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I'm starting to think the Eurogroup might actually be an amateur night clown parade that has managed on bluff, bluster and congenial local oligarchs up to this point, rather than any real talent or aptitude for serious negotiation.

Well, duh.

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 Carrie (migeru at eurotrib dot com) on Wed Feb 25th, 2015 at 05:51:31 PM EST
[ Parent ]

Re: Who did what? (4.00 / 3)

No, that's not a given. You would expect people like finance ministers to be very, very good at negotiation, and a complete clown parade on the macroeconomic substance.

This indicates (if my tea-leaf reading is correct) that the Eurozone FinMins are incompetent in their core competency, politics. Not just in some ancillary nice-to-have skill set, like policy.

I think that is surprising.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Feb 25th, 2015 at 05:55:43 PM EST
[ Parent ]

And I think you are speculating on the basis of a too positive interpretation. I don't think there is a serious disagreement between the Troika (Lagarde was present at the Eurogroup talks anyway), instead, they are already setting the tone for further demands in April.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Wed Feb 25th, 2015 at 06:01:00 PM EST
[ Parent ]

Re: Who did what? (4.00 / 8)

The division might have been more on tactical grounds than on substance. Schäuble and the Spaniards wanted to smash Greece down immediately and publicly. The IMF doesn't care as long as the working class is crushed and the looting continues and mostly takes orders from the Americans anyway. The ECB council probably acts like an extension of the states so tended toward the immediate crushing side. No idea what Draghi thinks. Can he write assessments on his own or does he need approval? The Americans want this to go away before it gets in the way of their pissing match with the Russians.
The only one sorta reliable in the Greek corner seems to be Junker, presumably to spite Angela, but while both the Moscovici draft and the Commission being the first one out of the gate with their assessment helped immensely he has no money.

Looking at the people standing at the sidelines we have the European Social Democrats doing their usual thing, most leftists seeing Tony Blair behind every boulder (and who can blame them?), Putin trolling a bit as is his wont and the press foaming.

Most lynch mobs are somewhat disorganised.

by generic on Wed Feb 25th, 2015 at 07:06:50 PM EST
[ Parent ]

Greek Finance Minister Varoufakis Wants Austerity ... for the Rich - Truthdig

generic:

Schäuble and the Spaniards wanted to smash Greece down immediately and publicly. The IMF doesn't care as long as the working class is crushed and the looting continues

Michael Hudson agrees:

Remember a few years ago when Europe said, Greece owes 50 billion euros in foreign debt? Well, it turned out that the central bank had given to the Greek parties a list called the Lagarde list (for Christine Lagarde, head of the IMF) of all of the tax dodgers, Greek tax dodgers who had Swiss bank accounts. Well, the Swiss bank accounts that the tax dodgers had ended up to about 50 billion euros. So Greece could pay off the debt that it's borrowed simply by moving against the tax dodgers.
But, of course, this would be at the expense of the Swiss banks and the other banks. So in effect the banks would be paying themselves. And they don't want to pay themselves. They want to squeeze it out of labor and let the tax dodgers and the Greek tycoons succeed in stealing the money from the government. So, in effect, the troika--not the troika, the finance ministers, really, are backing the tax dodgers and the crooks in Greece that SYRIZA is trying to move against, whereas the IMF is actually, for once, taking a softer position towards the whole thing. And even President Obama has chimed in by apparently calling German Prime Minister Merkel and saying, look, you can't just push austerity beyond the point, because you're going to push them out of the euro, and you'll push them out of the euro on SYRIZA's terms, where SYRIZA can then turn to the Greek population and say, wait a minute, we did what we promised here. We stopped the austerity. We didn't withdraw from the euro; we were driven out as part of the class war.
PERIES: Michael, earlier you were also making an analogy between what's going on in Greece and what happened to Cuba [crosstalk]
HUDSON: Cuba under Castro had an alternative social system. He wanted to spread the wealth around (it was a Marxist system) in his way. He wanted to get rid of really the crooks around Batista who were running the country, the rich who didn't pay taxes, and he wanted to have a social revolution there. So the American government said, wait a minute, if Cuba succeeds, then they're going to be a revolution all throughout Latin America. Latin Americans can realize, wait a minute, we can take over the American sugar companies there, we can take over the American banana companies there, we can make the rich pay the taxes and the corporations pay the taxes and the exporters pay the taxes, not simply the labor. We can unionize labor, we can educate it, and if Cuba can educate labor, that would be a disaster for the neoliberal plan, because if labor's educated and has a program, then it'll realize that there is an alternative to Thatcherism.

'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 Wed Feb 25th, 2015 at 07:28:20 PM EST
[ Parent ]

...the central bank had given to the Greek parties a list called the Lagarde list (for Christine Lagarde, head of the IMF)...
...So, in effect, the troika--not the troika, the finance ministers, really, are backing the tax dodgers and the crooks in Greece that SYRIZA is trying to move against, whereas the IMF is actually, for once, taking a softer position towards the whole thing...

To clear up his misunderstanding: when the Lagarde list was born in 2010, Lagarde was still the finance minister of France, not yet the head of the IMF. So the list wasn't a sign of the IMF's softness at all; and, as told in the Die Zeit article discussed upthread, it was just the IMF's bureaucrats who advised the Greek government against bringing charges against the tax cheats.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 26th, 2015 at 05:38:34 AM EST
[ Parent ]

I found he myth of "good" IMF perplexing anyway. They also take much higher interest rates.

by IM on Thu Feb 26th, 2015 at 06:41:38 AM EST
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I think the reason is that its research division produces papers showing that the IMF's policies can not achieve its stated goals. That this had no influence on the policies is something that is easily missed.

by generic on Thu Feb 26th, 2015 at 06:45:51 AM EST
[ Parent ]

Another reason is that the EU (ECB, Council, Commission) public discussion focused on debt service and budget cuts rather than the substance of the "reforms" enforced at gunpoint, and not just the IMF research division but the IMF top leadership was more flexible on that. Then again, Poul Thomsen and his fellow IMF bureaucrats would never have been able to exert the level of influence they have without the perpetuation of the depression by the austerians, so making the IMF worse than the others is wrong too.

_{*Lunatic*, n.

One whose delusions are out of fashion.}

by DoDo on Thu Feb 26th, 2015 at 07:03:52 AM EST
[ Parent ]

Greece's fate: In Angela Merkel's hands? - Fortune

Another reason is that the EU (ECB, Council, Commission) public discussion focused on debt service and budget cuts rather than the substance of the "reforms" enforced at gunpoint, and not just the IMF research division but the IMF top leadership was more flexible on that.

This may be the reason why IMF was left out. Finance ministers fear debt cuts because they don't want to sell them to voters while compromizing on "reforms" won't cost them anything. Not having IMF in let them choose whether to compromize on debt or on reforms.

by Jute on Thu Feb 26th, 2015 at 11:43:41 AM EST
[ Parent ]

Re: Who did what? (4.00 / 6)

For Galbraith, the lack of coordination on the European side was shocking. "I'm an old Congressional staffer," he says. "To watch an official body function in this slipshod and ad hoc way, to watch the Eurogroup and the way things were done, was really a revelation."

by generic on Wed Feb 25th, 2015 at 06:03:03 PM EST
[ Parent ]

They encountered the first contrarian test, real tense negotiations in years.

by das monde on Wed Feb 25th, 2015 at 06:28:41 PM EST
[ Parent ]

Dijsselbloem has always seemed to me to be a complete idiot when it comes to the business of actually negotiating an agreement whilst I was impressed by Tspiras and Varoufakis intellectual skills if unsure about their negotiating prowess. I would characterize the outcome as an away draw for the Greeks, with the return leg to be fought on territory Syriza will be more comfortable with - the actual implementation of practical measures to improve tax collection and economic growth.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Feb 25th, 2015 at 07:16:11 PM EST
[ Parent ]

Re: Who did what? (4.00 / 8)

I was impressed by Tspiras and Varoufakis intellectual skills if unsure about their negotiating prowess

I beg to disagree. It was guerilla warfare and the way Varoufakis used the press was brilliant. A thousand ambushes where you kill two at a time and the run away. You can't afford to lose two as well. To others it seems like tou retreated, hence a loss, when in fact over the long run attrition takes a bigger toll on the other side.
On the other hand, Tsipras stayed in the shadows and lo and behold, a 40yr old untested politician gained statesman status in the eyes of his people and many others.

by Euroliberal on Thu Feb 26th, 2015 at 04:17:31 AM EST
[ Parent ]

Varoufakis certainly seemed to nonplus Dijsselbloem et al. But negotiating prowess is all about building up relationships over the longer term - not just a few quick wins gained by guerrilla tactics. In the longer term they will be waiting for him in the long grass if he has made any enemies. The next phase is about building trust, not ambushing people.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 26th, 2015 at 04:27:02 AM EST
[ Parent ]

The next phase is about building trust, not ambushing people.

Which is why

The next phase is about building trust, not ambushing people.

Right.

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 Carrie (migeru at eurotrib dot com) on Thu Feb 26th, 2015 at 04:56:00 AM EST
[ Parent ]

I'm not sure I understand this post

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 26th, 2015 at 11:43:45 AM EST
[ Parent ]

Re: Who did what? (none / 1)

Of course not, I meant

The next phase is about building trust, not ambushing people.

because

In the longer term they will be waiting for him in the long grass if he has made any enemies.

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 Carrie (migeru at eurotrib dot com) on Thu Feb 26th, 2015 at 11:51:46 AM EST
[ Parent ]

Re: Who did what? (4.00 / 6)

The problem is that Greece has been negotiating for 5 years already. And losing. They have never taken to the press.

Whereas the press has received thousands of leaks about the negotiations from the Eurogroup.

Also, the person who was most in charge in those years, Yanis Stournaras (though he belongs to another party) is actually close friends with people like Varoufakis. They are academic colleagues in the same department. Even better, Stournaras actually gave Varoufakis his first job out of his advanced degree.

In other words, Varoufakis had inside information about the actual fault lines.

Greece had played things under the vest for 5 years. Going public with your arguments was the exact thing that put fear into the Eurogroup, it was something out of their control.

I don't actually believe Schauble revels in his image, and his uncharacteristic schaudenfreude of the last week (which was weird, since the Greek public really approves of Syriza) was a sign that the public battles were evidently making a difference.

by Upstate NY on Thu Feb 26th, 2015 at 09:25:01 AM EST
[ Parent ]

Re: Who did what? (4.00 / 3)

It seems to me that Schäuble is Merkel's designated attack dog. She called him off at the end, to enable an agreement to be signed. If that's the case, he has played the role with remarkable abnegation.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Thu Feb 26th, 2015 at 09:28:02 AM EST
[ Parent ]

I don't know the German political scene at all, but I could imagine there being acute embarrassment, even in conservative circles, at being seen as the enforcers of Greek impoverishment. The whole point of austerenomics is to be at one remove from the real action - with local todies carrying the blame - and when Varoufakis went public, they knew that game was up.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 26th, 2015 at 11:42:09 AM EST
[ Parent ]

The Greek government has a huge advantage in that they are complete outsiders. Insurgents who have come from nowhere, ill-dressed and ill-mannered, and who don't feel constrained by the rules.

I feel that they have been remarkably disciplined in not publicly dissing previous governments who got Greece into its current pickle. This is no doubt important for the home audience, and of course because it won't get them any credit in negotiations. Still, it must be hard. However, their interlocutors have seemed surprised (or have faked surprise) at the fact that they should dare to repudiate elements contractualised with their predecessors.

A new generation of Euro politicians... let's hope there are more coming.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Thu Feb 26th, 2015 at 12:00:47 PM EST
[ Parent ]

The point about the EU elite being used to operating through leaks and being thrown off by Varoufakis going public was also made by Paul Mason last week: Leak and counter-leak: how not to achieve a Greek deal.

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 Carrie (migeru at eurotrib dot com) on Thu Feb 26th, 2015 at 09:47:39 AM EST
[ Parent ]

Re: Who did what? (4.00 / 3)

In the longer term they will be waiting for him in the long grass if he has made any enemies. The next phase is about building trust, not ambushing people.

Varoufakis needs tactical victories right here, right now, or he won't have any "long term" to worry about.

In the long term, Greece can afford to have Varoufakis take the fall for their guerrilla tactics, as long as he wins enough fights first.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 26th, 2015 at 05:34:38 PM EST
[ Parent ]

Re: Who did what? (4.00 / 7)

You would expect people like finance ministers to be very, very good at negotiation

I wouldn't. Most countries are like the UK - ministers get jobs as rewards for party loyalty, not because of any obvious competence.

In the British system, you're expected to become an instant expert on transport, or health, or the entire economy, or even on being Prime Minister, even though you have no experience and no relevant qualifications - except knowing how to shout a bit, score cheap points in a debate, and perhaps collect cash as a 'consultant.'

So, farce it is.

The socially-aware post-war consensus was a brief exception to the usual endemic and virulent greed that has run Europe's politics since the Middle Ages, and US politics since before the War of Independence.

It's not actually a surprise that most policy makes no sense, and appears to be chosen for the immediate personal gain of the policy authors - because that's exactly what's happening.

The terrifying thing about Varoufakis and Tsipras is that they don't seem to be like this. This must absolutely enrage the IMF, etc, because they're having to deal with people who not only have professor-level insight and experience, but also come equipped with moral principles that aren't bounded by simple reptilian greed.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Feb 25th, 2015 at 07:30:04 PM EST
[ Parent ]

The Cabinet making process (4.00 / 2)

I don't know the precise situation in other European countries, but the cabinet making process in Ireland and (I think) the UK is an absolute joke. Over a matter of a few hours the prime Minister designate calls in the favoured parliamentarians and tells them he is making them minister for such and such. The actual portfolio allocated may have no bearing on actual prior knowledge, experience, or stated preferences. It often is explicitly not the brief the relevant parliamentarian covered in opposition - lest his/her statements in opposition might come to haunt him as Minister. Sometimes some appointee has a hissy fit regarding their allocated portfolio and a hasty re-shuffle ensues.

The whole process ensures most ministers, however able, are almost complete novices in their newly allocated policy area and are the easy sitting ducks for experienced civil servants who have spent a lifetime in that area and who can easily browbeat their Minister into their preferred policy positions. By the time the Minister becomes sufficiently proficient in a policy area to challenge his/her civil servants, they are reshuffled to a new portfolio...

And so the veneer of democracy is maintained whilst the real Government is carried out by career civil servants with very privileged pay and pensions provisions that are higher than in the rest of Europe. Sometimes they even sabotage a Minister who is proving "difficult" with wrong, partial, or downright mis-information. Because of the the archaic tradition that Ministers are responsible for everything that happens in their department, it is the Minister who must fall on his sword whilst the Civil servants smile in the background. Not that there is much of a tradition of Irish Ministers falling on their swords no matter how egregrious their mistakes...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Feb 26th, 2015 at 12:02:22 PM EST
[ Parent ]

You would expect most ministers to be party political animals, adept at survival, backstabbing and passing the buck. Just look at how Merkel survives by not opening her mouth until the last moment, and how she (and the entire EU neighbourhood policy apparatus) completely fucked up on Ukraine.

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 Carrie (migeru at eurotrib dot com) on Thu Feb 26th, 2015 at 05:01:08 AM EST
[ Parent ]

Macro?

(That's ET macro, not econo-macro.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Feb 25th, 2015 at 07:15:48 PM EST
[ Parent ]