49 Comments

  • Yiannis, you keep attacking Germany for Greece’s problems when it has nothing to do with Germany.

    The problems in Greece, especially over the last 4 years have been created and inflicted by the Greek ruling class.

    Nothing whatsoever to do with Germany.

    If Germany is doing anything wrong, it is that they are bailing out the political class that caused the problems in the first place.

    If this propping up of the Greek political system is part of Germany’s strategy it is very cunning.

    But on the other hand if the Greek government simply sorted out is finances it would not matter what Germany did.

    Greece’s fundamental problem is that the political class have no interest in making the country self sufficient through free market capitalism. Why that is, I do not know….

    • There can be no sorting out of finances, for ANY member-state of the Eurozone, as long as it is caught up in the death spiral of debt, deflation and negative investment. Quite independently of the will power and ‘character’ of its ruling class.

    • The problems of the eurozone were not created by Greece, regardless of the propaganda by Germans. Moreover, the ability of any eurozone country to manage its own economic (and even political) destiny lies in the hands of the European Union. Germany’s leading role in impeding policy solutions for reforming the architecture of the eurozone is entirely self-interested and manipulative; it is in fact a disgraceful position which will go down in history as comparable with the two world wars that Germany is responsible for.

      It has nothing to do with the many failings and corruption of the Greek political class; nor has it anything at all to do with the inefficiencies of the Greek economy. The problems of Europe are many, but the biggest impediment to solving any of them is Germany.

    • Yiannis – Your saying that the Greek government deciding NOT to default is independent of their will power or character? How so? As much as I hate to admit it, it is they who are making the decisions. Maybe you are saying they are simply too stupid to understand what they are doing, I suppose it is a possibility.

      I agree a total default is the only answer but the only way that can happen is the the Greek political class show some backbone and take the decision. It cant happen otherwise.

      Guest – “Moreover, the ability of any eurozone country to manage its own economic (and even political) destiny lies in the hands of the European Union.” – You need to explain this point. Are you saying Greece cannot make its own decisions? If not, why not?

      “Germany’s leading role in impeding policy solutions for reforming the architecture of the eurozone is entirely self-interested and manipulative; it is in fact a disgraceful position which will go down in history as comparable with the two world wars that Germany is responsible for.” – Congratulations, you been completely brain washed by the media.

      “It has nothing to do with the many failings and corruption of the Greek political class; nor has it anything at all to do with the inefficiencies of the Greek economy. ” – So why is the Greek economy so inefficient? One or two real world examples please

    • I agree with Farage on most things, but classing the Euro as a prison is wrong.

      it is simply a gold standard and if the markets were allowed to work it would have returned the power to the people.

    • “The problems of the eurozone were not created by Greece,”

      Exactly. They were created by the French. Due to their inforiority compelx they wanted tp build a competitor against the dollar. So they they can act like they still are a key player in the world. Which they are not.

    • @Richard
      Yes, indeed I am saying that the Greek government has no control over its economy, like much of the eurozone. How can it be otherwise, with exogenously determined monetary and fiscal policies? That has been the intention of the Troika from the outset — to leave the Greek government with choices only about details, such as which state funding to cut and where to raise taxes.

      On your second point, I read little of the popular press and disregard it. My opinions are academic in origin, and specific to me. It is my personal and professional opinion that history will pass a very harsh judgement on Germany over this period, which will not be a lot better than happened in two world wars.

      Why is the Greek economy inefficient? There are many reasons, but mostly they relate to late industrial development, capital shortages in earlier periods, cultural norms that are unhelpful for efficient management, a political system that has created third world type structures instead of modern ones… But what is your point? This has nothing to do with the eurozone, other than (a) Greece was not in a condition to have been admitted, and (b) was the most vulnerable economy in the eurozone and therefore the first to be hit with the crisis. Both of these issues were well known to European policy makers, who chose to disregard them.

    • You statements are massive generalizations. They are so big it is hard to know where to start but let me try.

      “Greek government has no control over its economy, like much of the eurozone. How can it be otherwise, with exogenously determined monetary and fiscal policies?” – The monetary policies are extremely simple and unobtrusive and they boil down to balancing the books. The Euro is a defacto Gold standard and that should be welcomed by the people and feared by the politicians and the large banks.

      “to leave the Greek government with choices only about details, such as which state funding to cut and where to raise taxes.” – what?????? you lost me here, are you saying that a government controlling its budget is a small thing?????? Surely it is the only thing that matters? If not can you give me an example of something that is more important.

      “that history will pass a very harsh judgement on Germany over this period,” – for what reason specifically? I don’t doubt you are correct but for what reason?

      “Why is the Greek economy inefficient? There are many reasons, but mostly they relate to late industrial development” – okay but Greece is as developed as any other country now so this is not a valid explanation.

      “capital shortages in earlier periods” – Greece has be deluged with Capital since 2000, so again, not a valid reason for today’s situation of inefficient government

      “cultural norms that are unhelpful for efficient management,” – specifically what? And what is stopping domestic firms taking advantage of cultural norms practiced by their competitors in Greece???

      “a political system that has created third world type structures instead of modern ones” – this is the one and only reason for the inefficient Greek economy.

      “This has nothing to do with the eurozone, other than (a) Greece was not in a condition to have been admitted, and (b) was the most vulnerable economy in the eurozone and therefore the first to be hit with the crisis. Both of these issues were well known to European policy makers, who chose to disregard them.” – If Greece were allowed to default immediately in 2008 the sudden reduction in funding to the Greek government would have forced the reforms required by the Troika immediately, as the money would not have been there to maintain inefficient and obstructive regulatory practices enforced by the Greek government?

      In other words a default would have given the Troika exactly what they wanted at a much lower cost and instantly.

      It would have given Greece a short term shock where unemployment increased while the private sector absorbed the ex government employees but the long term prospects for the country would be rosy. (Actually Greece got the unemployment anyway so scratch that)

      In short a default was just what the Greek people and the Eurozone at large needed. ie the creation of a stable and balanced economy in Greece.

    • The discussion why Greece is inefficient leads nowhere. Some of the ClubMed countries have the productivity of third world countries (yes, lower than emerging countries). But the emerging countries admit that. Their peers in the EU want to have a living standard as in Holland, and they want other taxpayers to make up for the difference.

    • Richard, when you have written a formal economic study of the Greek economy, you can come back and discuss the details. Until you have done so, you are not competent to discuss it.

      Yes, these are broadbrush characterisations of what is going on. Do you expect me to write 20 pages of analysis without pay? And post them here? LOL The IMF has carried out a few studies where the analyses are pretty good — unlike the alleged remedies for the problems. You can find those and read them if it interests you, You will not find a single thing that contradicts what I or Yanis have said on the matter.

      The difference with the IMF, of course, lies in the ability of independent economists to give their judgements without political control. This applies more to future policy directions (which are political) than to structural analysis, about which there is little disagreement other than the role of the eurozone (again, political).

    • Pedro

      The living standard of the people was good before the EZ. And the inneffeciency of Greece ,AFTER THE EURO ,and other countries has many roots ,that are all tightly connected with your country. Even the rest of the south was becoming slowly inefficient. The only reason Italy and Spain are holding on ,not so much now ,is because of the momentum they had before the euro.

      In the euro the living standards dropped. So when you talk generally about living standards and use “live by your means” types of expressions ,try to fantasize ,how the whole world will come to think of you again as the worst human beings in history ,if you do not wake up soon.

    • Please do not assume that I want to keep the Euro! I was never in favor of it. It denies the people in the South an opportunity to work and puts unjustifiable risk on the people in the North.

      A currency is for the people, not the other way around. A currency that needs to be rescued is not a currency.

    • Pedro, you have it exactly backwards. The lower you are on the income ladder the better the Euro is for you. The problem is that politicians and banks know this which is why they are sabotaging the Euro system, with tax increases, more debt and money printing.

    • “The living standard of the people was good before the EZ”

      Greece has received EUR 130 billion of EU money before the bailouts. I hope it helped to have a good living standard, because otherwise this would have been a waste (since it was not invested).

      The EUR 130 billion are about 60% of Greek GDP. Germany received 4% of GDP via the Marshall plan. Just for comparison….

    • Pedro

      1. The money received were never used for the people of Greece that saw prices skyrocket ,bureaucracy increase ,false promises made ,welfare organisations gone bankrupt after the people have paid millions to them ,money wasted for purchaces of third rate military equipment from Germany and France and money going back to Germany because of corporation scandals.

      Let’s remind of ourselves the trip of Merkel in Turkey and this nice document that leaked about Merkel agreeing with the Turkish government to have the Turkish frigades loose at the Aegean so that the Greek government can explain to the Greek people the reason for more equipment. That is what is called illegal debt.

      Let us remind ourselves of the confessions of Turkish military officers about the attacks on Greek soil and the destruction of public property and land so that Greece takes on more debt for restorations.

      And more. MUCH MORE.

      2. About the comparison
      Greece never received a Marshall plan which is free money ,growth policies and knowhow as you did receive. That is how the German miracle came to be ,not because of your “hard work” only.
      While Greece was constantly manipulated from all sides because of its geographical location and cultural hatred.

      The money that came here were magically vanished as always. Follow the money and you will see something you will not like at all ,if you have the honesty to accept and admit it in the first place.

      3. Germany’s extreme development in the EZ was because of increase of loans so as to increase her exports and the usual shady deals.

      Germany still does not want to lower her production and increase your wages and domestic demand. Still ,the leaders know this can not continue ,so the only logical conclusion is to worsen the situation faster so that more wealth is being redistributed faster. Common staff. Nothing strange about it.
      ——————-

      The debt ,ANY DEBT,could have been easily handled. There would have been problems but not THE PROBLEM. They just didn’t want that. Nothing else. It is that simple. Add the immediate defamation of the Greek population instead of the state and you see the plan.

      It is all too evident to anyone that certain someones want this land.

      Germany is just a slave. Look behind it.

    • >>>the money that came here were magically vanished as always

      You are responsible to get your house in order. You elect the government. We cannot vote in Greece!

    • Hi, first off I’m not Greek and I cant vote in Greece.

      Second, you say we cant vote in Greece, that may be true but we can help the Greeks by not subsidising their incompetent government with bailouts.

    • n eu d

      The same goes for you. The point is ,that the people everywhere sleep until something bad happens. Thank God there are also Germans that understand this about their own government and how everything is interconnected.

      On the other hand there are others like a fellow who used to post here that said “We in Germany can not vote and change our government because we do not have democracy and everyone is the same. Why don’t you do something about yours?”
      And i answered something similar to your answer now n eu d.

      “Do you want the Greeks to exercise your own voting rights as well?”

      Sometimes things are a bit more complicated and they become even more ,when certain someones want to attack on a personal level through media propaganda that creates a “divide and conquer” situation ,while things are politically equally bad in Germany as well.

      So ,

      WAKE UP.

  • I really do not think the Germans are confusing a household with a state.
    Not anymore. They know exactly what they are doing.

  • One thing, the political crises in the Netherlands was NOT because of the economic crises, it was because Maxime Verhagen pressed his crazy idea to start a coalition/soapopera with the PVV (Party of Freedom). Nobody will do that again because Geert Wilders is clever AND political poison!
    That this coalition existed more than 1 year is something we can call a wonder. Anyway, it was the end of the CDA.
    Glad that the English professor pointed out that is a huge difference between Germany and other ((small) country’s like Holland.
    And I don’t understand why you have a professor to understand what happens in Europe because I am a simple (sic) handcraftsman who is working with his hands and understanding what is happen. No hope for the Greeks, that’s the keyword.
    A pity my (written) English is so poor otherwise I could write an analyze why the Euro will be blown by the Dutch….
    On they other hand the interest we are paying and inflation is extremely low. And thanks to the monopoly-money is our export doing very well…
    But for how long? And that will be the trigger…

    Best regards, Martin.

    http://en.wikipedia.org/wiki/Maxime_Verhagen
    http://en.wikipedia.org/wiki/Rutte_cabinet
    http://en.wikipedia.org/wiki/Party_for_Freedom
    http://en.wikipedia.org/wiki/Geert_Wilders

  • In the midst of a heat-wave and mind-boggling financial analyses, which I read with interest when exposed by you Mr. Varoufakis, I’d like to add a humorous note and share a song I wrote about Goldman Sachs. http://youtu.be/JRQrSEpeb5c (song link)
    I hope it puts a smile..Georgina

  • Apart from the “message” of the interview, which is quite clear and obvious (even if so many won’t get the basic facts even now) – let me just add that such kind of interviews, with an interviewer who seems to get shouted into his headset that he should always interfere??, is a bit of a self-repeating disaster. Nice that you get the time, Yanis, to talk there, but I doubt if such media can really make a change. They are mostly a part of the problem. Yet they are successful in their ways.

    Somehow it got forgotten that it does make a difference if a popstar relased her new cool (it est, following the wishes of many cool people) album – or if Greece and more countries to come are experiencing a great depression, and the eurozone-leaders fail to even see how their austerity policy made the disaster worse.

    It is, as long as you can go on with it talking against windmills, (and we all need to go on, talking to a few or via sky news) surely extremely important to do so. You never know if not a majority would wake up.

    But, face it, they’d wake up after wading through the mud of media like (in my country) Der Spiegel, Die Zeit, Süddeutsche or many more (not mentioning the yellow press). What Richard writes here is just what the vast majority of people in UK, Germany and with Hollande in France seem to think. Countries are like “monads”, may everyone clean up nice and tidily at home…. Yes, it is indeed working nicely often, the “household”-analogy.
    (What basic knowledge do the viewers of our news shows have today as they switch on the internet, TV and radio? Around 50% of people in most european countries and the USA think “democracy” means a deregulated market system. We see – there are studies – 50-60% of people not even knowing the basics of any political parties in their countries, let alone Europe. 40-50% don’t even take the huge step of going out of their houses – to vote every 4 or 5 years! This has many reasons, of course, I don’t want to bash „the people“ here. Media, people, politicians, intellectuals – it is much more difficult…Some, as an example, still think reading der Spiegel would be learning about leftwing thinking, even if der Spiegel was liberal-leftwing about 25 years ago and is not that way since at least 20 years…)

    Maybe it is worthwhile to sit back once a month and think about that. We’d all learn how the media spread their news that way, and to which results. Take whatever you want – media don’t care what the hype is about. Who profits after your BskyB minutes?

    Let’s take as an example out of the media – Mrs. Timoschenko and Janukowytsch? She is an oligarch like her ennemy. Both are utterly corrupt, like a lot of politicians in Ucraine (and not too few elsewhere). Still, the vast majority of our media praised – black and white-thinking – an “orange revolution” 7 years ago. As soon as we knew that was no real revolution at all – most media were just silent (finding out how much some media invented the „orange“ revolution would be far off topic, even if it would be important). The hype was over, but it was great that “we had talked about it”.

    We in the west simply thought, Timoschenko would be more EU-friendly than her corrupt ennemy. Now in 2009 amnesty international released a report about ucraine prisons. They were and are – in a horrible state.
    Not one german paper mentioned above reported during our next media hype this spring – that the very leader of the Ucraine during 2009 when the ai-report was written – was Julia Timoschenko!! (2005, 2007-2010, until the people voted her down.)
    (This is stunningly stupid. Yet the hypewriters without typewriters overlooked facts like these, with the laptop they thought it’s great Bob, okay, but one has to get the frustration out of years out of one’s body, isn’t it.)

    Now in 2012 we got another media craze, before the football „EM“. Football-players with no political interest whatsoever started to talk about Timoschenko as a sweet princess in press conferences, and so on. A horrible intellectual niveau. Nobody did mind. The „Süddeutsche“ wrote that it was nice that finally sportsmen would act political. (This indeed might be a joke of the year.)

    All of these hypes have not too much to do with facts.
    A message that both politicians were corrupt would have been all there was to say in this example. Timoschenko did nothing whatsoever to better the situation of people in jails in her country during her years as leader. Janukowytsch of course neither. Besides her and him a lot of politicians would rightly sit in jail but do not. This might be a reason Timoschenko might feel like a victim (“where are the others?” she might rightly ask.)
    Now a good journalist would tell us about the whole country, outside of media hypes…not following these timelines of hypes.

    Back to economics. There seem to be only few people who have the guts in most of the media to decide what might be more important for millions (a great depression) and what not equally much (the new album of a popstar.) What is important? In your case here, Yanis: a message has to be cut into 8 minutes.

    Maybe they’d never invite you again – but you really would – in a live show – make a difference if you’d, after one of those “I deeply apologize”-interruptions, say something in the lines of

    “Mr. Jackson and myself are proud that you invited us, thank you again. But would you kindly agree it was better not to interrupt us more than one time while we’re struggling to talk about such a mind-blowingly important disaster? Can’t you cut 8 minutes of the “beauty secrets” or just send 8 minutes more so we can finish our sentences??? You can always send the “beauty secrets” in a few years in case we succeeded to stop the great depression by 2018 so that a vast majority of now poor people could finally enjoy – and pay for – your “beauty secrets”. If they’d feel inclined to do so. It is too late now to interrupt us. It would never too late to cut the „beauty secrets“ and more of that about which people still can learn about in your online area, thank you.”

    The man within the media-system would not expect this…
    Well, just a thought. Great disasters at least set you free to stop thinking the institutions who handle the disaster so badly could be those who’d stop it – for all.

    The political institutions: Merkel, Schäuble, Lagarde, Hollande, Draghi and more think – it seems – they could rebuilt societies (“austerity” at the expense of fairly good-living for hopefully many or, better, all) and make the 10-30% richest richer, 30-50% should not rebel against such societies, and 40% – well. Just pretend to be “heart and soul for all people” and tell the 40% down there it was them you cared for. They succeed – the poorer 30% in Germany shout in vast majorities that „the“ greek people would be lazy and „we“ would pay their “lazyness” – echoed in most media – with our taxes. (Most of those poorer people I hear talking daily work heavily underpaid and cannot pay income taxes. About 1 650 000 go silently to our state to claim a bit more money just to pay the most basic things even though many work up to 50-60 hours per week within 2-3 underpaid jobs. Our 4 bigger parties in fact assist many companies by paying dumping wages. Against their own “the markets are always best for all” credo!)

    Many media – we need a scientific study about Spiegel, ZEIT or Süddeutsche, best since 1995 or abouts – write as if in reality there was no crisis! Some journalists, whatever they might think at night or while they stand before a mirror go on as if the search for the next hype was the success-recipe. And up to now it is…. The crisis as a hype, a nice story…not too important – not important „for us“…. They think they needed a hype to stay on top…the most of them have no financial problems, but journals and newspapers face tough times too since quite some years…

    So – why not telling some media sometimes that they are not too rarely a part of the problem, not the ones telling us about the world, as most of all people seem to think?

    • Im not sure about the rest of your post but if I can ask you to expand on this.

      What Richard writes here is just what the vast majority of people in UK, Germany and with Hollande in France seem to think. Countries are like “monads”, may everyone clean up nice and tidily at home…. Yes, it is indeed working nicely often, the “household”-analogy.

      Im not sure what your point is but let me ask you a question

      The Greek taxpayer does not want to plough money in the Greek govermment and I do not think the German taxpayer wants to either. So I ask again, what is your point?

      That everyone should be happy to bail out the Greek government including the Greek taxpayer?

    • Hi Yannis,

      This was in reply to klemperer85’s comment.

      My reply to your comment

      “There can be no sorting out of finances, for ANY member-state of the Eurozone, as long as it is caught up in the death spiral of debt, deflation and negative investment. Quite independently of the will power and ‘character’ of its ruling class.”

      was this

      “Yiannis – Your saying that the Greek government deciding NOT to default is independent of their will power or character? How so? As much as I hate to admit it, it is they who are making the decisions. Maybe you are saying they are simply too stupid to understand what they are doing, I suppose it is a possibility.

      I agree a total default is the only answer but the only way that can happen is the the Greek political class show some backbone and take the decision. It cant happen otherwise.”

      Basically it seemed to me like you were saying the problems in Greece were separate from the politicians, my point is that the politicians in Greece are the culprits who turned a recession into a depression.ie they are not independent from the crisis, they are at the heart of it.

  • Instead of a 8 minute segment, this topic deserved at least an hour, with the moderator keeping his head out of the discussion. However, not something you can expect on a commercial mainstream medium

  • I hate (not really) to break it to the German readers but the German giant Hochtief ,shareholder of the airport “El. Venizelos” didn’t pay taxes owed. 163 million euros.

    Nothing new for the German corporations. They want to go to court so as to avoid paying and they want to transfer the case to England.

    http://eleutheriellada.wordpress.com/2012/07/15/%cf%80%cf%8e%cf%82-%ce%bf-%cf%86%cf%80%ce%b1-%ce%b1%cf%80%cf%8c-%cf%84%ce%bf%ce%bd-%ce%b5%ce%bb-%ce%b2%ce%b5%ce%bd%ce%b9%ce%b6%ce%ad%ce%bb%ce%bf-%ce%ba%ce%b1%cf%84%ce%b1%ce%bb%ce%ae%ce%b3%ce%b5/

    • Like the UK and USA, German companies and politics are dominated by neoliberal crooks. They defy the rule of law, then appear on tv and in newspapers to spin their pathetic little morality tales. The real problem is not even that they behave like this: it is that Germans, British and Americans are too stupid to work out what is going on. Pitiful, but it reflects the continuously declining average standard of ability of the populations of those countries in the last two decades.

    • Sorry Demetri but Hochtief is a subsidiary of ACS so it is Spanish not German. If you try to bite the hand that feeds you, find the right one at least 😉

    • Maybe they do not want to pay, because the Greeks do not pay the road tolls on their road projects?

    • Ignorance disguised as knowledge. Have you ever driven up and down Greek motorways? If so, you might have noticed that everyone keeps paying. The only occasions when there was non-payment were a few staged events.

    • Nicknow

      If it is Spanish ,then it is Spanish. But is it Spanish?
      Who are the major shareholders? The name ACS tells me nothing.

      I bite the hand that steals from me ,starting with my own government.
      Especially me and people like me ,noone feeds.

      Thank you very much nicklater

    • ACS (www.grupoacs.com) borrowed a few billions from a (now most likely bankrupt) Spanish bank and bought Hochtief with that money.

      There is rumour that ACS was almost bankrupt at that point in time and lives from Hochtief cash now…

  • How do you put up with these media clowns Yannis – I am laughing in astonishment as the “interviewer” has to interrupt both of you every time he asks a question – even though you are finishing your points – so as to jam you into a ridiculous close time schedule bounded by commercial interruptions.

    God almighty, it is no wonder the world can’t figure out it’s problems! People don’t even have access to a simple discussion about the issues of the day! Imagine a mind that worked like that – “Well, I suppose we could come out of our troubles if…ZAP! I sure can’t wait to test drive that new Audi – ah yes shampoo is wonderful… a sale on men’s shirts!”. Thrown straight into the nuthouse, for sure.

    I can’t shake my head enough at the state of journalism today – you’re a brave and patient man to put up with the necessary work of informing the public through such ridiculous media outlets such exist today. Thanks Professor.

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