Dropping The Pilot: The classical character of Varoufakis’s departure as Greece’s Finance Minister was made even more poignant by the fact that his own personal defeat was announced amidst the echoing tumult of a victory that he, more than anyone, had secured for his people.
“WE OF THE LEFT know how to act collectively with no care for the privileges of office.” How long has it been since a left-wing leader talked like that? Yanis Varoufakis may have used a blogpost to announce his resignation to the world, but the sentiments he expressed were straight out of Homer. Like the hero of an ancient Greek legend, he showed that he understood both the duty he was bound to fulfil, and that he embraced it with a glad heart.
The classical character of Varoufakis’s departure as Greece’s Finance Minister was made even more poignant by the fact that his own personal defeat was announced amidst the echoing tumult of a victory that he, more than anyone, had secured for his people.
Across the whole of Greece, from Thrace in the north to Crete in the south, the Greek people had delivered a resounding “Oxi!” (No!) to the European Union’s demands for never-ending austerity.
Beneath a frenzy of flailing flags, in Athens’ Syntagma Square, tens-of-thousands of supporters of the Syriza Party-led coalition government shouted their defiance of the hated “Troika” (the European Commission, the European Central Bank and the International Monetary Fund). But, even as the Oxi voters celebrated, Prime Minister Alexis Tsipras was delivering the “Eurogroup’s” lethal ultimatum to his Finance Minister.
In Varoufakis’s own words: “Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.”
If, as Troy burned, King Agamemnon had asked Odysseus to appease its tutelary deities by falling on his sword, the shock of injustice and ingratitude could hardly have been greater. But Varoufakis did not demur. “I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.”
And yet, even as he abandoned his portfolio for the back-benches, Varoufakis could not resist one final, parting shot at the European hierarchs who, in their petulant fury, had demanded his political head.
“And I shall wear the creditors’ loathing with pride.”
This undisguised contempt for both the intellect and the character of Greece’s European creditors was, almost certainly, Varoufakis’s hamartia (in Classical Greek literary tradition, the fatal character flaw that causes the hero’s downfall). The son of a wealthy Greek industrialist, Varoufakis was never for a moment overawed by the European Union’s political bureaucrats and bureaucratic politicians. That he was, himself, an accomplished academic economist and author merely heightened his conviction that he had nothing to fear, and even less to learn, from the Eurogroup’s “participants and assorted partners”.
That Varoufakis’s professional analysis of Greece’s economic position was correct (as confirmed by at least two Nobel laureates – Stiglitz and Krugman – and, more recently, by the IMF itself) only made him more insufferable to the likes of Germany’s 72-year-old Finance Minister, Wolfgang Schauble. The hard-working German ant did not appreciate being lectured at by some upstart Greek grasshopper with a PhD – and no neckties.
Varoufakis’s sartorial insouciance was, of course, as carefully calculated as his economic analyses. His leather jackets and brightly coloured shirts (all-too-often unaccompanied by the required necktie) signalled his determination to carry just a little Mediterranean sunshine and machismo into the grey, staid and deeply conventional world of European finance. That these ageing Teutons in their dark suits and sensible ties felt upstaged by Varoufakis’s big fat Greek virility was as obvious as it was disruptive. A rock star at a Rotary meeting could not have been more out of place.
But disruption and non-conformity were essential ingredients of the Varoufakis shtick. What better way to demonstrate his radical new approach to doing business with the “suits” than by refusing to turn up in one? In a world increasingly informed by images rather than words, Varoufakis was signalling that Neoliberalism is not the only game in town: that economic alternatives do exist.
His people got the message. And even if he is not there to deliver it in person, Varoufakis’s vision of a better world will continue to dazzle the eyes of the “gods” who demanded this Greek hero’s sacrifice.
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 10 July 2015.
My wife (from Epirus) tells me that it is "amartia". She says the Roman bastards put an "H" there to distinguish it from the long "A" in that word.
Any acknowledgement at all of the Greece's absurdly unaffordable government spending, or colossal levels of tax evasion?
Your best column yet, Chris, in my opinion.
Hopefully, he will live to fight another day - particularly if no compromise is arrived at.
For Christ's sake, I get sick of saying this. Greece's government spending as a percentage of GDP was about average. Less than Germany, and a lot less than France. And Greece's bureaucracy as a percentage of those employed was also average or slightly below. When you guys get this shit from? And why do you keep promoting it? As far as tax evasion goes true to a point, but very few of the tax evaders are government supporters and a small number of them owe a shitload. And we can guess what group THET small number belongs to.
"Debt, n. An ingenious substitute for the chain and whip of the slave driver"
"The history of an oppressed people is hidden in the lies and agreed myth of its conquerers"
Sorry to tip a bucket of reality on your leftist fantasy that somehow the brave son of marx would stare down evil neoliberal bankers and set off a counter revolution in italy and spain, creating finally an alternative idealogical current to replace bolshevism and lead to your long awaited socialist revolution here - not going to happen Mr Trotter - read the papers:
"The Greek government capitulated on Thursday to demands from its creditors for severe austerity measures in return for a modest debt write-off, raising hopes that a rescue deal could be signed at an emergency meeting of EU leaders on Sunday.
Athens is understood to have put forward a package of reforms and public spending cuts worth €13bn (£9.3bn) to secure a third bailout from creditors that could raise $50bn and allow it to stay inside the currency union.
A cabinet meeting signed off the reform package after ministers agreed that the dire state of the economy and the debilitating closure of the country’s banks meant it had no option but to agree to almost all the creditors terms."
Great lets get on with tax cuts, gradualist deregulation and keep the neo-muldoonist ship on course.
@ Tauhei - in Ancient Greek script the "h" sound is indicated by an apostrophe pointing in toward the word rather than by a letter - e.g. ἁμαρτία - which is probably why the Romans added the "h".
A great column Chris - there is nothing I can say about Yanis Varoufakis that would do him justice - he has given, and will hopefully continue to give, us all an example of the left at its finest.
You're whipping a dead horse GS. The righties don't want to hear it. Whenever we mention that little gem of information they put their hands over their ears and yell loudly, "La la, la we can't hear you!"
It is my strong suspicion that a man lacking the courage to sign his name to his opinions will ever be in the position of an Alexis Tsipras or a Yanis Varoufakis. He will never know the inhuman weight of a nation's expectations on his shoulders, nor the pressure of History's hand on his back.
The summit of his achievement will be to launch a little spittle at the ankles of such leaders - an operation which will require him to elevate his head to the maximum degree.
Needless to say, the great will not notice his contribution, and the rest of us will mistake him for the insect he so closely resembles.
The statement by Yanis Varonfakis that "we of the left know how to act collectively with no care for the privileges of office" would not apply to anyone in the CTU or Labour party. In fact I would contend exactly opposite. Most MP's in Labour do not want to win an election, they just want the good life a list or electorate seat gives them, this obvious in their performances on the front benches and then in select committee seat warming. They are pretender socialists.
anon @13.45......there have been no arias from women of ample proportions as yet.
How do you get around the borrowing bit Chris? That's what a fly on the wall like me wants to know?
Any acknowledgement at all of the Greece's absurdly unaffordable government spending, or colossal levels of tax evasion?
Any acknowledgement at all that this is a balance of payments crisis, that Greece has cut government spending by a fifth in seven years, or that Milton Friedman (aka the High Priest of Neoliberalism, and hardly a socialist radical) pointed out that the Euro project was fatally flawed from birth?
"How do you get around the borrowing bit Chris? That's what a fly on the wall like me wants to know?"
If they needed extra cash they couldn't just create like a country with a central bank at their disposal might have done.
How is this guy a populist Keynesian?
Why is he being praised for his role in government, when he never once actually presented a plan for growth ?
His economic strategy was to push until the point of crisis, and then hope that the political cost of a Greek default would weight greater than the amount of money he wanted to be given. All just another experiment in game theory.
And the cost is 5 months of worsening conditions in Greece, no cash for a fortnight in a cash based society, and countries which are even poorer having to pay up to keep thus client state economy going .
The very worst form of leftie demagogue.
Hardly worth praise, given the mandate he was given to renegotiate a bad deal into a proper growth strategy.
It does not matter the cut of the suit or the lack of a tie (thank goodness the tie is on its death bed), the finance minister of Greece has to find (borrow, beg or steal) the money to pay next weeks pensions.
Diverting attention away from that problem to what a person wears is not going to present Greece with any solutions to how they are going to get the money to pay next weeks pensions.
At this point in time both sides are looking at the past and playing the blame game. When will the Greeks look into the future and structure their society to pay next weeks pensions?
These alternatively suited leftist in Greece are anything but. A proper leftist state would have confiscated all private property, imposed martial law, printed a new currency, disbanded the military (remember 1967?)and told their creditors to wait in line for payment after the pensions had been paid from the coffers of the confiscated private properties of the elites.
I feel another 1967 style coup coming to Greece very shortly. Returning to the fight between the left and the right unless the current alternatively suited "leftist" can come up with a plan to pay next, and every following weeks, pensions.
I saw a lovely comment on another blog about credit Jh. It said credit was like heroin; we should treat creditors as we do drug dealers.
" I get sick of saying this. Greece's government spending as a percentage of GDP was about average. "
Goldman Sachs had done their work well. But its now 2015......... All that debt.
Greece is the tip of the iceberg. Governments around the world are washed with debt they will never repay. The time of Marx being the most significant influence on government is fast ending.
Eventually the money runs out. Called a sovereign debt crisis. Over the coming years it will dominate.
Laissez faire will replace government economic planning the people will not tolerate State induced misery & poverty any more.
Hear hear Pat! I always thought that lady was Mahalia Jackson but Wikapedia doesn't mention her in this context.
As for Mr Varoufakis , one of his protagonists earlier on ridiculed him as a "game theorist". They may live to regret that comment as it seems to me he has been playing them all like a fiddle ever since ; and though he may have tactically put down the bow for now, and the baton, I'm quite sure he is still happily writing the score.
I think he knows, and he knows Sherble Knows, That neither the rules of the eurozone nor the parliaments of the members will allow the finical relief that Greece needs to survive. So it doesn't matter what the Greeks agree to in the way of reforms, there won't be a deal . They just want to expose this fact to the Greek people and the rest of the world.
Cheers David J S
Understandably, a lot of comment about the Greek crisis takes the form of philippics twixt left and right, Social Democrats and Neo-liberals,‘austeriacs’ and Keynesians. I too have participated therein and make no apologies for so doing.
But there’s another dimension to this drama, which, in New Zealand at least, we’re tending to ignore, viz: the potentially existential crisis of the European Union.
Currently, the Union is beset with refugees in unprecedented numbers and its member states are showing scant ability to work together towards sharing the inevitable burden. At the same time, the EU is afflicted with mass unemployment, rising and mutually antagonistic nationalisms, a shooting war not far from its Eastern frontiers in Ukraine and the possibility of Grexit being followed by Brexit.
Wherever one stands on the left/right spectrum, the decline and possible crumbling of the once gleaming tower of a Europe at peace with itself should give us pause for reflection.
May I therefore recommend the following article by Tim Garton Ash in the Guardian:
As the waves of lofty idealism and low cunning both crash on the rocks of reality, I wonder whether, hubris is, yet again, being followed by nemesis.
And I imagine Clio, the Muse of History sighing “ ’twas ever thus” before resuming her remorseless journey. Moving on is what Ms Clio does.
Meanwhile, is that a frosty smile forming on the lips of the heir of Muscovite Tsars(who,in turn, thought of themselves as the heirs of Byzantium)as he contemplates the follies of the would-be heirs of Charlemagne?
"Laissez faire will replace government economic planning the people will not tolerate State induced misery & poverty any more."
This must be one of the most stupid statements I've ever seen on this site. The time of government planning that is the 30 or 40 years after World War II, had us in our most prosperous state ever. At least for the middle and working classes. Still, it looks as if even the IMF is rethinking all this bullshit, and a return to Keynesian economics seems pretty much inevitable now :-). See Simon – my lack of evidenced statements are just as good as yours. Except mine do have some reasonably solid evidence behind them. :-)
Good article Chris. Considered analysis on this issue is sadly MIA in the MSM. Anyone considered this?
A small country saddled with a large (and growing) debt which itself is even dwarfed by a bigger private debt. Hollowed out economy dependent on a few commodities exported to a customer proving not as reliable as we hoped. No future plan whatsoever except for business as usual meaning enriching a few oligarchs and other assorted tax dodging ticket clippers.
Just thinkin.... Hope we have a Yanis somewhere round here coz we may need him or her
Well the Left (or at least the Hard Left faction) has their martyr.
Pity he was the worst Finance Minister in the Western World.
The reason I say that is that the totality of his contribution is to ensure the Greek banks have been closed for two weeks. it is one way to destroy what is left of the Greek economy.
Of course the very things that wowed the Left; the motorbike, cool insurectionary clothes, and flamboyant language are probably the the very things best avoided in a Finance Minister. Even Tsipras ultimately recognized this.
Anyway how long before we see him in the new imitation of the Che Guevara poster.
Another economic illiterate who can't see past the headlines.
You've hit the nail on the head Victor. Europe may have a common currency but the various states all operate as individual nations. The is no common policy on immigration, on tax collection, infrastructure costs and so on. Until they do get their heads together nothing will change.
I have made the point elsewhere of why are Legarde and Hollande so against a Greek debt relief. The French banks are over exposed to Greek private debt! Greece doesn't pay the French banks will go down. Shambles!
A man with a Ph.D in economics who drove his country up to the edge of an economic cliff, a true hero indeed. The proposals the Greek Govt have now put forward to their creditors are essentially the ones they rejected in their referendum; so much for Oxi. You previously mentioned quite a bit about the new Ukrainian govt.'s facist links. Not a peep about Syriza being in a coalition with the rightwing ANEL party. I admire your passion but passionate beliefs can be like blinkers to facts. Syriza has yet to do anything about reforming the trough of privileges that drain Greek coffers. In the several months since they came to power the so called peoples party has placed the greek people in the position of only being able to access 60 euros a day, with the very real risk that they could potentially lose their life savings in a sea of devalued drachmas. I do believe you have a point, austerity has been an exercise in pointless pain, all of the EU countries should have allowed the Greeks to partially default on the Greek sovereign they (EU partners) held. End of the day Syriza has been nothing but bombastic table pounding, with no sign of any real desire to make the oligarchs pay a single euro cent in tax
Let me see Wayne – if you indeed be Wayne – a finance minister with a PhD in economics and an MSc in mathematics, who's pretty much destroyed game theory, beloved of neoliberal economists. When was the last time we had anyone in the finance portfolio with those sort of qualifications? Never? I think the closest we ever came was a PhD in economic history. Or perhaps a degree in commerce/English literature. Of course he's a martyr, no way are the troika going to allow someone who speaks their language and knows a shitload more than they do about economics in a position of power in Greece.
I take your point but I'm not currently sure which side the French are on.
Holland currently seems to be seeking an accommodation and is reported to have sent some economic "experts" to Athens to help Syriza with its latest proposals. He also seems to be in favour of a "haircut", which puts him at odds with Merkel.
Lagarde, who's meant to be supra-national in her approach but may have her eyes on becoming France's first ever female head of state, has certainly made some very unfortunate and arrogant statements over Greece but has recently claimed that she's never been opposed to some adjustment of the country's debts.
Varoufakis, meanwhile, has claimed that the German government wants Grexit, in part, because it would present France with an awful warning of what could happen if it doesn't get its own fiscal house in order.
I suspect that the mood of German voters and the ever present if misunderstood shadows of inflations past are much more powerful drivers of policy in Berlin. But it also seems that Merkel is under strong pressure from Washington to prevent Grexit and keep Greece firmly anchored in "the West".
Even so, the apparently shifting French perspective confirms Garton Ash's view of 28 different Europes with 28 different agendas.
Fortunately, there are still a few people in leading positions who can take on the "big picture". Donald Tusk would appear to be one of them and Matteo Renzi another. We'll now have to wait and see whether intelligence or intransigence prevails. My money, I much regret to say, is on intransigence. The Day of the Lemming may be dawning!
I suspect that it would be impossible for Syriza to tackle Greece's two largest bastions of privilege, viz the armed forces and the Orthodox Church, without signing its own death warrant and that of Greek democracy.
Varoufakis and Tsipras may well have just succeeded in what they set out to do....a couple of articles which may cause those who doubt their abilities (in the face of overwhelming odds I may add) to view the events of the past 5 months with unscaled eyes
Hollande recognises that Greece simply can't pay the debt Victor and they need relief of at least some of it.
I have been saying for a long time that the debt simply doesn't exist, it was created out of thin air by the ECB. The same applies with the bullshit that the German and French taxpayers would have to cover it if Greece defaults. How can those taxpayers be responsible if the debt doesn't exist?
I could go into a long drawn-out explanation but this series of animated videos by Paul Grignon explains it admirably!
A completely new system of finance needs to be set up world wide.
Varoufakis is a self professed Marxist. So the fact that he has a PhD in economics is a somewhat irrelevant to being able to be a successful Finance Minister in a moderately open market economy. He was never going to have the inclination to follow the necessary albeit conventional belt tightening exercise for the Greek economy.
The Irish have done so, and have got out of their mess. The Greeks seem unwilling to do so and therefore remain mired in recession.
There are clear pathways to make an economy competitive, but you have to be willing to price the inputs, including the cost of labour competitively. The fact that 50% of young people are unemployed is a sure sign that the minimum wage is too high. Put simply, the Greek economy would grow if the things and services that Greece sells were competitively priced. But that means the inputs also have to be priced right. A growing economy would solve all their problems over time.
That is how the rest of Europe sees it, except of course the Hard Left.
Honestly, Wayne, I expected better of you. The Greek Crisis, however, has a way of paring down people's ideological masks to reveal their ethical core.
So it has proved in your case. When push comes to shove, Wayne, you have shown yourself to be just another neoliberal ideologue - complete with all the chilling jargon of your species.
People are not cans of baked beans to be priced correctly or removed from the shelves - they are sentient beings with rights.
Your specious observation: "A growing economy would solve all their problems over time" blithely ignores the central reality of the Greeks' predicament, namely, that adherence to the austerity measures imposed upon them by their Eurozone creditors has seen the economy contract by 25 percent.
With a shrinking economy the percentage of GDP represented by Greece's debt burden can only increase - not shrink.
By following the advice of people like yourself, Wayne, the Greeks will only make their problems larger and more intractable.
I am also intrigued by the way you have conflated the dogma of the European elites with the views of Europeans as a whole. Clearly, you would prefer the company of the sadistic Wolfgang Schauble to that of the passionate Yanis Varoufakis.
Says it all, really.
Oh Good lordy Wayne what planet are you on?
The un-employment in Greece has nothing to do with the minimum wage at all as well you should know. It's because the Euro has a fixed "Value" in relation to the Greek economy. Greece can not devalue the Euro to trade it's way out of debt as it would if it had it's own currency.
The crass stupidity of right wingers never ceases to amaze me!!
Incidentally, Ireland is a long way from being out of the mess it's in. Go and see the country and find out for yourself. If that is an example of 'Success' then I would love to see failure! Over the last years Ireland's greatest export is it's best and brightest. The Troika want the same for Greece.
Whether Yanis is a Marxist or not in immaterial and simply a derogatory comment that is irrelevant.
Here's a question for you Mr. Wayne Mapp; How can Greece owe money that DOES NOT EXIST??
Clearly I do prefer market solutions. And I do think when youth unemployment is north of 50% there is almost certainly a problem that they are being priced out of the labour market.
In my view it is pretty obvious the Greek economy needs radical reformation, and that means making it more market responsive.
Otherwise the economy will continue to shrink.
I do think staying in the euro makes it harder, but this is the choice they have made. If they want more immediate credit, and a debt write off (which they probably need), they are going to have to take their castor oil. Not very palatable, but necessary.
And I do think when youth unemployment is north of 50% there is almost certainly a problem that they are being priced out of the labour market.
Dear God. Did it never occur to you that the problem might be lack of aggregate demand, meaning lowered economic output, meaning higher unemployment?
This is like reading about those classical economists who insisted that unemployment could only ever be a temporary phenomenon, and that any attempt by the government to intervene could only make the situation worse. The Great Depression proved them wrong once, but clearly that wasn't enough...
Oh, Wayne! If I had racked my brain for a week I could not have conceived of a more delicious response.
You do realise that the forcible administration of Castor Oil to their left-wing opponents was one of the signature acts of brutality perpetrated by Mussolini's fascisti?
To see you (inadvertently?) refer to this practice as being something which the Greeks must endure (for their own good, of course, which is also what Mussolini's thugs told their victims) perfectly illustrates both the overwhelming power imbalance between the Eurozone and Greece, as well as the political savagery with which it is being expressed.
I have always suspected that, in extremis, the brutal totalitarian impulses buried deep in the heart of the neoliberal project would reveal themselves.
You have, albeit unwittingly, validated my suspicion.
God Wayne, even economists now realise that the first wave of posterity caused the Greek economy to contract, and the debt to GDP ratio to spiral upwards. The troika has continuously operated in favour of the interests of private banks, and the Greeks in typical right-wing fashion are considered to be "sinning" somehow. The tip of the hat IMO to the puritan origins of neoliberalism.
I'm not at all sure that your pathways are clear, but in the absence of their own currency, making labour cheaper is more difficult than it would be by devaluing. Which they can't do.
The Greek public sector may in fact be no more corrupt and inefficient than anywhere else, it's very difficult to measure, yet everyone on the right seem so sure that its true. And – I get tired of saying this yet again – Greece's proportion of public servants was about average. Considerably lower than some of the countries that are criticising them.
It's not as if Greece is alone in its economic woes. Spain, Portugal, Italy, Ireland are all to some extent buggered. Perhaps we should start admitting that the fault is with the euro rather than Greece itself.
Not to mention that promises were broken about further debt relief once Greece had achieved surplus. Which it did in 2013.
Fuck me this is complicated, and you can't just say Greece's problems are simply due to pricing of labour. It's this bullshit oversimplification that makes me feel that neoliberalism is more of a religion than a rational belief.
Dammit AutoCorrect that's austerity! :-)
and it is wondered why people disengage from politics when Mr Mapp is a prime example of politicians inability to analyse and respond to a problem.....the even scarier thought is politicians ability appears to be decreasing with the passage of time if the current crop are anything to go by.
Did you know Greece celebrates Oxi Day every October, which marks their 'No!' to Italy on surrender just before invasion in 1940. Worth celebrating indeed and good on them.
However that was probably partly what the absurd vote the other day was about.
After reading four detailed pages of last week’s Economist on the history of the crisis and recent ‘errors’ in Greece I think these points are salient:
1. Greece needs a welfare effort from the rest of Europe, since they are part of their family; are neighbours; and many Greeks are innocent of their reckless governments' duplicity and incompetence; compassion is called for as was the case for the defeated peoples after WWII;
2. Their economy was nearing recovery mode when the current unreliable and reckless lot were elected and ensured a third bail out would be inevitable, or bankruptcy;
3. The Euro leaders and their banks made things worse going back a few years now by imposing excessive austerity, so significant debt should be written off;
4. The other Euro nations should not have admitted Greece to the Euro, although the greater guilt for that goes to the government at the time which lied and cheated its way in, admittedly with help from capitalists; then continued to lie and cheat, although other nations in the Euro have done some of that too;
Oxi would be my vote on any hero status for Varoufakis & his boss. I don't see any moral high ground justified on the left here at all, as socialist Greek governments have been as bad as any, and the current one takes the cake. Sticking a bunch of fingers up to the rest of the Euro-zone may get some cheers from the left but it is just more childish idiocy. How well has militant socialist rhetoric and policy worked for Venezuela? There goes Greece?
Hope not. We should all go on holiday there when they issue their own currency.
"who's pretty much destroyed game theory, beloved of neoliberal economists" - actually Varoufakis is an expert on game theory and used it when working as an economist for Valve corporation. Game theory is hardly 'neoliberal' it was worked out by mathematicians and is used for decision theory in operations research, artificial intelligence and computer science - oh and economists and political scientists use it for modelling conflict/resolution situations - prisoners dilemma being a great example.
Varoufakis is a very good micro economist, but Wayne is correct in that he is rubbish as a finance minister.
Syriza had a golden opportunity to argue a strong case against blind austerity which for most of the southern eurozone countries has had poor results (it has worked for some eastern members). Instead after 5 tumultuous months of buffoonish brinkmanship by the tweedledee and tweedledum duet of Varoufakis and Sypris we have Greece on the verge of a grexit and economic collapse and any alternative paths to austerity (fiscal expansions to ease the adjustment pains of structural reforms) are off the table. Great work Syriza job well done, time to go to the polls and get a slightly less useless set of leaders.
I was unaware of the connection with Mussolini's fascists. I had more in mind the stern nurse of Victorian or Edwardian times. Perhaps angela Merkel quite neatly fits that mould.
I am pretty sure most Greeks would perceive what is happening as stern medicine.
I was unaware of the connection with Mussolini's fascists. I had more in mind the stern nurse of Victorian or Edwardian times. Perhaps angela Merkel quite neatly fits that mould.
I am pretty sure most Greeks would perceive what is happening as stern medicine.
Guerrilla Surgeon, I note you refer to "economists" as if it means all of them them. I am pretty certain the Eurozone will be designing their prescriptions with the assistance of leading economists.
In any event the deal now seems to be done.
Of course Greece did have an alternative option. They could have gone for their own currency, and therefore not followed the Eurozone prescription. This would of course still result in wages and prices being more aligned to market conditions, except that it would have been achieved by a dramatic devaluation, which can't be done by staying in the Euro. Therefore the Greeks have to make the adjustments by changing the law around pensions, labour reform etc by virtue of their decision to stay in the Euro.
The point being is that if you want other people to give (lend) you money, you have to agree with their conditions. You can't vote for other people beyond your jurisdiction to give you money. As the Greeks have just learnt.
Just listening to an interview on A B C radio with Varoufakis its' clear that I was mistaken in thinking he was still closely involved in steering the Greek negotiations. His withdrawal will have been a bad blow to Tsypris's strength in an impossible negotiation.
Cheers David J S
What money is actually being lent Wayne? As a Politician you should know how it works. There is no MONEY, just a promise to pay.
Schauble is an old war horse, passed his use by date and needs to be put out to pasture, better still sent to the glue factory. At least with the latter he would have a little redeemable value. He is a believer in German exceptionalism and there is no place for that in modern society.
I can't see the Euro lasting in it's present form, it's too rigid.
Wayne, and this time I will take it for granted you are Wayne. Good point on the economists. I was making the point that economists are usually pretty monolithically right wing. And that they are in fact more and more divided, and more and more of them are coming round to the idea that austerity doesn't work – as I have said – except under very strict circumstances. And this is not just people like Krugman. I was unclear, I apologise. I am however pretty certain that the troika can find enough unshaken economists to make sure that Greece gets a thorough caning.
Including things I might add that Germany refuses to do in its own economy.
Anonymous, as far as game theory goes – I said he's destroyed the game theory that is beloved of economists. I didn't say anything about the origins, which I do in fact know. Again I may have been unclear. Specifically though, the prisoner's dilemma has been debunked by more than just Varoufakis. I think it's now regarded as dead in the water by many if not most. Certainly I think psychologists might take issue with it, but then economists have always had a mistaken view of the psychology of the individual and to some extent the group.
Charles – what was Venezuela like before the terrible socialists got in? I think you'll find that most poor people prefer the socialists. A few middle-class people maybe can't get enough toilet paper, but the poor are eating a lot better. I know which I prefer.
What really annoys me though is this. No one mentions the consequences within Greece. And I guarantee there would be gasps of horror if I were to ask a question like "How many kids with malnutrition are you prepared to see on the streets of Athens in the name of austerity?" The Col. blimps like spluttering would of course be a cover-up for the fact that the right never cares about the consequences of its actions, because they are insulated from them. Oh wait – of course – it's their own fault.
Al Jazeera has a good video on what is happening in Greece. Watch it through.
4 months of standard negotiations.
another month manufactured by delaying payments.
then a fortnight added on to that after 'running rings around them' with a referendum.
and not once in any day in that entire time did the Tsipras team manage to propose a coherent economic growth strategy.
in fact so poor were their economic proposals, that it took the French team to come in and draft a sufficiently detailed counter proposal to restart negotiations in the first place - and that detailed counter proposal was pretty much identical to the unacceptable one that was rejected in the referendum.
when your finance minister and his entire ministry cannot produce any credible economic proposals over 5 and a half months, you know that they are useless.
and let us not forget, 6 months ago, Greece was able to obtain loans again on the bond market, its unemployment was falling at a significant rate (especially so give that was winter and the tourist season had not started), and the economy was growing again. Three things that have been demonstrably untrue since Varoufakis came into the ministry
so by what measure exactly does Varoufakis qualify as a hero of the left?
Another great victory for the far left, indeed.
Paul Krugman explains why Austerity simply doesn't work in this clip from the BBC.
more hot wind by gorilla, game theory is alive and kicking in economics and operations research/AI, you reveal your ignorance by these broad loud and bufoonish outspewings of phooey - but your not a blogger, just a prolific commenter in a little read blog so I guess we can excuse you for shouting out nonsense dressed up as rigourous analysis - after all Rob Salmond is paid to do the same thing with race based profiling.
On Varouflakis's achievements as finance minister Ill go no further than quote the words of the greek prime minister Alexis Tsypris "his former finance minister was a great economist; that doesn’t always translate into political skills, though" kinda says it all really.
Im fully behind Greece in theyre decision to embrace austerity (as I would be with a decision to default), theyve made a concrete decision and I have big respect for Syriza now, they dont like austerity and lament Greece's woes but they are committing to a course of action which if we are honest has been forced on them now.
as we approach 100 years since the rise of Fascism we note that with those with personal experience of what that caused are now almost to a man and woman deceased, we see the current generations doomed to repeat the madness....slow motion train wreck.
Excuse me, Anonymous@9:24, but at between 40,000 to 60,000 page-views per month, Bowalley Road hovers around the mid-point of the top-20 non-commercial blogs in New Zealand - and easily makes it into the top-10 political blogs.
Chris, you try and smear free market ("neoliberal") economics with the Mussolini's collectivist politics. Sorry, but a reading of the facts refutes that smear completely.
You should already know that Mussolini was an admirer of J M Keynes, and wrote: “Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (1926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.”
He also opined: “The Fascist conception of life accepts the individual only in so far as his interests coincide with the State. . . . Fascism reasserts the rights of the state. If classical liberalism spells individualism, Fascism spells government.” In his 1928 autobiography, Mussolini made clear his dislike for liberal capitalism: “The citizen in the Fascist State is no longer a selfish individual who has the anti-social right of rebelling against any law of the Collectivity.”
Anonymous 9.24. If you try to read a little more widely, you will find that although game theory is still used, many people now at least feel that the prisoner's dilemma is rubbish. And if we're talking about broad and buffoonish, well words almost fail me. Your comment is full of spelling and grammatical errors, which I wouldn't normally comment on except – "buffoonish".
I think you'll find that the comment about the Greek minister's lack of political skills is simply that he lacked negotiating skills. Not that his economics were necessarily incorrect. I'd accept his take on the Greek financial crisis over some anonymous, semi-incoherent, ungrammatical, anonymous person on the Internet anyway. :-)
How interesting that the Tsipras government has just disregarded the recent decision of the Greek people by accepting further truckloads of money from German taxpayers in return for inflicting that same vicious austerity that apparently works for individuals but not for countries. No wonder the petrol bombs are flying outside the Greek parliament. What an utter betrayal!
Had no choice Richard, that's patently obvious. The Troika made demands and were not prepared to compromise. Which is what true negotiations are about -- compromise. And time was running out for Tsipras.
There is no way out of this situation for Greece or the Troika either except to forgive the debt and the German Banks taking a big hit. The alternative is to turn Greece into another Somalia. A third world nation - nay a fourth world one! I note that the IMF has withdrawn from the deal stating correctly that Greece hasn't a hope in hell of ever paying off the debt.
As I have stated here and elsewhere, this issue between Greece and Germany is political not financial.
disagree Davo...he had a choice and should have walked....yes they would have had banking collapse and major issues with imports in the short term but they could default, devalue and start to rebuild their economy on their own terms....whereas by accepting they have condemned themselves to an indeterminate period of foreign retribution before the former occurs anyway....there is no possibility of Greece being able to survive in the single currency, indeed there is no chance the single currency itself can survive in anything like its current form.
No prob Pat, I see your point. The majority of Greeks want to stay in the Euro and Tsipras knew that. He is in-experienced too which played a part. The main stumbling block was the complete intractability of the German side. Merkel and Schauble had said categorically that the German Banks were not going to take a hit. But now they will have to, the debt is unpayable.
We can wax on lyrically about how the Greeks were/are spendthrifts but when a lender keeps on lending knowing that the debt is too large and the borrower cant pay it back, the lender is equally at fault.
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