωση πυραμιδικής λιτότητας, λιτότητας για τους πολλούς, στη βάση τεράστιων μη βιώσιμων δανείων, που ωφελούσαν τους πολύ λίγους, βυθίζοντας την κοινωνία σε μια ανατροφοδοτούμεν_ 1; σκοτοδίνη, η οποία συμπαρέσυρε σχεδόν όλους, εργαζόμενους, μικρομεσαίους, βιοτέχνες, ακόμα και βιομήχανους.
Unfortunately, however, that the period after 2010 was characterized again by an unsustainable debt. We had the classic case of pyramidal growth in a historically unique event pyramidal austerity, austerity for many, the base of huge unsustainable loans, which benefit the very few, plunging society into a anatrofodotoumeni blackouts, which dragged almost everyone, employees , SMEs, artisans and even industry.
Αυτό είναι το μνημόνιο το οποίο γεννήθηκε το 2010 και το οποίο παραμένει φιλοσοφικά, μακροοικονομικά, ηθικά τοξικό και ο σκελετός, η βάση του προγράμματος, το οποίο «τρέχει» και «έτρεχε» μέχρι και την εκλογή μας. Είναι η πυραμιδική λιτότητα που επέβαλε και περιφρουρούσε με περιοδικές επισκέψεις η τρόικα των απεσταλμένων τεχνοκρατών τριών σημαντικών θεσμών, στους οποίους ανήκουμε και θα ανήκουμε και με τους οποίους θα συνεργαζόμαστε, αλλά όχι στη βάση της περιφρούρησης και της επιβολής από μια ομάδα τεχνοκρατών που στέλνουν στη χώρα μας, με αποικιακά χαρακτηριστικά, αυτής της πυραμιδικής λιτότητας.
This is the memorandum which was born in 2010 and which remains philosophical, macroeconomic, morally toxic and the skeleton, the basis of the program, which "run" and "running" up to our election. Is pyramidal austerity imposed and guarded with periodic visits the troika of envoys technocrats three important institutions to whom we belong and will belong and in which we are working, but not on the basis of stewardship and enforcement by a group of technocrats who send in the country us, with colonial features, this pyramid austerity.
Ερώτημα: Πόσο ποσοστό του μνημονίου αποδεχόμαστε; Ακριβώς 0%! Δεν θα αποδεχθούμε ούτε έναν όρο που ενισχύει τη δίνη της κρίσης, που μεγεθύνει το ποσοστό του χρέους, των περαιτέρω μειώσεων αποδοχών, των νέων φόρων σε αυτούς που έχουν ήδη εξαντληθεί από τη φορολόγηση. Δεν θα ανεχθούμε ούτε μια γραμμή, ούτε μια λέξη, ούτε μια από τις «κόκκινες» γραμμές που ανέφερε ο κ. Βενιζέλος, που ενισχύουν την άρνηση της πραγματικότητας και θυσιάζουν Έλληνες από τους πιο ανίσχυρους χωρίς αιτία. Δεν θα υποκύψουμε στην απατηλή πλάνη ότι η απορρύθμιση της αγοράς εργασίας αποτελεί μεταρρύθμιση.
Question: What percentage of the Memorandum accept? Just 0%! We will not accept nor a condition that enhances the vortex of the crisis, which magnifies the rate of debt, further wage reductions, new taxes on those who have already exhausted from taxation. We will not tolerate even a line, not a word, not one of the "red" lines that Mr. Venizelos, which reinforce the denial of reality and sacrifice Greeks of the most powerless without cause. We will not succumb to the deceitful error that deregulation of the labor market is reformed.
Κυρίες και κύριοι συνάδελφοι, το μνημόνιο, η πυραμιδική λιτότητα, τα δάνεια που την τροφοδοτούσαν υπό τον όρο όλο και μεγαλύτερης συρρίκνωσης της κοινωνίας μας, αυτή η ιστορία τελείωσε. Αυτό βέβαια δεν σημαίνει ότι τελείωσε η δανειακή συμφωνία με τους εταίρους μας. Για να πάψει, όμως, αυτή η δανειακή συμφωνία να είναι τοξική απαιτείται μια νέα συμφωνία, ένα νέο συμβόλαιο μεταξύ ημών και των εταίρων μας. Εκλεγήκαμε για να διαπραγματευτούμ^ 9;. Τι να διαπραγματευτούμ^ 9;; Μια νέα συμφωνία.
Ladies and gentlemen, the Memorandum, the pyramidal austerity loans the fed condition growing decline of our society, this story ended. This does not mean that ended the loan agreement with our partners. To stop, however, this Loan Agreement to be toxic require a new agreement, a new contract between us and our partners. Elected to negotiate. What to negotiate? A new agreement.
Το θεωρώ αστείο ότι μας ασκείται κριτική για το γεγονός ότι διαπραγματευόμασ` 4;ε και ότι θέλουμε μια «γέφυρα» μεταξύ της παλαιάς συμφωνίας, της μνημονιακής, της τοξικής κατ' εμάς, και της νέας συμφωνίας, που ευελπιστούμε ότι δεν θα είναι τοξική. Αυτό σημαίνει διαπραγμάτευση: αμοιβαίες προσπάθειες, «γέφυρα» προς μια νέα συμφωνία.
I find it funny that our criticism about the fact that we are negotiating and that we want a "bridge" between the old agreement, mnimoniakis, toxic according to us, and the new agreement, which hopefully will not be toxic. This means trading: mutual efforts, "bridge" to a new agreement.
Άκουσα σε αυτή την Αίθουσα και μόλις τώρα αλλά και προηγουμένως νουθεσίες από εκπροσώπους της προηγούμενης κυβέρνησης, νυν Αντιπολίτευσης, να διαπραγματευτούμ^ 9; και ότι έχουμε τη στήριξή σας, αλλά να δεσμευθούμε ότι δεν θα πάμε ποτέ στη ρήξη.
I heard in this Chamber and only now but earlier admonitions of representatives of the previous government, now Opposition, to negotiate and that we have your support, but to pledge that we will never get to rupture.
Κυρίες και κύριοι συνάδελφοι, συνειδητοποιείτε το οξύμωρο σχήμα εδώ; Αν δεν είσαι διατεθειμένος να διανοηθείς καν τη ρήξη, δεν διαπραγματεύεσαι.
Ladies and gentlemen, you realize the oxymoron here? If you are not willing to even imagine the rupture, not negotiate.
(Χειροκροτήματα από την πτέρυγα του ΣΥΡΙΖΑ)
(Applause from the wing SYRIZA)
Εάν δηλώσεις, εκ προοιμίου, στην αντίπαλη πλευρά ότι μία, δύο, τρεις μέρες θα περάσουν, θα είστε κλεισμένοι σε αυτές τις σκοτεινές και δυσάρεστες αίθουσες των Βρυξελλών, αλλά την τελευταία στιγμή αυτό που θα σου δώσουν, ό,τι και να γίνει θα το αποδεχθείς, τι περιμένετε ότι θα γίνει σε αυτή τη διαπραγμάτευση; Θα χάνουμε το χρόνο μας μέχρι την τελευταία στιγμή. Η αντίπαλη πλευρά θα διατυπώσει το τελεσίγραφό της και εμείς, έχοντας ήδη δηλώσει εκ προοιμίου ότι θα το αποδεχθούμε, γιατί δεν διανοηθήκαμε ποτέ την πιθανότητα να πούμε «όχι» στο τέλος, απλώς θα το αποδεχθούμε.
If statements, first, the opposing side that one, two, three days will pass, you will be locked up in these dark and unpleasant halls of Brussels, but the last time it will give you, no matter what will be the accept what you expect will happen in this negotiation? You waste time until the last minute. The opposing side will deliver the ultimatum of us, having already stated at the outset that you will accept, because he never imagined the chance to say 'no' to the end, will just accept it.
Καλύτερα να κάτσουμε εδώ, να οργανώσουμε τα Υπουργεία μας, να μείνουμε με τις οικογένειές μας και αν μας στείλουν με e-mail την απόφασή τους για εμάς, όπως συνέβαινε πέντε χρόνια τώρα.
Better to sit here, to organize our ministries, to stay with our families if we send it by e-mail their decision for us, as it was five years now.
(Χειροκροτήματα από την πτέρυγα του ΣΥΡΙΖΑ και των ΑΝΕΛ)
(Applause from the wing of SYRIZA and ANEL)
Αυτός είναι ο λόγος, κυρίες και κύριοι συνάδελφοι, που επιστρέψαμε το χαμόγελο στα πρόσωπα των Ελλήνων. Γιατί διανοηθήκαμε τη ρήξη, όχι επειδή την επιδιώκουμε. Θα κάνουμε τα πάντα για να την αποτρέψουμε, αλλά δεν διαπραγματεύεσαι, εάν την έχεις αποκλείσει.
That is why, ladies and gentlemen, that we returned the smile on the faces of the Greeks. Why imagined rupture, not because the seek. We will do everything to prevent it, but not negotiate if you have it blocked.
Αποδράσαμε από το φόβο ώστε να μην υπάρξει ρήξη, ώστε επειδή μπορούμε να τη διανοηθούμε απέναντι στην απαίτηση της ταπείνωσης, θα προκύψει μία νέα πραγματικά καλή συμφωνία και όχι μόνο για εμάς, αλλά και για τον μέσο Ευρωπαίο πολίτη. Όπως είπα -θα το πω άλλη μία φορά- θα κάνουμε ό,τι είναι ανθρωπίνως δυνατόν για να αποφευχθεί η ρήξη, αλλά δεν θα αρνηθούμε να τη διανοηθούμε. Γιατί αν αρνηθούμε να τη διανοηθούμε, απλά άλλη μία φορά η πυραμιδική λιτότητα στην οποία αναφέρθηκα θα επιταχυνθεί, θα βαθύνει, θα συρρικνώσει την Ελλάδα και τελικά θα συνεισφέρει στην απαξίωση της ευρωπαϊκής ιδέας όχι μόνο εδώ, αλλά σε όλες της χώρες της Ευρώπης.
Escape from the fear that there is no rupture, that because we can imagine against the requirement of humiliation, will give a new really good deal and not just for us but for the average European citizen. As I said -You say another time- will do everything humanly possible to prevent breakage, but will not refuse to imagine the. Because if you refuse to imagine the just once pyramidal austerity which I mentioned will accelerate, will deepen, will shrink to Greece and will eventually contribute to depreciation of the European idea not only here, but in all the countries of Europe.
Γιατί όπως κι εδώ έτσι και στις υπόλοιπες χώρες της Ευρώπης -σας διαβεβαιώ ότι- όταν περπατάμε στους δρόμους των ευρωπαϊκών πρωτευουσών βλέπουμε στους ανθρώπους, ακόμα και σε αυτούς που δεν συμφωνούν με τη θέση μας, ότι νοιώθουν πως κάτι αλλάζει στην Ευρώπη και ότι επιτέλους η Ευρώπη θα αρχίσει να αντιμετωπίζει τον εαυτό της όπως της αρμόζει.
Why just like here so in the rest of Europe -Your assure that- when walking the streets of European capitals see people, even those who do not agree with our position, that they feel that something is changing in Europe and finally the Europe will start experiencing herself as it deserves.
Μόνη μας τακτική, κυρίες και κύριοι συνάδελφοι της Αντιπολίτευσης, θα είναι να προσέλθουμε με λογικές, σώφρονες προτάσεις. Δεν θα πάμε με καμία διάθεση τακτικισμού. Παρά το ότι έχω ξοδέψει πολλά χρόνια της ζωής μου με τη θεωρία παιγνίων, σας διαβεβαιώ ότι δεν θα την εφαρμόσω. Η θεωρία παιγνίων είναι για τα παίγνια. Δεν παίζεις με το μέλλον της Ελλάδας. Δεν παίζεις με το μέλλον της Ευρώπης. Χωρίς μπλόφες, χωρίς περιστροφές, αυτή θα είναι η «πανούργα» τακτική μας.
Our only tactic, ladies and gentlemen of the Opposition, would be to come up with reasonable, sensible proposals. I will not go with any available tacticism. Although I have spent many years of my life with game theory, I assure you that it will not apply it. Game theory is for gaming. Not playing with the future of Greece. Not playing with the future of Europe. Without bluffs, without twists and turns, this is our "cunning" tactic.
Προτείνουμε γέφυρα από το αδιέξοδο καταστροφικό μνημόνιο προς ένα αμοιβαίως επωφελές συμβόλαιο με την Ευρώπη. Για να τους πείσουμε, δεν έχουμε κανέναν μα κανέναν ενδοιασμό, κανένα δογματισμό, να κρατήσουμε όσα μέρη είχαν προτείνει εκείνοι στις προηγούμενες συμφωνίες, όσα μέρη του μνημονιακού προγράμματος δεν απειλούν να μολύνουν τη νέα εποχή, τη νέα συμφωνία με το μνημόνιο.
We propose bridge the impasse devastating memorandum to a mutually beneficial contract with Europe. To convince them, but we have no no hesitation, no dogmatism, to keep those Parties had suggested those in previous agreements, those parts of the program mnimoniakou not threaten to pollute the new era, the new agreement with the Memorandum.
Για παράδειγμα, γιατί να απορρίψουμε τη δέσμευση για μεταρρύθμιση του φορολογικού κώδικα -έχουμε κανένα λόγο να το κάνουμε, μόνο και μόνο επειδή αποτελεί μέρος του καταλόγου του MoU;- ή τη δέσμευση του επαναπροσδιορισμ_ 9;ύ της έννοιας της φοροδιαφυγής; Εμείς θέλουμε να το κάνουμε αυτό. Το 70% αυτού του «φύλλου συκής», του χαρτιού, του καταλόγου, το οποίο συνόδευε τη μνημονιακή λογική της πυραμιδικής λιτότητας, είναι είτε άνευ σημασίας είτε ανεξάρτητο από τη μνημονιακή λογική.
For example, why reject the commitment to reform the tax code -We have no reason to do it, just because it is part of the list of the MoU; - or the commitment of the redefinition of the concept of tax evasion? We want to do that. 70% of this "fig leaf" of the paper, the list, which came mnimoniaki logic pyramidal austerity is either irrelevant or independent of the mnimoniaki logic.
Επαναλαμβάνω: Πόσο ποσοστό του μνημονίου αποδεχόμαστε; Αποδεχόμαστε 0%, κυρίες και κύριοι συνάδελφοι.
I repeat: What percentage of the Memorandum accept? We accept 0%, ladies and gentlemen.
(Θόρυβος από την πτέρυγα του ΠΑΣΟΚ και της Νέας Δημοκρατίας)
(Noise from the wing of PASOK and New Democracy)
ΚΩΝΣΤΑΝΤΙΝΟΣ ΣΚΡΕΚΑΣ: Των μέτρων όμως;
Konstantinos SKREKAS: the measures though?
ΓΙΑΝΗΣ ΒΑΡΟΥΦΑΚΗΣ (Υπουργός Οικονομικών): Πόσο ποσοστό των μέτρων αποδεχόμαστε;
GIANIS VAROUFAKIS (Minister of Finance): How much percentage of meters accept?
ΚΩΝΣΤΑΝΤΙΝΟΣ ΣΚΡΕΚΑΣ: Το «φύλλο συκής» θέλουμε να ακούσουμε.
Konstantinos SKREKAS: The "fig leaf" we want to hear.
(Διαμαρτυρίες από την πτέρυγα του ΣΥΡΙΖΑ)
(Protests from the wing SYRIZA)
ΓΙΑΝΗΣ ΒΑΡΟΥΦΑΚΗΣ (Υπουργός Οικονομικών): Οι «κόκκινες» δικές σας γραμμές είναι και δικές μας. Κι εμείς έχουμε και περισσότερες. Όμως, συνολικά, αν το πάρουμε γραμμή προς γραμμή και ποσοτικά, γύρω στο 30% είναι το τοξικό, μνημονιακό κομμάτι το οποίο θα απορρίψουμε.
GIANIS VAROUFAKIS (Minister of Finance): The "red" lines are yours and ours. And we have more. But overall, if the yield line to line and quantitatively, around 30% is toxic, mnimoniako piece which will reject.
Κυρίες και κύριοι, αυτή η Κυβέρνηση είναι η πρώτη που προσέρχεται όρθια στο Eurogroup, όχι εκ προοιμίου σκυφτή.
Ladies and gentlemen, this government is the first to appear for upright in Eurogroup, not advance stooped.
Θέλω να κλείσω -γιατί δεν θέλω να σας κουράσω σήμερα- και να πω ότι κατανοώ τη συγκινητική προσπάθεια όσων δεν μπόρεσαν να διανοηθούν τη ρήξη με το μνημόνιο, να μας χαρακτηρίσουν και εμάς μνημονιακούς, να πουν πως επειδή δεχθήκαμε τα μη μνημονιακά εδάφια της μνημονιακής συμφωνίας ώστε να πείσουμε τους εταίρους μας, είμαστε και εμείς μνημονιακοί.
In closing - because I don't want to tire you today -I'd like to say that I understand the moving effort by those who could not even conceive a rupture with the memorandum to portray us as pro-memorandum too, to say that because we accepted bits of the [logically] non-memorandum parts of the memorandum, as part of the memorandum deal so as to convince our partners, we too are pro-memorandum.
Αντί να προβάλλουν πάνω μας την υποταγή τους στο μνημόνιο, θα τους παρακαλούσα, θα τους συμβούλευα -από τη στιγμή που μας συμβουλεύετε και εσείς, θα μου επιτρέψετε να σας συμβουλεύσω και εγώ- το εξής: Γιατί δεν ενώνετε τις δυνάμεις σας μαζί μας; Πώς; Αντί να μας νουθετείτε, να δηλώσουμε εκ προοιμίου ότι θα αποδεχθούμε ό,τι μας ζητήσουν οι δανειστές μας, ίσως θα μπορούσατε να μας παροτρύνετε να μην διανοηθούμε να γυρίσουμε από τις Βρυξέλλες χωρίς μία έντιμη αντιμνημονιακή συμφωνία με την Ευρώπη. Να βοηθήσετε, να στηρίξετε τη διαπραγματευτική μας ισχύ μιλώντας στους ομολόγους σας ιδεολογικά στην Ευρώπη και λέγοντάς τους ότι αυτό που ζητάει η ελληνική Κυβέρνηση, τη δυνατότητα μιας διαβούλευσης στη βάση της λογικής και του κοινού ευρωπαϊκού συμφέροντος, είναι απαραίτητη για την προσπάθεια αναστήλωσης της ευρωπαϊκής ιδέας.
Rather than rely on us their allegiance to the memorandum, I would ask them, I would advise them -from the moment we advise you, allow me to advise you and ego- this: Why do not you join forces with us? How? Instead admonish us to state at the outset that we will accept what we ask our lenders, perhaps you could urge us not imagine to go from Brussels without loyal anti-memorandum agreement with Europe. To help, to support our negotiating power talking to your counterparts in Europe ideologically and telling them that this is requested by the Greek Government, the possibility of a consultation on the basis of reason and the common European interest, it is necessary to attempt restoration of the European idea.

Display:
Apparently I've busted MySQL's 64Kb limit on text fields, so here's the last bit of the speech...
Ό,τι όμως και να επιλέξετε, να ξέρετε ότι αυτή η Κυβέρνηση θα σταθεί όρθια, θα σταθεί αντάξια των προσδοκιών ολόκληρης της χώρας και θα προτάξει το συμφέρον του μέσου Ευρωπαίου πολίτη, που τα δικά μας μνημόνια υπονόμευσαν τόσο βάναυσα.
Whatever and however you choose, know that this government will stand upright, will stand worthy of expectations throughout the country and will offer in the interest of the average European citizen, that our own understandings undermined so brutally.
Ευχαριστώ.
Thanks.
(Χειροκροτήματα από την πτέρυγα του ΣΥΡΙΖΑ και των ΑΝΕΛ)
(Applause from the wing of SYRIZA and ANEL)


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 13th, 2015 at 05:15:32 AM EST
This is the reason why so many people are up at arms over Varoufakis:

Our only tactic, ladies and gentlemen of the Opposition, would be to come up with reasonable, sensible proposals. I will not go with any available taktikismou. Although I have spent many years of my life with game theory, I assure you that it will not apply it. Game theory is for gaming. Not playing with the future of Greece. Not playing with the future of Europe. Without bluffs, without twists and turns, this is our "cunning" tactic.

He's doing the thing you really shouldn't do in diplomacy. Which is, speaking plainly.

by Upstate NY on Fri Feb 13th, 2015 at 08:09:16 PM EST
[ Parent ]


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 12:09:31 AM EST
[ Parent ]
I think people are taking the game theory thing way too seriously.  No doubt Varoufakis could run circles around most doing it, but I don't think it's terribly important here.  His advantage lies in being able to talk macroeconomic sense and understand Greek political attitudes better than the troika.

You could think of that in a game theory sense, but that seems to lead reporters to ascribing mystical powers to Varoufakis when it's really pretty simple.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 14th, 2015 at 07:27:08 AM EST
[ Parent ]
YV: "I'm talking macroeconomic sense."

Media: "Look! Game theory!"

by afew (afew(a in a circle)eurotrib_dot_com) on Sat Feb 14th, 2015 at 07:51:11 AM EST
[ Parent ]
As everything with most journalism this day, the Game Theory connection is just facile reporting.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 07:52:19 AM EST
[ Parent ]
It's also kind of hilarious, since they seem to think it's magic, yet they're engaged in game theory-type thinking all the time.  They just don't realize it.  "If the Greeks do x, the Germans will probably do y."  That's just game theory with sloppy modeling.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 14th, 2015 at 08:05:49 AM EST
[ Parent ]
Yes, but Varoufakis recognized that he hasn't the time ti explain what game theory is and is cutting his losses by distancing himself.
by IM on Sat Feb 14th, 2015 at 08:31:47 AM EST
[ Parent ]
But, even his interlocutors are freaked out by the game theory bit. Padouan said to him, "This isn't some kind of prisoner's dilemma."
by Upstate NY on Sat Feb 14th, 2015 at 01:45:24 PM EST
[ Parent ]
It certainly wasn't a Prisoner's Dilemma.  The game was set up so that no matter what Greece did, Greece lost and the Troika won, Grexit hand-wringing notwithstanding. Varoufakis is trying to un-tilt the playing field the least bit, and the Troika tools (including the ever pliant, compliant, and deliberately ignorant MSM) have gone berserk.
by rifek on Sat Feb 21st, 2015 at 02:16:43 PM EST
[ Parent ]
Compared to the Serious People, any form of rational predictive thinking counts as a mystical power.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Feb 14th, 2015 at 08:57:20 AM EST
[ Parent ]
The Nation does a better job, with an article about Varoufakis and Valve.
by gk (gk (gk quattro due due sette @gmail.com)) on Sat Feb 14th, 2015 at 11:19:37 AM EST
[ Parent ]
What's the other game TF2 players can trade with?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 14th, 2015 at 11:46:20 AM EST
[ Parent ]
Half-Life.
by Upstate NY on Sat Feb 14th, 2015 at 01:44:34 PM EST
[ Parent ]
Probably more appropriate, given the toxicity involved.
by rifek on Sat Feb 21st, 2015 at 02:24:56 PM EST
[ Parent ]
Long before Varoufakis joined the gov't, people in media and writing who are affiliated with Kathimerini and Protagon (To Potami's online media) told me they absolutely believed Varoufakis favored an exit from the euro. They also know that Costas Lapavitsas (London School of Economics and Syriza Finance) also does.

This is why many in Greece who are in the media are very suspicious of Syriza and Varoufakis.

by Upstate NY on Sat Feb 14th, 2015 at 02:35:03 PM EST
[ Parent ]
For years Varoufakis has said exiting the Euro would be a bigger mistake than having joined it. Lapavitsas is for Grexit all right.

Also, on Protagon... Varoufakis' many faces: When the FinMin was a hooligan (video) (February, 07 2015)

The Radical Left Coalition Finance Minister not only wrote for Protagon.gr, headed by the Potami leader, but he was willing to be a hooligan for it, too.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 06:03:17 PM EST
[ Parent ]
Correct, I said this to them at a dinner, and they were insistent that I was wrong.
by Upstate NY on Sat Feb 14th, 2015 at 06:16:27 PM EST
[ Parent ]
Varoufakis never was for GRexit. He wrote for Protagon, which was headed by Stavros Theodorakis as an independent online magazine. To Potami was created in 2014, Protagon existed well before that and although it had a center-right tint, it was an open publication. Varoufakis wrote a column for Vaxevanis (of Liste Lagarde fame - the journalist who exposed the list and then was prosecuted for it) magazine, Hot-Doc too. He was nothing if not a prolific writer.

He wrote a letter to Theodorakis when he created Potami, telling him this was not a good idea, but good luck anyway

The road of excess leads to the palace of wisdom - William Blake

by talos (mihalis at gmail dot com) on Sun Feb 15th, 2015 at 05:01:31 AM EST
[ Parent ]
Since when do The Serious People (TM) bother to read what they comment on?  After all, it doesn't matter what was actually said, just what The Serious People (TM) think about it.
by rifek on Sat Feb 21st, 2015 at 02:05:44 PM EST
[ Parent ]
See also:

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 13th, 2015 at 05:34:53 AM EST
Quite frankly, I'm surprised that Greece and Varoufakis have received as generous a reception in the media as they have. I thought it would have been much much worse. Sure, they have been pilloried and ridiculed, and sure their words have been twisted and some outfits, like Spiegel, have even cast slurs against Varoufakis by calling him an Anti-Semite, but still--I expected much much worse.
by Upstate NY on Fri Feb 13th, 2015 at 11:15:27 AM EST
some outfits, like Spiegel, have even cast slurs against Varoufakis by calling him an Anti-Semite,

No, the entire German media called Kammenos an anti-semite, based on an out-of-context quote from a silly diatribe about the Orthodox Church's supposed lack of tax exemption compared to other religions.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Feb 13th, 2015 at 02:25:40 PM EST
[ Parent ]
Nope, it was an article on Varoufakis's time in Australia.

I posted it in Talos's thread on Tsipras.

by Upstate NY on Fri Feb 13th, 2015 at 02:36:12 PM EST
[ Parent ]
Sorry, I mis-fired.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Feb 13th, 2015 at 03:15:57 PM EST
[ Parent ]
They did both.
by gk (gk (gk quattro due due sette @gmail.com)) on Sat Feb 14th, 2015 at 04:50:19 AM EST
[ Parent ]
Unfortunately we are now in a propaganda war conducted through the MSM and most people will probably be led to perceive an image of the new Greek government flapping around helplessly in the wind while the VSP devise a "solution" which Greece will have to accept on pain of expulsion.

Should Tspiras call their bluff - which I think he has to - you will see the VSPs and their MSM helpers get v. agitated indeed. Then Tspiras just has to smile and speak calmly about Greece not being able to pay moneys they don't have or accept more loans they know they can't service.

The big problem will be the bank run and immediate lack of liquidity which will force Tsipiras' hand on your parallel currency proposal. IMO the very prospect of such a thing happening will have the VSP's in shock - Greece will indirectly be challenging the ECB's monopoly on controlling the money supply.  

No greater sin could be imagined...

At that point the VSPs will either cave or get seriously vindictive and seek to destroy the Greek economy.  If the latter I see it as the beginning of the end for the centre right Hegemony in Europe, although unfortunate the process will take too long to save the Greeks from a lot more suffering.

I retain some hope that Merkel will not let things go quite so far.  The parallels to Weimar Germany and Germany after WW2 are just too striking not to be acutely embarrassing for her.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 11:33:21 AM EST
The European Centre Right got seriously vindicative on Greece already in 2010, and they won't allow Syriza's challenge to stand. My bullet-point paraphrase of Varoufakis is something that can't be allowed to come under public scrutiny because it exposes the twisted logic of the "rescue" seen so far. It's going to be a sight to see them drop on Greece like a ton of bricks. If it will be the end of Centre-Right hegemony, the Centre-Right may well take Europe down with them.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 13th, 2015 at 11:45:54 AM EST
[ Parent ]
Centre-Right may well take Europe down with them.

The Euro, if not Europe, I would imagine.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 13th, 2015 at 12:09:03 PM EST
[ Parent ]
Ever the optimist, I see.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Feb 13th, 2015 at 12:17:16 PM EST
[ Parent ]
Operationally optimistic. The odds are probably strongly pessimistic. But conceding defeat is pointless unless you have an exit plan, and, even then, it is always possible, if unlikely, that some better future could have been had. Unfortunately, the whole planet needs an exit plan.

We will, IMO, be unlikely to have even a tenth of the present population in a century and who knows what will pass for 'civilization'. The civilization we have doesn't pass the smell test. We are a social species that has repeatedly demonstrated the ability to generate unsustainable 'civilizations' that undergo spectacular collapses and this time we have built and will collapse on a global scale.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 13th, 2015 at 05:16:56 PM EST
[ Parent ]
Syriza were elected with a mandate not to let 2010 happen again. The VSP have been working on the blithe assumption that Syriza will break their election promises like everyone else.  i think they may be in for a surprise because Syriza have their backs to the wall and will disappear down the plughole of history if they fold.

My best guess is that everyone will go to the brink and come back with the usual fudged compromise which might just work if there is a general EZ recovery.  Syriza know they can only go to the well once.  They will get NOTHING more once the deal is done - even if it includes the usual details to be finalized later.

My hope is that Varoufakis  is a lot smarter than his opponents and will end up getting a deal good enough to just about work - but I'm aware that that requires a degree of wishful thinking...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Feb 13th, 2015 at 12:41:15 PM EST
[ Parent ]
The Nazi Schäuble cartoon in Syriza's paper didn't help, nor did Varoufakis' "waterboarding," but...

Merkel has already given a light waffling signal. My bet's on Syriza... because Juncker is also playing against Merkel.

That's if we don't go to war within weeks.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Fri Feb 13th, 2015 at 01:53:24 PM EST
[ Parent ]
I agree. Young Turks always surprise 'old farts' who are, underneath it all, and rationally so, quite fearful of the young ones

Hey, Grandma Moses started late!
by LEP on Fri Feb 13th, 2015 at 04:13:44 PM EST
[ Parent ]
"The Nazi Schäuble cartoon in Syriza's paper didn't help"

The FAZ apparently invented this story, and the rest of our quality media blindly followed. In reality the Nazi Schäuble cartoon appeared in "Avgi" a daily that is not owned by Syriza, and that appears in 2,000 copies a day. It is owned by a Syriza MP, but "Syriza's paper" is not true.
https://www.facebook.com/rmisik/posts/10153103323544084?pnref=story

by Katrin on Sat Feb 14th, 2015 at 01:32:01 PM EST
[ Parent ]
Crazy Horse:
That's if we don't go to war within weeks.

Between Greece and Germany?

Panzers at the Parthenon?

This was Jake's point for years... There are not going to be gunboats around this issue.

Crazy Horse:

Juncker is also playing against Merkel.

So even he is useful for something.

Watch Merkel's fleet of foot kick in pronto when she realises most Germans like Varoufakis better than 'mad dog' Schauble, and as they continue realising en masse that a lot of their own problems come from their own banks' lack of transparency and funny behind the curtains bizniz deals, not (so much) the lazy corrupt Southerners.

Germany will not be permitted by world opinion to use any military force in this matter (further enrichment of the 1%), and Mutti is no Thatcher, thank ceiling cat.

Besides between possible boots on the ground against IS and Ukraine's clusterfuck the MIC is doing fine thankyou very much.

It's not as if Greece were an Islamic country.

It's more the military and Golden Dawn that are the dangers Syriza has to contain during the inevitable transition to a preindustrial economy that Greece will experience in the meantime, under the banksters' lashes.

As she goes 'cold Turkey' from consumerism and the redimensioning of the concept of currency by Varoufakis continues.

The master move right now for him would be to plaster S.Greece with PV, (while thanking Germany for setting such a great example in this regard)!

I bet China would finance that even without buying the land, just for the giggles. They have good wind down there in the islands, toss a few turbines in for good measure, maybe get used to going to bed at sundown.

Watch Schauble's bullet brain explode subsequently.

The revolution will be televised.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun Feb 15th, 2015 at 05:42:14 AM EST
[ Parent ]
I think you're right on all counts.

If it will be the end of Centre-Right hegemony, the Centre-Right may well take Europe down with them.

I think this has been inevitable for a while now. It was just a question of which domino would fall first.

Now where are we going and what's with the handbasket?

by budr on Sat Feb 14th, 2015 at 03:38:14 PM EST
[ Parent ]
But if the EU can no longer finance and conceal German excesses while siphoning funds to the 1%, it's outlived its usefulness, nicht wahr?
by rifek on Sat Feb 21st, 2015 at 02:26:58 PM EST
[ Parent ]
I'm glad Migeru made this diary because it really shows how consistent Syriza has been so far, despite the fact they are neophytes in gov't.

And then there's this that shows unusual support from the Greek political spectrum:

http://www.keeptalkinggreece.com/2015/02/13/epp-calls-on-tsipras-to-stick-to-samaras-commitments-tri ggers-angry-reactions-by-nd-politicians/

"It's time, our European partners and my old friends in the EPP, to realize that the sacrifices of the Greek people deserve respect and solidarity" and that "these sacrifices were utilized by by the government in the past and this should be done by the current government," Sioufas concluded.
by Upstate NY on Fri Feb 13th, 2015 at 03:13:34 PM EST
The Troika strategy ... keep the Greek frog in the pot, at all costs, until it's unconscious and totally helpless or other frogs will follow Greece's example. Politicians' promises and election results are meaningless ... Obama proved that. The war is on folks ... oligarchs vs. the rest.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Fri Feb 13th, 2015 at 04:08:19 PM EST
New poll out, the first since the elections: SYRIZA is leading ND by 27 points: 45,4 to 18,4 (It's 49,4% to 20% normalized)

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Fri Feb 13th, 2015 at 07:51:34 PM EST
Strong preliminary evidence that a major political realignment is occurring in Greece. We will have to wait and see what the Serious People can do to de-rail this rolling train, but I suspect that it would come out on top even in a giant economic train-wreck. With Syriza on offer, who else would any here want in charge if it were their lives at stake?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 13th, 2015 at 08:16:50 PM EST
[ Parent ]
Wow. Those would give them a massive absolute majority in a proportional voting system (even without the added 50 seats), something very rare.

There are two Greeks (one of them a quant by background, so that may be what clouds his sense) in my current project team (out of 10). OK, two London-based Greeks which might explain what follows:

On the Monday after the elections they and I talked about them for a short while. In essence, both said to be appalled by the result (though the mother of one of them had been jobless for several years and only survived from her daughter sending money...).
It was awful because they were far too left-wing, because they had only been elected because of a bagful of silly promises that they could not begin to keep and so on. Then one did ask what I thought. I said my big disappointment was that they had fallen two short of an absolute majority and would have to strike a deal.

I have not talked about it again but I suppose I will have to ask at some point if their take on it has changed, which it may have. But I thought it was somewhat ironic that it would be the citizen of a "creditor nation" who approved of stopping the extend and pretend with vicious pain inflicted as a side order, whereas the two more direct recipients of the pain were calling for more of it.
As for calling Syriza out on having made empty promises, they really have looked so far as far and away the Government most trying to apply its program and speak the truth in many decades - and I don't just mean in Greece.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 14th, 2015 at 02:58:31 AM EST
[ Parent ]
The Serious People were hoping that maybe a failure of the negotiations would lead to new elections to Syriza's disadvantage. This changes the calculus.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 06:59:38 AM EST
[ Parent ]
The Serious People will be frightened and dangerous. Let us hope they mostly damage themselves.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 14th, 2015 at 09:59:27 AM EST
[ Parent ]
The fallout will be widespread.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 06:06:16 PM EST
[ Parent ]
Hopefully, but what the Serious People are banking on is the poll effect of a collapse/bank run after the failure of talks, which is still in the future.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Feb 15th, 2015 at 06:13:47 AM EST
[ Parent ]
When your success depends on a nation failing, you need something painful, messy, and quick to happen to you.
by rifek on Sat Feb 21st, 2015 at 02:48:17 PM EST
[ Parent ]
If your Greek team members are, as I suspect, heavily trained in economics in the neo-classical tradition, as most are, that alone could explain their disdain for Syriza. As John D. Rockefeller said of the University of Chicago, if not specifically of its economics department: "Best investment I ever made."  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 14th, 2015 at 10:03:29 AM EST
[ Parent ]
You're confusing neoclassicalism with neoliberalism.  Neoclassicalism would back Syriza's position.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Feb 14th, 2015 at 10:27:26 AM EST
[ Parent ]
To the extent that the Neoclassicalism incorporated the Keynesian Synthesis, such as with Samuelson. But the New Classicals and many other strains seem to have regressed on that point. Lots, while wanting to give lip service to Keynes, would really like to ignore him. The saltwater school is much more receptive to Keynes than the freshwater school, as least so far as I can see. Harvard - maybe it is too far from the sea. :-)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Feb 14th, 2015 at 08:36:11 PM EST
[ Parent ]
Right, I was going to say, if you mean New Classical you're right.

Neoclassical references the synthesis, so everybody who traces their roots to Samuelson and Solow and a few others mostly at MIT.  

New Classical references the school that emerged at Minnesota under Prescott in the mid-'80s and traces its roots to Chicago under Lucas (after monetarism collapsed and Friedman went away).

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 15th, 2015 at 08:22:21 AM EST
[ Parent ]
Neoclassical, (now and mostly, certainly in the USA), refers to the synthesis. But the role of Keynes in the synthesis has been downgraded since the stagflation of the '70, (surely you know that killed Keynesianism), no one mentioned the total uselessness of Friedman's monetarism during Volker's time, to be replaced in public policy by A Laffer's "supply side" fairy tale and de facto return to the original neoclassical doctrine, which it is, absent any Keynes, and New Classical rode in on Bush 41' coat tails, (beginning in the '80s Republican primaries), when Bush labeled much of what Reagan was spouting as Voodoo Economics. I still remember Bush '41 talking about 'The Invisible Hand' on TV during the '88(?) election. That inspired me to read Muller's Adam Smith in his time and ours.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 15th, 2015 at 10:47:04 AM EST
[ Parent ]
Actually, Friedman himself said monetarism was useless once Volcker tried it.  Volcker shifted to targeting interest rates rather than reserves and monetary aggregates, which is what Keynes advocated back in the '20s as an alternative to the gold standard.

(Everybody sort of associates the modern Fed with monetarism, because everybody forgets what monetarism actually was.  Friedman advocated targeting the money supply, not interest rates, and contrary to popular belief, they are not the same.)

Supply-side economics isn't really a neoclassical or New Classical thing.  It predates both, actually.  The concept was pretty well covered -- by everybody from ancient China and Egypt to Keynes to Solow during his time working for Kennedy -- long before Artie Laffer started babbling about it.

Neoclassicalism is fundamentally still demand-side macro.  It's mostly the questions on how to model capital and banking/monetary mechanics that separate it from Post Keynesianism/MMT/Circuitism (and separate those heterodox schools from each other to some degree -- Circuitists focus on bank money while MMTers focus on high-powered money).

New Classicalism is all about productivity shocks.  It's not really in agreement with any of the above, although there's obviously a great deal of political overlap between Supply-Siders and New Classicalists.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 15th, 2015 at 11:21:53 AM EST
[ Parent ]
I would appreciate a diary about "what monetarim actually was".
Also, what does that failure of monetarism tell us about the latest nonkeynesian fads, "NGDP targetting" and "Market Monetarism"?


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 15th, 2015 at 03:32:24 PM EST
[ Parent ]
I can't really do justice at diary-length to what monetarism actually was short of digging into Friedman/Schwartz's book.  It's just been too long since I've wrestled with it.  And, to be honest, I haven't dug into NGDP targeting and Market Monetarism -- which I think are the same things -- enough to really appreciate it and its implications.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 15th, 2015 at 03:47:07 PM EST
[ Parent ]
Benjamin Strong, with the help of Allyn Young, figured out Open Market Operations in the 20s, and that became the major tool of the Fed until Strong died in '28. The new guy wanted to go back to the Real Bills Doctrine and, worse, was obsessed that too much credit had been created. So the Fed started dialing back, October '29 came along and the Fed doubled down. There was a big bubble in stock prices, but....

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 15th, 2015 at 09:03:38 PM EST
[ Parent ]
Yes, I remember The Serious People (TM) blaming the whole thing on Keynes when in reality the problem was that we hadn't been following Keynes but rather had begun to play in earnest the game of smoke-and-mirrors kick-the-can economics.  This was our lords' and masters' big opportunity to impose The Big Lie as the basis of our economic, political, and social systems, and boy did they grab it and run with it.
by rifek on Sat Feb 21st, 2015 at 03:58:27 PM EST
[ Parent ]
...adding:

There is some minor overlap between the two, since the New Classical business cycle model (Real Business Cycle) is basically Solow's old growth model with some crap bolted on, but Solow would tell you that's stupid.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 15th, 2015 at 10:39:13 AM EST
[ Parent ]
Solow deserved his Nobel but came up independently but at about the same time as Samuelson's work. And he testified before a Congressional committee (2010?) to that effect and to the effect that Lukas et. al. were insane and DSGE of very limited practical utility. David Colander also testified at that hearing. The transcrips were taken down when the Republicans regained the House.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 15th, 2015 at 10:56:04 AM EST
[ Parent ]
DSGE modeling is of practically no utility.  It sounds nice, but it really can't make projections beyond a quarter or two and routinely gets owned by the Fed's internal forecasts.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sun Feb 15th, 2015 at 11:34:00 AM EST
[ Parent ]
Neoclassicalism would back Syriza's position.

The neoclassical position is would be that Syriza's position is correct in the "short run," but the Troika's position is correct in the "long run."

The argument would then be about trading off current misery against future prosperity. Different neoclassicals fall in different camps, depending on their political affiliation and their (unsubstantiated) beliefs about the long-run convergence rates.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sun Feb 15th, 2015 at 02:09:18 PM EST
[ Parent ]
...Syriza's position is correct in the "short run," but the Troika's position is correct in the "long run."

Syriza wants the average schmo to have a decent life NOW, thus it is "correct", and the Troika wants to kill off the average schmo and thus end their constant whining about having a crappy lifestyle, and thus are correct in the "long run". Who do you think the elites favor?

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Sun Feb 15th, 2015 at 03:14:44 PM EST
[ Parent ]
Even then, I don't think so, but then we're getting into the impact on trend growth and all that fun stuff.  Most neoclassicalists, I think, would say that you need to balance the budget over the long term, but that Syriza's position is a much better way of doing so.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Feb 16th, 2015 at 05:04:06 PM EST
[ Parent ]
Neoclassicals, if pressed, will typically agree in principle that the short run dynamics impact the long-run dynamics.

But in the formalized neoclassical models this connection does not exist, or if it does it is at best grafted on as an afterthought.

Because the neoclassicals fundamentally have no language in which to describe this connection. If you treat the economy as temporary deviations from a baseline of omniscient agents, then you are automatically excluding all the actual causal mechanisms by which the short term can influence the long term.

Likewise, most neoclassicals will agree (once you take their hand and carefully walk them through the relevant accounting) that the "balanced budget" of which they speak needs to allow for sufficient sovereign deficits to accommodate the need for additional high-powered money to accommodate nominal growth.

This also does not make it into any of their formal models.

Most neoclassicals will also agree, when pressed, that any arbitrage condition between interest rates and returns to equity are weak at best.

But all the formal modeling assumes that such an arbitrage connection exists, at least as a long-run fundamental.

Most neoclassicals will agree, when you take their hand and carefully walk them through the actual mechanics, that there is nothing actually "unsustainable" in "unsustainable fiscal policy," unless you are wedded to a particular rate of inflation or foreign exchange. Most neoclassicals will agree, when pressed, that both of those are partisan political positions...

... and then they will go right back and build models that assume those partisan political positions as a given.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 17th, 2015 at 02:18:33 AM EST
[ Parent ]
Google Yanis Varofoukis, A Most Peculiar Failure. Jake just gave a quick summary of what Yanis calls 'the dance of the meta-axioms. They always retreat from strong claims, which they always want to include in their models and theories, such as Arrow-Debru, when shown that they do not apply to any real world condition. Then, after things have quieted down, they drag them back in in different costumes. It is because they, (leading figures), are results driven. They know what the donors to the universities and departments, the politicians, etc. want and, somewhere inside, sense that they have to accommodate. The Upton Sincair quote comes to mind, but it is not simple. Mary Douglass gets at this in How Institutions Think. Thought collectives per Ludwig Fleck.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 17th, 2015 at 02:52:47 AM EST
[ Parent ]
When I took my first macro class, now pushing 40 years ago, I found it rather odd that the graphs of the models worked only if the scale of each axis were varied at whim and the data were allowed to margins of error that rendered them meaningless.  I found it even odder that everyone seemed to buy off on this.  Several years later, in the last econ class I took, the prof revered numerator and denominator at a point in a formula, and upon having it pointed out responded, "Well, it doesn't matter."  At that point I was compelled to conclude that economics is not the dismal science but rather the pseudo-scientific brothel.
by rifek on Sat Feb 21st, 2015 at 04:12:03 PM EST
[ Parent ]
The point of NCE isn't to model the world accurately, it's to provide pseudo-intellectual air cover for predictable political positions - the most obvious of which is simply "rich good, poor bad."

Or even "power good, weakness bad."

I don't think there's anything more subtle going on.

It's disturbing that we've allowed these charlatans to do as much damage as they have, but there it is.

Ultimately it's a medieval calculus of power, not a post-Enlightenment calculus of responsibility and foresight. So there is no possibility that any sovereign action which decreases the power of the people who sponsor NCE will be acceptable to them.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Feb 17th, 2015 at 04:16:21 AM EST
[ Parent ]
What is more subtle is the means whereby so many economists come out of university thinking that they have a solid education in a real discipline and that they came to these conclusions of their own free will. The very idea of a thought collective is repugnant to a very large number of people, especially in the Anglo world. One might be forgiven for thinking that most believe that we are little different than snakes, who hatch out and slither off with no social learning, but, instead, a large number still think we ARE social animals, but that OUR glorious 'faith of our fathers' has, allowed us to develop our own special version of the One Truth, as divinely revealed. That remains the root of our understanding by a large portion of US citizens, for sure. Meanwhile, there is a Manichean choice available to all and it is vital that each makes the right choice. The consequences of this belief system endure long after the formal religious beliefs are diluted, even in people who believe they are non-religious. The conclusions about language of Benjamin Warf and about the scientific process by Ludwig Fleck are simply not congenial to any of the so called 'power disciplines', none of which are scientific, no matter what clothes they wear. Yet most of their practitioners believe they are as scientific as they can be. And the students come out of college believing that they came to their understandings of their own choice.

Fleck argues cogently that such organized bodies of knowledge ARE the products of a group dynamic and that, in almost all cases, the participants do not themselves believe that they are even part of such a thing as a 'thought collective'. That is one of the essential features of the collective.


"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Feb 17th, 2015 at 11:08:46 AM EST
[ Parent ]
The problem started when we began calling "social studies" "social sciences."  It didn't make them any more scientific, which they aren't; it just allowed their priesthoods to apply pseudo-scientific methods to give their cult rituals a patina of legitimacy and authority.  Science may produce thought collectives, but all pseudo-science can produce is groupthink.
by rifek on Sat Feb 21st, 2015 at 04:19:14 PM EST
[ Parent ]
The first rule of the thought collective is you don't talk about the thought collective.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 21st, 2015 at 04:43:00 PM EST
[ Parent ]
One of them may be (although mostly financial calculations), but not the other. Still, you spend years in the UK working in the financial sector and chances are that you will pick some of the bad habits.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 14th, 2015 at 12:50:47 PM EST
[ Parent ]
I have yet to figure out the "silly promise" issue.  When has anyone ever gotten elected without making silly promises?
by rifek on Sat Feb 21st, 2015 at 02:45:47 PM EST
[ Parent ]
The "memorandum" is a "pyramid scheme"
The term "Ponzi financing" of Minsky's theory describes the situation well.
by das monde on Fri Feb 13th, 2015 at 08:54:54 PM EST
Big h/t to Talos, of course.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sat Feb 14th, 2015 at 12:06:38 AM EST
Mr. Kotzias also briefed Mr. Kerry on Greece's firm will to reach an agreement with its partners on a programme that will end austerity, meet  the country's reform needs, confront the humanitarian crisis and support the reconstruction of the National Economy. Mr. Kerry reiterated the support of the U.S. for the success of the efforts of Greece, with its European partners, to find a mutually acceptable programme for exiting the crisis.


A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 15th, 2015 at 05:20:58 AM EST
A German comments on Ekathimerini
Now to the other side of the story: the German public expected the 240-billion-euro bailout to go into poor mothers' pensions and secure the jobs of Greek fishermen. We now learn that none of that money appears to have trickled down to them; that poor mothers stand in church lines for soup, that a million Greeks no longer have health insurance, that about 50 percent of the youth remains jobless and that the money, once again, has only ensured the survival of the elite.

This is not the outcome we Germans wanted for Greece - I am convinced of that. The money was meant for real people in real families, with real social and societal relations, for a real country, a real nation, for real friends and partners.

My first reaction was "where have you been?". Then I realised that the answer is "reading the German press". Maybe SYRIZA will have an effect thanks to comments like this from Tsipras and Varoufakis, which, unlike comments on the debt, are not being contradicted by other politicians.
by gk (gk (gk quattro due due sette @gmail.com)) on Sun Feb 15th, 2015 at 11:40:06 AM EST
What "other side of the story"? It seems to me he just gives two different German sides to the story...
By nature, the perception in Germany is different from that in Greece: The Greeks wanted to be part of the eurozone and snuck their way in at a time when the country was not ready for the common currency. Once they had entered, they could borrow money at lower interest rates, based on conditions that did not reflect Greece's true credit-worthiness. All this was intensified by the antics of corrupt elites, which feasted on the country's precarious economic situation for years.

Of course this is just one side of the story but it is crucial: Europe in general and Germany in particular is not responsible for the plight that has befallen the Greeks.

Now to the other side of the story: the German public expected the 240-billion-euro bailout to go into poor mothers' pensions and secure the jobs of Greek fishermen. We now learn that none of that money appears to have trickled down to them; that poor mothers stand in church lines for soup, that a million Greeks no longer have health insurance, that about 50 percent of the youth remains jobless and that the money, once again, has only ensured the survival of the elite.

Am I reading this wrong?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 15th, 2015 at 03:52:55 PM EST
[ Parent ]
"We now learn that none of that money appears to have trickled down to them;"

now? That would be mid 2010?

by IM on Sun Feb 15th, 2015 at 04:02:55 PM EST
[ Parent ]
No. But the point is that they can't ignore the "other side" any more (and somebody even put it in the headline).
by gk (gk (gk quattro due due sette @gmail.com)) on Sun Feb 15th, 2015 at 11:25:15 PM EST
[ Parent ]
What "other side of the story"?

He appears to be a two handed debater: on the one hand, this, and on the other that. But the two hands are both
German. And guilt is still guilt and is still Greek. Honest, us good Germans had no idea it was hurting so much.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Feb 15th, 2015 at 11:27:45 PM EST
[ Parent ]
"We had no idea where all the Jews in the neighborhood were going."  "We had no idea the money was not trickling down even though we could see the problem every time we vacationed in Greece."  "We had no idea Germany was externalizing its reunification and trade balance costs by cramming debt down the throats of those lazy southerners."  A lot of willful ignorance in the Fatherland.
by rifek on Sat Feb 21st, 2015 at 04:27:13 PM EST
[ Parent ]
This is what the Greek negotiations are really about for Germany:
Germany wants Greece to stay in the eurozone, but not at any price. "If we go deeper into the [debt] discount debate, there will be no more reforms in Europe," said a senior German official. "There will be joyful celebrations in the Elysée and probably in Rome, too, if we go down this path."

Berlin wants Greece to open Monday's meeting by laying out its plans, explaining how they fit the existing programme and what finance Athens will rely on from March 1. A second senior German official said Athens could secure policy concessions and financial support, but only "in the framework of the current agreement".

"There will be a compromise. I don't reject that. I'm rejecting someone throwing a bomb into the European Commission [which plays a central role in the rescue programme] and taking it hostage," the official added.

I see little cause for optimism.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Sun Feb 15th, 2015 at 03:59:25 PM EST
The confluence of events, Germany's uptick in the economy last qtr., the lack of rising interest rates on bonds for other periphery countries, QE, the drop in Greece's economy, all give reason to Germany to stick to its guns and risk a Greek exit from the euro.
by Upstate NY on Sun Feb 15th, 2015 at 04:32:09 PM EST
[ Parent ]
by das monde on Sun Feb 15th, 2015 at 09:00:35 PM EST
[ Parent ]
Paul Krugman: Weimar and Greece, Continued
there's a peculiar selectivity in the use of Weimar as cautionary tale: it's always about the hyperinflation of 1923, never about the deflationary effects of the gold standard and austerity in 1930-32, which is, you know, what brought you-know-who to power.

But that's not the only piece of Weimar history that has gone missing; there was also the reparations issue, which [...] has considerable bearing on the issue of how large a primary surplus Greece must run.

Thinking about this led me to an interesting question. We know that part of the reason large postwar reparations were such an unreasonable and irresponsible demand was the dire, shrunken state of the German economy after World War I. So how does Greece compare?


by das monde on Sun Feb 15th, 2015 at 09:19:23 PM EST
COMMON MARKET RESOLVES DISPUTE ON ITS EXPANSION
BRUSSELS, March 30  [1985]

European leaders resolved a bitter financial dispute with Greece today, paving the way for Spain and Portugal to join the Common Market at the start of next year.

Prime Minister Andreas Papandreou of Greece had threatened to veto an agreement reached this week on Iberian membership unless the other nine members gave Greek farmers $2 billion in special subsidies to help them compete with Spain and Portugal.

But after two days of negotiations at a European Economic Community meeting here, Greece was persuaded to accept about $1.4 billion in new agricultural aid in return for lifting its veto threat.

by das monde on Sun Feb 15th, 2015 at 10:56:04 PM EST
Yup, that's the new Spanish government talking point.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue Feb 17th, 2015 at 05:30:19 PM EST
[ Parent ]


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