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by Frank Schnittger
Wed Jan 20th, 2016 at 08:00:53 PM EST
I've long held the somewhat controversial view that political analysis is only as good as its ability to make verifiable or falsifiable predictions about the future course of events and thus have tended to be impatient with those sorts of "on the one hand, and on the other" analyses which can allow the analyst to claim vindication regardless of the outcome. If nothing else, clear predictions can allow a better understanding of underlying assumptions and a gauging of ones own ignorance.
So here goes, my predictions for 2016, which I am happy to see disputed, and ultimately proved wrong if only to improve my understanding of underlying trends.
- Fine Gael will score a resounding victory in the Irish general election compared to current polls which will nevertheless see them some way short of an overall majority and thus requiring Labour or perhaps some independent/small party support to form the next Government. Labour will do badly, Sinn Fein will fail to make a decisive breakthrough, and Fianna Fail will tread water.
- David Cameron will succeed in avoiding Brexit despite the increasing unpopularity of the EU and a failure, on his part, to secure dramatic concessions from the EU as part of his renegotiation strategy. However the result will be close and test his marketing skills to the limit. Paradoxically, Labour's Jeremy Corbyn will come out of the campaign with his reputation and standing in the polls enhanced.
- A combination of low oil prices, low interest rates, and low Euro valuations will allow the EU economy to slowly recover despite quite a few external shocks in the shape of the refugee crisis, terrorist atrocities, and a slowdown in China and emerging markets. Even peripheral countries like Greece, Spain and Portugal will recover somewhat off a low base, and Ireland will experience another year of near Celtic Tiger like growth.
- Donald Trump will win a resounding victory in the Republican Primary elections and probably nominate someone like Ohio Governor John Kasich as his VP pick in order to re-unify the party ahead of the General Election. Somewhat ironically, given the much lower media profile of the Democratic primary elections, Hillary Clinton will struggle to shake off the Vermont Socialist, Bernie Sanders, in the Democratic primary and struggle, initially, to ignite her campaign against Trump. She will end up winning the Presidency resoundingly, however, with an increasingly popular President Obama's support, and probably lead the Democrats to victory in the Senate (and currently implausibly) in the Congressional elections as well.
- Climate change will continue to wreck havoc with extreme weather events causing ever greater economic and social dislocation. Oil and commodity dependent economies in the middle east, Africa and Russia will struggle and political instability will increase world wide with some regional conflicts re-igniting as elites seek to distract their polities from economic hardships. Netanyahu might do something seriously stupid to try and preempt Iran' rise as a regional power and Syria will continue to be an unresolved humanitarian disaster.
Discuss. Perhaps you can add your own predictions.
by Frank Schnittger
Wed Dec 30th, 2015 at 08:56:48 AM EST
The Irish General Election is expected to be called shortly for the end of February with the Government Parties of Fine Gael (Christian Democrat) and Labour (Socialist) fighting for re-election against Fianna Fail, Sinn Fein and a plethora of Independents and smaller parties who currently make up c. 20% of the seats in the Dail.
The election takes place against a backdrop of significant economic revival with growth for 2015 expected to come in at around 7% of GDP (by far the highest in Europe), unemployment declining from 15.2 to 8.8% since January 2012, the public sector deficit declining from 12% of GDP to a cash balance in 2015, and the Debt/GDP ratio declining from a peak of over 120% to less than 100%.
Ordinarily, such a rapid turnaround in Ireland's economic fortunes could be expected to result in a Government being returned to office, but there are also significant residues of resentment against the Government due to their policies of cutting public expenditure and introducing new taxes such as water charges, property taxes and universal social charges.
In addition, the recovery is still very Dublin centric with many of the more rural parts of the country feeling little benefit. Many families have suffered from unemployment, emigration, depressed wages, higher taxes, homelessness, negative equity and the threat of mortgage foreclosure. Many have also been effected by cuts in social and health services for the sick and disabled.
by Frank Schnittger
Sun Oct 11th, 2015 at 02:11:18 PM EST
OK, I don't want to crow too much but Ireland were unfortunate to win by only 15 points and lose three of their best players to injury - Sexton, O'Connell and O'Mahoney - three of the main leaders of the team. The match confirmed my prior prognostications that Ireland are now a better team than that which won the last two 6 Nations titles. Not only that, but all 8 substitutes played their part and added something positive to the team performance - something that would never have been the case in the past.
For France it is a demoralising defeat, the third time in a row that they have now lost to Ireland - and they have not beaten Ireland in their last five meetings. Ireland had 70% possession and France never looked even close to winning the match never once threatening the Irish try line. Having said all of that, France are still a very good side, and could well embarrass the All Blacks in the quarter-final.
The Quarter final match-ups have now been decided:
South Africa vs. Wales
New Zealand vs. France
Ireland vs. Argentina
Australia versus Scotland
In other words, very much as I predicted with Wales replacing the home nation England. So much for my detractors Eurogreen, Melanchthon et al! That is part of the weakness of Rugby as a world sport: the international pecking order is fairly clearly established and is rarely upset. For all their natural and numerical advantages, France still have some way to go to being a top power in World Rugby.
Having said all that, if O'Connell and Sexton are ruled out of the World Cup, the road ahead will become increasingly difficult for Ireland. Argentina will offer a stern challenge in the quarter final and my prediction that Ireland will proceed to the semi-final is far from a done deal. Nevertheless it has beeen a good week for Irish sport - beating world champions Germany in the European Cup qualifying was another highlight. If things get much better than this, I can see Prime Minister, Enda Kenny, calling a snap general election in November rather than the expected date in early spring...
by Frank Schnittger
Mon Oct 5th, 2015 at 07:32:37 AM EST
England, despite home advantage, have crashed out of the World Cup beaten by their own expectations and two very good Wales and Australia performances. Some crunch matches remain - notably Australia vs. Wales and France vs. Ireland to see who wins their respective pools and thus how, exactly, the quarter-finalists will match up. But the likelihood of an upset is now very small and only Japan, of the Tier 2 nations, have a realistic chance of progressing if they beat the USA and Scotland fail to beat Samoa.
The Quarter-finalists will thus likely be very much as I predicted in Rugby World Cup with Wales replacing England. Hardly a shock result as results between them have tended to be 50:50. What is remarkable is that Wales have achieved this despite losing 6 of their best backs to injury. Good team management, spirit, cohesion and tactical nous still counts for a lot in rugby. However after Australia's convincing win against England, it is hard to bet against them beating Wales and winning the pool. Both France and Ireland have been under-whelming to date, so it will be interesting to see who comes out on top on Sunday 11th. October.
by Frank Schnittger
Thu Sep 24th, 2015 at 01:28:21 PM EST
OK, so I know that Eurotrib.com isn't exactly a hotbed of sports fans, never mind professional rugby fans. But who amongst us is perfect? I've long been an armchair rugby supporter even though my own experience of the game is decidedly limited and mixed. So for the very afew readers here with a passing interest in rugby, what follows is my take on the Rugby World Cup which has just gotten under way.
- Although World Rugby Limited (the Governing Body) like to claim the Rugby World Cup is the third biggest sporting event that ever takes place on this planet, rugby still has relatively limited appeal. Only four countries (New Zealand, Australia, South Africa and England) have ever won the quadrennial World Cup in its 28 year history, and there are, at most, 7 or 8 countries with any realistic prospect of winning the Cup, and anything other than a New Zealand win this time around would be an upset.
- The fact that a "second tier" nation (Japan) has actually beaten one of the major powers (South Africa) in this years tournament is, already, one of the greatest shocks of World Cup history. Of course the playing schedule, designed to suit the "tier 1 nations", then immediately pitted the Japanese against an improving Scottish team with only three rest days in between. Not surprisingly, Japan then lost to a team much less accomplished than South Africa. Rugby is a much more physical game than soccer, and it simply isn't possible to peak for two games in a row within 5 days. Professional boxers, by way of comparison, often only have 2 or 3 fights in a year.
- If you want to predict the relative standard of each rugby playing nation, the following table is instructive:
New Zealand outperforms based on its player numbers because it is the no. 1 sport in New Zealand, and practically defines New Zealand's identity, whereas, say, in Ireland, Rugby is only the no. 3 or 4 sport, behind Gaelic football, Soccer, and Hurling.
4. The other key determinant of playing standard is whether a country can support or participate in a professional club league. New Zealand, South Africa, France and England have their own fully professional indigenous leagues whereas the Celtic Nations, Italy and Australia have a share in multi-national professional leagues.
5. Overall, however, there are only a few hundred fully professional players in even the leading nations, with the vast bulk of the players being amateurs. And even the top professional players only earn in a year what a top soccer player can earn in a week. Players in many nations like the Pacific islands or eastern Europe have to migrate to New Zealand, Australia, France or England to earn a living, and often end up playing international rugby for their adopted country. The advent of professionalism in the 1990's has therefore only served to accentuate the divide between the leading and second tier nations.
So who is going to win this year's tournament? If you can't contain your excitement, please follow me below the divide...
by Frank Schnittger
Wed Jul 22nd, 2015 at 12:46:29 PM EST
Microsoft is one of the most successful corporations in the world, having blazed the trail for personal computing and making its founder, Bill Gates the World's richest man. Windows has become almost ubiquitous on PCs and laptops and MS Office is the office productivity tool of choice for most business and personal users. But what has Microsoft accomplished in the last 20 years beyond leveraging its early mover advantage and dominant position in PC computing? I would argue very little, and I would like to invite you to argue otherwise. But first a little personal personal computing history...
Back around 1990 I was given responsibility for end-user computing in part of the business I was working in, although nobody quite knew what that meant at the time. WordPerfect had just replaced Multimate as the corporate standard word processor, and Lotus 123 was replacing earlier micromodelling programmes used by accountants and other business analysts. The truly adventurous management consultant types started giving management presentations using Lotus Freelance and some had even used DBaseIII for rudimentary database applications.
by Frank Schnittger
Mon Jul 20th, 2015 at 08:56:41 AM EST
Now that the EU has effectively taken over the running of Greece, it follows, logically, that it should also be held responsible for the outcome of its policies. So what happens if Greece goes further into even deeper recession, the debt becomes even more unsustainable, and the "reforms" do not bring about the turnaround in economic performances that neo-liberal economic "theory" says they will?
It's those lazy Greeks of course! It's the untrustworthy left wing Government that didn't implement the reforms properly! And the slightest upward blip in performance will be treated as overwhelming proof that "the reforms are working" whilst the widespread evidence of poverty and decline will be ignored.
And what will the European "left" do then? The maiden speech by 20 year old Scottish MP, Mhairi Black, is instructive (h/t Helen).
Parties which have lost touch with the growing under classes in our societies have no idea what is really going on. Perhaps a "study group" of high ranking politicians will visit Greece; stay in 5 star hotels, listen to a few think tank presentations, talk to a few waiters, and declare all is well.
After all the people living on the street don't vote and don't really count.
Meanwhile Schäuble is playing a clever game. By floating the negotiated Grexit option and declaring his lack of confidence in the "reform" programme, he is insulating himself and his government from criticisms that austerity doesn't work when the economy shrinks further and the debt becomes even more unsustainable. "We told you so", we offered you the Grexit option but you turned us down!
Apparently Schäuble has discovered that debt write-downs aren't legal within the Eurozone. But what about the debt write-down in 2010? Can only banks write down debts? So why were banking debts transformed into sovereign debts then? To make a further write-down impossible? But it was the banks which Greece borrowed from. What the banks did later to lay off their responsibilities isn't Greece's problem.
Meanwhile Merkel is trying to play good cop to Schšuble's bad cop. It's not going well...
by Frank Schnittger
Mon Jul 13th, 2015 at 06:38:45 AM EST
Killing the European Project - The New York Times
Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.
Even if all of that is true, this Eurogroup list of demands is madness. The trending hashtag ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief. It is, presumably, meant to be an offer Greece canít accept; but even so, itís a grotesque betrayal of everything the European project was supposed to stand for.
Can anything pull Europe back from the brink? Word is that Mario Draghi is trying to reintroduce some sanity, that Hollande is finally showing a bit of the pushback against German morality-play economics that he so signally failed to supply in the past. But much of the damage has already been done. Who will ever trust Germanyís good intentions after this?
In a way, the economics have almost become secondary. But still, letís be clear: what weíve learned these past couple of weeks is that being a member of the eurozone means that the creditors can destroy your economy if you step out of line. This has no bearing at all on the underlying economics of austerity. Itís as true as ever that imposing harsh austerity without debt relief is a doomed policy no matter how willing the country is to accept suffering. And this in turn means that even a complete Greek capitulation would be a dead end.
Can Greece pull off a successful exit? Will Germany try to block a recovery? (Sorry, but thatís the kind of thing we must now ask.)
The European project ó a project I have always praised and supported ó has just been dealt a terrible, perhaps fatal blow. And whatever you think of Syriza, or Greece, it wasnít the Greeks who did it.
by Frank Schnittger
Mon Jul 6th, 2015 at 06:54:10 AM EST
When I wrote Beware of Greeks bearing gifts: a study in negotiating styles, it was because I had grave doubts that Yanis Varoufakis' negotiating style would yield the kind of results he sought. Of course I had even graver doubts that any kind of negotiating style would yield a reasonable result for Greece, and so that question was essentially moot: We where heading for a diplomatic disaster one way or the other. The neo-liberal fantasy of austerian "reform" was simply too deeply embedded in the culture of the EU governing elite for a successful outcome to be possible.
It is as yet unclear whether the Greek referendum result will prompt a fundamental re-think on the part of the EU elite. Merkel's hastily arranged visit to Hollande at least provides a signal that there is some awareness that a new approach is required. Krugman encapsulates the EU dilemma nicely: Ending Greece's Bleeding - The New York Times
The [European] central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn't it will effectively force Greece into introducing a new currency.
Specifically, if the money doesn't start flowing from Frankfurt (the headquarters of the central bank), Greece will have no choice but to start paying wages and pensions with i.o.u.s, which will de facto be a parallel currency -- and which might soon turn into the new drachma.
Suppose, on the other hand, that the central bank does resume normal lending, and the banking crisis eases. That still leaves the question of how to restore economic growth.
In the failed negotiations that led up to Sunday's referendum, the central sticking point was Greece's demand for permanent debt relief, to remove the cloud hanging over its economy. The troika -- the institutions representing creditor interests -- refused, even though we now know that one member of the troika, the International Monetary Fund, had concluded independently that Greece's debt cannot be paid. But will they reconsider now that the attempt to drive the governing leftist coalition from office has failed?
I have no idea -- and in any case there is now a strong argument that Greek exit from the euro is the best of bad options. Imagine, for a moment, that Greece had never adopted the euro, that it had merely fixed the value of the drachma in terms of euros. What would basic economic analysis say it should do now? The answer, overwhelmingly, would be that it should devalue -- let the drachma's value drop, both to encourage exports and to break out of the cycle of deflation.
The problem with any negotiating style is that if you as negotiator become an issue, you're losing. That is why Corporations and Governments change their key negotiating personnel so regularly. If you become identified with a failure, you become part of that failure, and it doesn't matter how brilliantly you conducted yourself during that debacle.
by Frank Schnittger
Sat Jul 4th, 2015 at 08:10:54 AM EST
Former Irish Taoiseach and EU Ambassador to the US John Bruton lays out the case against the Greek Government fairly succinctly in his article in the Irish Times today (4/7/15). In it he criticises US Nobel prizewinning economists Paul Krugman and Joseph Stiglitz for advocating a NO vote in the Greek referendum.
His arguments may be summarized as follows:
1. "Krugman says the euro was a "terrible mistake" because he claims it failed to insulate the public finances of the states of the euro zone from bubbles in particular countries, like he says the US system does. In fact, the US only does this to a limited extent and, unlike the EU, it has no general bailout fund for states".
In fact Krugman never claimed the US system could prevent housing bubbles and criticized neo-liberal de-regulation "reforms" for making such bubbles more likely. Furthermore, the US Federal budget is 20% of GDP compared to an EU budget of only 1% of GDP and thus Federally funded programmes like Social Welfare, Medicare and Medicaid can do a lot to alleviate the worst effects of (say) a burst housing bubble in Florida on the poorer people in Florida. How much better off would the Greek people be today if they had a social welfare and healthcare system funded by the EU?
by Frank Schnittger
Wed Jul 1st, 2015 at 08:42:43 AM EST
I have been holed up in the Tyrone Guthrie Centre for the past few days at the invitation of an artist friend. It's a rambling old country house on a beautiful wooded lakeside estate set in the drumlin countryside of County Monaghan. Artists of all stripes can stay here (subject to acceptance of application) at state subsidized rates to meet, work, and reflect on their practice. At the moment it is full of quite an eclectic and international mix of novelists, painters, printers, composers and performance artists. The estate was gifted to the people of Ireland by the family of Tyrone Guthrie, a noted theater director in Ireland, England, Canada and the United States.
As a lowly blogger I don't feel particularly qualified to take part in the many informal discussions between artists of wildly different backgrounds, but it did get me thinking about the apparent decline of my own particular art form: the community blog; and more particularly, my favorite platform, the European Tribune. Why have we gone so quiet, and is there anything that can be done about it?
Hidden within the 355 comments on End game for Greece? are a couple of sub-threads which begin to deal with this issue. rz set the ball rolling:
It has become very quite here at the European Tribune. Why is that? Maybe we all feel that things are total spinning out of control and there is nothing left to do about it.
To which rifek replied:
The European discussion is over, everything that matters now happens on the national level.
It could be that the possibility of a solution is so remote, everyone is throwing their hands in the air. That's pretty much the case here in the US (I figure we're a generation away yet from people taking to the streets, although an old-fashioned food shortage could change that in a hurry.). Or it could be that we're in the opposite of an academic debate (where the debates are so bitter because there is so little at stake): The stakes are so high, debate isn't much of a priority. Two men in a burning building can't stop to argue.
And Migeru weighed in:
What is there to discuss? The European Union is institutionally hopeless
Whereas Upstate NY was more upbeat:
There is a silence. But sometimes, from reading you all for years, I also always hear your voices in the silence. ET is special in that way.
I want to try to weave together the many other comments on those sub-threads to come up with an overview of why ET may be in decline, and to come to an initial analysis of what might be done about it, always assuming that community blogging is an art form worth preserving and indeed one which should be developed further.
by Frank Schnittger
Sun Jun 28th, 2015 at 12:07:34 PM EST
Let us assume for the moment that the Greek people reject the Eurogroup ultimatum by an overwhelming margin and that the EU/Troika/Council/EuroGroup continue their childish stance of throwing sand in the face of Tsipras/Varoufakis every time they make a proposal. Let us further assume that despite running a structural primary surplus the Greek Government runs out cash in the near future: so much so that it has to default on its IMF loans and has difficulty paying wages, pensions and contractors.
This will be mainly because the current crisis has further depressed the economy and created a crisis of confidence which will result in the citizenry and businesses hoarding cash thereby depressing tax revenues further. Banks will also struggle for liquidity in the absence of further ELA assistance from the ECB. Thus, even though the state and the banks may still be technically solvent, liquidity will become a huge problem, the more so because the cash cow of the tourist industry appears to be in severe recession.
What will happen then?
by Frank Schnittger
Sat Jun 20th, 2015 at 07:28:18 AM EST
Yanis Varoufakis has an article in today's Irish Times in which he laments the failure of the Eurogroup to listen to his proposals even whilst they themselves have been kept in the dark about what "the Institutions" are proposing. Apparently no substantive discussions took place on what either "the Institutions" or Greece were suggesting as the way forward. A majority of the Eurogroup Ministers appear to have decided, in advance, that Varoufakis is not someone they can "do business with."
But perhaps the finance Ministers couldn't address, never mind resolve, the Greek crisis because at root it isn't a financial crisis, it is a political crisis which effects the whole European project. If this all goes horribly wrong, we will have Greece spinning, out of control, into the Russian orbit run by a military Junta and with politicians such as Varoufakis in exile, jail, or worse.
The EU, meanwhile, will start to fall apart with nationalists governments, led by the UK, doing their best to break it apart. We may not have a major European war any time soon, but the slippery slope will have begun. Meanwhile we will have people starving in the streets and dying en masse for lack of proper medical care.
by Frank Schnittger
Sat May 23rd, 2015 at 07:12:21 AM EST
It looks like Ireland has voted to include a specific provision to legalize same sex marriage in its constitution in the first vote of its kind in the world. Early tallies indicate that the YES side is likely to win in what appears to have been with a very high turn-out election.
The referendum was part of a sequence of referendums on social and moral issues over the past few decades in Ireland's own version of the culture wars which have been fought in many parts of the world. The amendment to the constitution was opposed by the usual suspects in the Catholic Church and assorted right wing pressure groups who sought to turn the vote into a vote on surrogacy and children's rights which were in no way effected by the Amendment itself.
The YES side had feared that a low turnout might enable the NO campaign to win the vote because of the greater propensity of older and more traditional people to vote. However, in what appears to have been an unprecedented mobilization of younger, more secular, and more liberal voters a high turnout now looks the likely outcome. Thousands, including members of my own family, flew home from abroad so that they could vote. (Irish Embassies do not make provision for Irish voters to vote when abroad).
The outcome, if confirmed, could result in a seismic change in Irish politics. Some NO campaigners made no secret of their opposition to the measure because they feared that it might lead to an overturn of the 1983 Referendum which outlawed abortion in Ireland.
I will update this story as more vote counts came in. In the meantime, please feel free to use the comments to discuss the issue. For a list of Referendums to change the Irish Constitution, see here.
[Update] Final Result:
YES: 1,201,647 (62.1%)
No: 734,300 (37.9%)
This is the highest turnout in a Referendum since the 1996 Referendum which removed the constitutional ban on Divorce from the Constitution by a margin of less than 0.6%. Only one of Ireland's 43 constituencies (Roscommon-South Leitrim) voted no by a margin of 49 to 51%.
by Frank Schnittger
Sat Mar 14th, 2015 at 03:39:43 PM EST
UK Prime Minister David Cameron has promised to hold a referendum on the UK's membership of the EU should the Tories win an overall majority at the next election due in May. Never mind that his pledge was mainly to fend off the challenge of UKIP, and that he hopes to have negotiations with the EU in the meantime which might address some of the criticisms many Britons have of the EU. Opinion polls in the UK have been sharply divided on Brexit (with a trend favouring remaining in more recent polls), and any renegotiation of the UK's terms of membership is likely to influence the outcome of the vote.
The fact is however - whether Murdock media inspired or not - that many Britons lack a sense of fellow feeling with their compatriots in EU. They view their security as being guaranteed in large part by the USA and look to the EU as little more than a free trade area with a lot of unwanted immigration and meddling bureaucrats which need to be cut down as much as possible. There appears to be a disconnect between the business elite - generally very much in favour of British membership - and the working and lower middle classes who are much more concerned with the impact of immigration on their job prospects and the social and cultural life of the UK - an impact they blame on the EU, even though net immigration very much predates membership of the EU.
The irony is that there are now more than a million Britons living in France and Spain whose residency status and health care could be severely impacted by Brexit. But many of these don't have a vote, or won't go to the trouble of voting. Some indeed, would vote for UKIP in any case. The little Englander mentality runs deep even in some of those who have made their homes elsewhere. Basically many in the UK want the benefits of being part of a large market without bearing any of the costs of social solidarity which the EU ideal mandates.
It is doubtful whether the implications for expatriates or neighbouring states like Ireland will have a huge bearing on any UK referendum debate. The implications for N. Ireland could be very serious indeed. So much so that the Irish Department of the Taoiseach (Prime Minister) is setting up a specialist unit to consider and prepare for such a development - having stayed studiously neutral and silent on the Scottish independence debate. Follow me below the fold for an initial assessment of what the implications for N. Ireland and Ireland might be.
by Frank Schnittger
Thu Feb 26th, 2015 at 03:29:43 PM EST
I once wrote a diary on the The negotiation Process and even considered making it the topic of a putative Phd. research proposal before deciding that the gulf between academia and practice was too large to bridge: there simply wasn't any good academic literature on the negotiating process that I could find, and no one could be found with the interest and expertise to supervise such a research topic. I raise the topic here because I am fascinated by the negotiating style adopted by Yanis Varoufakis and am still wondering whether he will ultimately be found to have been an effective negotiator on behalf of Greece.
Yanis Varoufakis interview: `Anything's better than austerity'
When asked whether Greece could have achieved more had it adopted a more conciliatory approach at the euro group, as his counterpart Michael Noonan and other Irish Ministers have suggested, Varoufakis delivers an emphatic "absolutely not".
While he declined to respond directly to Noonan's recent comments likening him to a rock star and to academic economists and experts that were very good in theory but not good in practice, he said Greece's previous experience in Brussels meant a robust approach to negotiations was essential.
"My predecessors in this job went along with the eurogroup's policies to the full. They bent over backwards to accommodate the memorandum and the policies of internal devaluation and fiscal consolidation, and the so-called reforms that were imposed on Greece."
And he points to where that has landed Greece. "It has been a complete and utter catastrophe. There's humanitarian crisis is on the boil because they were so `good in practice', this is quoting Michael Noonan. And I hope that I'm not so good in practice."
Regarding Noonan's other criticism that he was too theoretical, the Greek minister says he understands that "my colleagues in the eurogroup were disconcerted that one of their members insisted on talking macroeconomics".
"One of the great ironies of the eurogroup is that there is no macroeconomic discussion. It's all rules-based, as if the rules are God-given and as if the rules can go against the rules of macroeconomics.
"I insisted on talking macroeconomics."
But Varoufakis said he welcomed Noonan's comments, made at a conference in London on Wednesday, that he agreed in principle with the idea of swapping Greece's official debt for growth-linked bonds.
"Michael Noonan is quite right. We need to restructure Greek debt. My proposal for GDP-linked bonds has one purpose: to increase the amount of money we give back to your partners by encouraging them to allow us to grow."
front-paged by afew
by Frank Schnittger
Fri Jan 16th, 2015 at 07:26:47 AM EST
With the Syriza movement led by Alexis Tsipras likely to win next weeks elections in Greece, the possibility of Greece being expelled from the Eurozone, at German insistence, raises its head. We must be clear that Greece does not stand alone in this conflict, and that the German dominated ECB also has some culpability in the continuing crisis. Unfortunately Ireland's national leaders have shown no interest in supporting Greece or any other Eurozone state in this crisis - preferring to gloat in Ireland's own relative success in exiting the bail-out and fearful of rocking the boat at the ECB.
This cozy "national" consensus needs to be challenged. I have sent the following letter to the editors of Irish national newspapers:
Unlike the US Federal Reserve, the European Central Bank has one, and only one self imposed target by which it's performance can be judged: to keep inflation at or just below 2%. It has failed miserably to achieve that target, with the result that those people and nations with large debts have seen their real debt burden increase.
This suits net creditor nations like Germany, but is a disaster for almost everyone else, with deflation likely to lead to increased real indebtedness, recession and perhaps even depression in the rest of the Eurozone.
Lest anyone think this is an accident of history, it is an outcome advocated by some German economists and by many of the German dominated staff in the Frankfurt based ECB itself. Essentially it is a case of the Eurozone being run by Germans in Germany's interest.
And yet no one calls for the resignation of the ECB Board for failing to achieve its one self-declared target, never mind achieving a broader set of economic targets including employment levels like the US Fed. Our leaders seem to be afraid to criticize the ECB in case it might once again threaten to pull the plug on our banking system.
The ECB is the most undemocratic institution in the EU, with Ireland never even having sought representation at Executive Board level. It is time that must change, and it is time our political leaders had the courage to hold our banking masters to account.
The Eurozone must be run in the interests of all Eurozone members, and failing that we must consider acting in our own national interest and leave the Eurozone in concert with other Eurozone members whose economic needs are being ignored.
In further news, the ECB has refused to cooperate with the Irish Parliamentary inquiry into the Irish Banking Bail-out Fiasco which looks like costing Irish taxpayers something north of 40 Billion even if the Bank of Ireland and Allied Irish Bank end up refunding the taxpayer in full - claiming it is accountable only to the European Parliament. When was the last time the European Parliament ever exercised effective supervision over the ECB? Perhaps it is time for all of us to start lobbying our European Parliamentarians...
by Frank Schnittger
Mon Sep 29th, 2014 at 10:48:55 AM EST
In Booman's continuing absence through illness, I have written another diary primarily for a US audience at the Frog Pond. However it deals with a complex subject which I really need help in elucidating. I would appreciate if readers here would point out any errors of fact, or needlessly contentious interpretations, in the comments, as I do not wish to mislead our US readers.
Having written a piece on American Exceptionalism I thought it might be appropriate to turn my attention to the EU, and to try to define what makes it a unique constellation of notionally independent states today. There are many misconceptions about what the EU is and is not, so perhaps some clarification from a citizen of a relatively enthusiastic member state (Ireland) may be helpful in understanding the phenomenon.
The first thing to be said about the EU is that it is in a state of continuous evolution, with different member states pushing that process along at somewhat different speeds and in sometimes quite different directions. That it hasn't all fallen apart (yet) may be regarded as quite an achievement in itself, especially given the the European propensity for fractious nationalism leading to regional and world wars.
But what, positively does the EU stand for?
by Frank Schnittger
Sat Sep 27th, 2014 at 08:45:00 AM EST
Crossposted from the Booman Tribune
Given Steven D's impassioned pleas for content in Booman's continued absence through illness I thought I'd break my vow of Omertà on all things USA which normally applies between Presidential election cycles. You see I have a certain resistance to writing about things I know little about and also have a strong sense that a countries own citizens have the primary right and responsibility to determine its policies free of interference from outsiders - well meaning or otherwise.
I make the exception of Presidential elections and some global issues like human rights and climate change because the election of "the leader of the free world" effects us all dramatically and often traumatically and because the USA state, whatever about its own citizenry, makes no bones about the fact that it regards the whole world as its back yard when it comes to dumping its externalities on others.
I also want to pay tribute to the extent to which Booman has informed my thinking on all matters of US politics. He's up there with Paul Krugman as perhaps the most influential blogger and thinker shaping my world view on key issues of economics (Krugman) and US politics (Booman). Just as I sometimes take issue with Krugman's politics (his recent ham-fisted interventions on Ukraine and Scotland in particular), I sometimes take issue with Booman's take on economics which sometimes seems more influenced by the Chicago School of economics than by Keynes, Krugman, Stiglitz or Piketty.
by Frank Schnittger
Fri Sep 19th, 2014 at 09:39:52 PM EST
Ireland has been producing some fairly decent economic statistics for a couple of years now - despite the general stagnation in the Eurozone and the continuing "consolidation" of the public finances as the Troika imposed austerity plan seeks to reduce the current budget deficit to below 3% by next year. But the latest figures showing 9% GNP growth and 7.7% GDP growth in the last 12 months take the breath away, and even if they prove to be something of an anomaly, would seem to indicate that the Irish economy has reached take-off velocity despite the heavy gravitational pull of public sector spending cuts, a 125% debt to GDP ratio, and stagnant external markets.
About 5% of Irish GNP and GNP can be attributed to the tax avoidance strategies of (mainly US) corporates basing themselves in Ireland for tax purposes, whilst in reality, the vast bulk of their activities take place elsewhere. The
marked divergence between GNP and GDP growth above can also be attributed in large part to the so called "Patent Cliff" which has resulted in a large fall in the value of pharmaceutical exports as blockbuster drugs like Lipator and Viagra come off-patent.
Ireland is the fifth biggest exporter of drugs in the world, and Irish chemical and pharmaceutical exports surged by more than a quarter in the five years to 2011 when they peaked at 56bn, a figure equivalent to almost a third of gross domestic product. But the employment content of those exports is relatively small, and what is clear from these recent figures is that there is a much more broadly based recovery taking place in the Irish economy which is now even making up for the fall in drug export revenues.