Good article on Varoufakis by William Engdahl and how the former Greek finance minister really did not have the interests of the people at heart. He may have been an ideologically bad choice or, just not that good at negotiation.
The article appeared on July 3. Varoufakis resigned on July 6.
Here is an excerpt:
But to date he [Varoufakis] has done more to increase the misery of the Greek people in six short months than almost anyone else, even Wolfgang Schäuble or the IMF’s Christine Lagarde.
He pretends to be against austerity but his record shows the opposite. Varoufakis was the adviser to Prime Minister George Papandreou and PASOK when Papandreou made the disastrous draconian austerity deal with the EU on behalf of Greece so that French and German banks could be bailed out. Varoufakis also has at various times heaped praise on Mario Draghi and the ECB, suggesting solutions for how to keep Greece in the EU, a track that pre-programs Greece for self-destruction under the current Troika regime of austerity. Read more.
One note: Engdahl has long been associated with the Lyndon Larouche movement so take that for what it's worth. Even so, I find his comments in here to be pretty much right on and it's what I was pointing out about Varoufakis from the day he was appointed minister.
23 comments:
OK, so I guess Galbraith's a phony too, since Varoufakis's views on the Greek economy and Greek economic policy throughout the crisis have been virtually identical and were developed collaboratively.
Galbraith? Was Galbraith negotiating with the Troika? Gee, I didn't see that.
So Mike, your position is that the Finance Minister of Greece can simply refuse to negotiate with the European Central Bank, the European Union and the IMF - and still do his job?
Here's Version 4.0 of The Modest Proposal by Varoufakis and Hollande, and co-authored with Galbraith. As you can see, it contains lengthy sections recommending actions by various European institutions, including the ECB and the EU. There is simply no way this kind of plan could be implemented without extensive negotiations between Greece and those institutional parties.
https://varoufakis.files.wordpress.com/2013/07/a-modest-proposal-for-resolving-the-eurozone-crisis-version-4-0-final1.pdf
Who said anything about "refuse to negotiate?" Negotiate, yes, but in a tough and smart way. Varoufakis conceded on everything right from the start and it still wasn't enough for the Troika. That was a sellout to the Greek people. He barely even lived in Greece anyway.
Varoufakis was on record in print and in many videos stating that a united Europe must be preserved at virtually all costs. Apparently that meant even at the expense of Greeks suffering under endless austerity if that course means saving the union. Varoufakis realized endless austerity was bad, but to him a broken Europe was much worse. Sorry, but that's blinding ideology circumventing right reason. Good riddance.
From the YV/JG paper:
"One sovereign state, Cyprus, has now de facto
gone bankrupt, imposing capital controls even while remaining inside the euro."
So if a nation imposes capital controls it is allegedly "bankrupt"?
The 3% treaty limit on the fiscal deficits is a capital control ... the whole thing is based on capital controls.... so what Cyprus does is a "bad" capital control while the 3% treaty limit is a "good" capital control?
Please...
I still hold out hope Syriza is positioning to be forced out rather than being seen to opt out. It seems possible to me that this is all part of a strategy. However, I agree with others that it may be that they in fact have no strategy, or that they are so wedded to the idea of the euro that ultimately they will end up folding, preferring even austerity to leaving the euro.
If Syriza stands firm, Greece ultimately will benefit IMO (whether through forced exit or the gaining of significant concessions). But will they? If they are pursuing good strategy, it will probably be difficult to distinguish from weakness at this point. Difficult because appearing weak could be strategic or simply weakness.
I am not saying I am confident of the former, just that we may need to see how the dust settles before evaluating the effectiveness or otherwise of Syriza.
The stuff in that article about Varoufakis is complete bullshit.
I can't believe you take this stuff seriously, Mike.
Costas Lapavitsas wrote this back in March.:
"...What should we as Syriza do and how could the left across Europe help? The most vital step is to realise that the strategy of hoping to achieve radical change within the institutional framework of the common currency has come to an end. The strategy has given us electoral success by promising to release the Greek people from austerity without having to endure a major falling-out with the eurozone. Unfortunately, events have shown beyond doubt that this is impossible, and it is time that we acknowledged reality.
For Syriza to avoid collapse or total surrender, we must be truly radical. Our strength lies exclusively in the tremendous popular support we still enjoy. The government should rapidly implement measures relieving working people from the tremendous pressures of the last few years: forbid house foreclosures, write off domestic debt, reconnect families to the electricity network, raise the minimum wage, stop privatisations. This is the programme we were elected on. Fiscal targets and monitoring by the “institutions” should take a back seat in our calculations, if we are to maintain our popular support.
At the same time, our government must approach the looming June negotiations with a very different frame of mind from February. The eurozone cannot be reformed and it will not become a “friendly” monetary union that supports working people. Greece must bring a full array of options to the table, and it must be prepared for extraordinary liquidity measures in the knowledge that all eventualities could be managed, if its people were ready. After all, the EU has already wrought disaster on the country..."
http://www.theguardian.com/commentisfree/2015/mar/02/austerity-greece-euro-currency-syriza
There was never a chance the EZ would relinquish it's hard line stance. YV surely knew this, but failed to come clean with the Greek people. Crushing Austerity was always going to be a precursor to staying in the EZ. Engdahl is right on that score, as is Yves Smith, Lapavitsas and many others. Yet in YV's world, membership in the sociopathic EZ is more important than freeing the people from the chains of austerity. His words and actions proved just that. Good riddance.
http://www.mediapart.fr/journal/international/080715/we-underestimated-their-power-greek-government-insider-lifts-lid-five-months-humiliation-and-blackm?page_article=3
If this article is not bullshit it shows how naive Syriza was. A mistake they're paying with blood now.
Presumably Tsipras and by extension Syriza were aware of YV's position prior to him offered the role of finance minister. Presumably Tsipras and Syriza were also aware of what YV and his negotiating team were saying to the EZ. Presumably YV and the rest of the Greek team of negotiators weren't loose cannons: they went in to the negotiations having been briefed on what the Syriza position was, what EZ demands were acceptable and what were not.
The notion that YV is solely to blame doesn't make any sense. He led a Syriza negotiating team that did what it was told by the leaders of Syriza. If anybody is to blame, it is Syriza as a whole for believing the EZ would be reasonable and not entertaining default and exiting this mad economic disunion.
Even now, with immense pressure being brought to bear on the EZ by the US, the EZ still demands the quadriplegic Greek economy do a triple back somersault with pike and a full twist. It seems that the EZ has looked into the abyss and is anxiously stripping off so as to jump in.
SYRIZA MP and economist Costas Lapavitsas was interviewed back in March by Der Tagesspiegel. A very revealing interview. Some excerpts:
What’s your opinion on the negotiations so far? How is the government doing?
The Syriza strategy has been – and it remains – that a change in the political alignment of forces in Greece, in Europe, or generally, would act as a catalyst in the Eurozone. This strategy has now come to an end. The real question is how long it will be before people understand it.
[It never happened. Even Spain's Podemos moved to the center. And as for SYRYZA’a popular support in Greece? Who cares. Not the EU thugs.]
So there is no middle way?
There is no middle way. The Eurozone will not allow it. Do I think the leadership was surprised? Yes, I suspect they were to a certain extent. Because my reading of the situation is that the leadership genuinely believed that you could change the political alignments, you could change electoral arithmetic, and on this basis change Europe, change European policies.
[“No middle way.” Because the monetary union is rigid — i.e., no change allowed!]
So what should the Greek government do in your opinion?
Greece needs to consider the true alternative path which is to leave this failed monetary union. It is clearly the only way that was there from the beginning – which is basically exit. If you are going to apply such a programme, as Syriza has proclaimed, which is not radical – Syriza’s programme is just moderate Keynesianism -, you need to think seriously of how you are going to get out of the confines of the Eurozone.
[He’s talking about an orderly, negotiated exit with the other eurozone countries, not a contested one. It would also entail deep debt restructuring — that is the price the eurozone would have to pay for getting rid of Greece. Greece will have a viable future and the rest of the eurozone won’t, no more, need to worry about Greece. Everyone is happy. Well, for now since it will be only a matter of time before the same “Greek” problems resurface in other countries. Mind you, he’s is saying this 4 months ago. And as we all know, a lot of acrimony between the two sides since then. Hell, Greece is facing a possible worst case scenario — a disorderly exit]
So for Greece, does leaving the EZ also mean leaving the EU?
The most important is to differentiate between the EU and the EZ. In this country, and in most of Europe, a sustained confusion has been going on for years. That the membership of one equals the membership of the other. It’s of course absurd because there are members of the EU which are not members of the European monetary union. If Greece leaves the euro, it doesn’t have to leave the EU at the same time. If the Greek people want to leave the EU, let them leave the EU. But that’s a separate question. This conflation has been deadly and it’s been used ideologically…
http://www.thepressproject.gr/details_en.php?aid=74530
Btw, in the Jacobin interview, about a week before the one above, he stated that the Greek team went into the negotiations with EYES WIDE SHUT, completely underestimating the other side and thus oblivious to the “traps” that had been set for them. In other words, the good professors on the Greek team may teach game theory to their students, but the damn Troika thugs do it for a living!
https://www.jacobinmag.com/2015/03/l...grexit-syriza/
The Germans aren't famously known for their historical flexibility. True believers in ordoliberalism until the very end. Waiting to press the accelerator.
The Germans need to count their blessing the Morgenthau Plan was never implemented after WWII.
Here, in part, is what Lapavitsas said about YV in the Jacobin interview in March:
"So Varoufakis himself: I’ve known Varoufakis for a long time as an economist, of course. I don’t think you can call him a man of the Left in the sense of the radical or certainly not the revolutionary left, not in the sense that we would recognize in this country, but he is certainly a man who belongs to the left of center.
He’s always been that. He’s always been heterodox and critical in his economics. He’s always been a man who has rejected neoclassical economics and neoclassical theory in his work. And he’s always been ready to come up with policy advice which was outside the box and ready to think about alternative paths.
These are all pluses, in my book. However, when you look at his trajectory, you have to recognize that he was also an adviser to the government of George Papandreou, which was the first government that introduced the bailout policies in Greece, and he remained associated with them for a significant length of time. So in that sense, I don’t think you can call him a man of the Left in any systematic way.:
YV actually acted pretty much consistently with his on record ideological position regarding membership in the EMU. He is a Europe first ideologue, which based on his articulated opinions previously doesn't really make him a hypocrite. Lapavitsas isn't at all surprised at YV's trajectory post election. It's also easy to understand why there was no contingency plan for where Greece stands today as it never occurred to YV that leaving the EZ was ever an option from his perspective. Oh, and the Papandreou ties should have been enough of a tell absent any of the hollow rhetoric he might have been going on about.
But as CL makes clear, the Greek side was aware from the beginning that the other side was not going to budge in any meaningful way. And yet the Greek team -- Varoufakis et al -- kept using the same tactics over and over again? That's just nuts (paraphrasing Einstein).
And notice that when a Grexit is discussed, you rarely hear (I first heard it from CL) of an "orderly, negotiated and non contentious" Grexit. So there was never any serious discussion of such an exit, just of the "doom and gloom" kind.
But as CL makes clear, the Greek side was aware from the beginning that the other side would not going to budge in any meaningful way. And yet the Greek team kept using the same tactics over and over again? That's just nuts.
That was and remains their mandate. End austerity with plan that lets Greece recover will paying down the debt and also remain in the EZ.
Syriza has been trying to deliver on this.
The eurocrats are intransigeant even in the face of US and IMF opposition.
The Greek leadership may still think that the eurocrats will blink in the end, or it may cave, which would end the government's mandate and probably bring down the Greek government, which is the eurocrats actual objective.
Neither side wants to be seen as causing Grexit because Lehman Bros.
Tom Hickey has it right. In addition, Varoufakis is not acting alone, but part of a Cabinet led by Tsipras. And the moment he said that an alternative currency arrangement was immediately necessary, he was asked to resign. I think Varoufakis is wrong about Grexit, but I also think that those who say he is wrong miss the point that if countries (not just Greece) leave the single currency, there will be internecine fights between classes in each of the departing countries. Perhaps because Greece has been through coup d'états at least twice in his lifetime, Varoufakis is much less sanguine about the results of Grexit. Clearly the EURO should be abandoned anyway, but people who call him illogical, phoney, weak, etc. have not thought about the likely reaction of rentier and managerial classes and forces in the EU. They will never allow an orderly dismantling of the Euro, so the alternative is a chaotic, and sometimes violent one, IMO.
have not thought about the likely reaction of rentier and managerial classes and forces in the EU. They will never allow an orderly dismantling of the Euro, so the alternative is a chaotic, and sometimes violent one, IMO.
Right. The euro is a quasi-gold standard that obviates "Keynesian" policy and takes down the welfare state (social democracy) and installs the market state (neoliberalism) as supreme in Europe. This is supposed to make Europe globally "competitive,' — "coincidently" with the unmentioned additional benefit of virtually unlimited rent extraction by the TPTB and their minions and cronies.
There's a whole lot of money on the table and that brings out the "best" in people, we are told.
Interview with Galbraith from today morning - very enlightening about the politics of Europe. James Galbraith on Greece
Mike
You have this wrong.
Varoufakis is not a phony, merely someone who makes a *political* judgement that reform based on 'real' macro/money understanding underpinning EU/Euro structure is a better bet, long term, for citizens, than going back to an isolationist multiple currency Europe.
I think that's a very reasonable position to take - and certainly can be argued was the best interpretation of an 'end Austerity but stay in Euro' contradictory mandate.
The referendum result is a massive demonstration that the fully turned up power of MSM lies and fear mongering is not the weapon the PTB (or even Syriza leaders!) thought it was.
That loss of propaganda power under such extreme conditions is the THE VICTORY.
The truth is on our side - it is getting out, and probably already unstoppable :)
Greece already has a strong case to take to the ECJ over the ECB's initiated proceedings of 'constructive' expulsion - by junking LOLR and setting the money timer running on freezing cross border payments. (Effectively collapsing the Greek economy and forcing Euro exit - which 'infinges' rights automatically because there was no pre-written legal procedure in the Treaties - the highest principle in law of the ECJ, the highest court.)
Europe is NOT the US Mike. You need to pause occasionally and try to consider our history. Most of us favour the founding principles (solidarity based on social justice) of EU integration, the antithesis of the neoliberal nightmare it has become.
We have two choices now. Either go back on decades of progress - citizens' own integration should not be ignored - or try to go forward.
ry to go forward
Can you be more specific about that?
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