The Modest Proposal in N. America: First stop Austin, Texas

For the next fortnight, posting will be intermittent and a little sparse. This is because I shall be on the road, on a lecture tour that will begin in Austin, move to Toronto and end up in New York. For details, see here. For now, I shall leave Greece safe in the thought that our Prime Minister is on the verge of falling on his sword while our European leaders are scratching their heads, wondering what on earth they agreed to last week in Brussels. The only people having fun are the hedge fund managers (for reasons I shall delve in once on American soil). With all these thoughts in mind, perhaps there is no better time to leave Europe and head for America to debate our Modest Proposal for Resolving the Euro Crisis. Below I past the complete program of the University of Texas conference on the Modest Proposal, as organised kindly and with enthusiasm by Professor James K. Galbraith.

Crisis in the Eurozone

A Workshop of the EU Center of Excellence At  the LBJ School of Public Affairs The University of Texas at Austin

Thursday, November 3, 2011

8.00 Breakfast

8.30 Welcome Prof. Douglas Biow

8: 35 Introductory remarks from Maciej Pisarski, Deputy Chief of Mission, Embassy of Poland

8:45 Opening Remarks from Conference Organizer Prof. James Galbraith

9.00 – 10.30   The European System: Dream or Nightmare?

Chair: Professor Gary Freeman

  •       Bruno Amoroso, Roskilde University
  •       Terri Givens, The University of Texas at Austin
  •       Alain Parguez, University of Besancon

10.45 – 12.00   Why the Crisis in the Eurozone?

Chair: Professor Frank Gavin*

  •       Heiner Flassbeck, UNCTAD
  •       Robert Guttmann, Hofstra University and University of Paris
  •       Jan Toporowski, University of London
  •       Gilles Raveaud, Institute of European Studies, University of Paris

12.15 Lunch.  Cosponsored by the MGPS International Colloquium Speakers’ Series

Welcomes by Dean Randy Diehl and Dean Robert Hutchings

Speaker: Yanis Varoufakis, University of Athens, “The Modest Proposal”, introduced by James Galbraith

2.00 – 3.30.   Can the Modest Proposal Save Europe?

Chair: Professor Jeremi Suri

  •       Joerg Bibow, Skidmore College
  •       Zachary Karabell, Time Magazine
  •       Kunibert Raffer, University of Vienna
  •       Yanis Varoufakis, University of Athens

3.45 – 5.15   Eurobonds, the Green New Deal and other Euro-Solutions

Chair: Maciej Pisarski, DCM, Embassy of Poland.

  •       Marshall Auerback, Levy Economics Institute
  •       Olivier Giovannoni, Bard College
  •       Stuart Holland, University of Coimbra
  •       Thomas Palley, Economics for Democratic & Open Societies

Friday, November 4, 2011

8.30   Breakfast

9.00 – 10.30 If Europe Fails Chair: Professor Michael Brenner

  •       Steven Cohen, University of California, Berkeley
  •       Norman Birnbaum, Georgetown University Law Center
  •       Richard Parker, Harvard University
  •       Aurore Lalucq, Institut Veblen

10.45 – 12.15 Concluding Roundtable

Chair: Professor James Galbraith

Amoroso, Flassbeck, Holland, Parguez, Raffer, Toporowski, Varoufakis


  • Enjoy the tour dear Yanis, as you attempt to save the day for Greece – and Europe in that respect… Please also explain to the attendees why not all Greeks are imbeciles or corrupt! You are yourself a vivid example! I would give my … right fingernail (!) to join you in this tour – if I had the chance…

  • I now wonder whether there will be any Europe -as we know it- left to implement the Modest Proposal, or any other proposal for that matter.

  • You should also give some lectures in Europe as well. Perhaps in Glasgow, where you used to lecture for a while. Good luck and drive safe

    • Seconded, as a Glaswegian! I thought, how about the Royal Phil?
      (Their 2011-12 programme is fixed, but there might be a drop-out?)
      Or maybe you have contacts at the university.

      Also hope you get to speak with OWS at some point over in the US.

      Have a good tour!

  • Very impressive; Please give some thought to arranging for someone to provide us with a reflection of the substance of the meeting from the an adjunct to your own report.

  • Best of luck Yani.

    Of course the Modest Proposal can save the euro.

    It so happens that all other ideas/methods/proposals are simply immodest.

  • I am so excited you are coming to Austin. Sounds like a great conference, I hope to be able to secure access!! I really appreciate your work.

  • Best of luck on your US tour, Yanis, and I sincerely hope to see you on the front page of the NY Times next week! In addition I hope to see you on the evening news hour at Channel 13 in NYC (Public Television) , and hear you on NPR National Public Radio. Lastly why not throw in a few late night talk or two while you are in NYC? That is where we can see so many our political candidates selling their wares, after all.

    By the way is it only a coincidence that the referendum in Greece was announced as soon as you left the country? By my count. you must have taken approximately 5 million people potential voting Greeks on the plane with you too? 🙂

    T. Samaras

  • Best of luck on your US tour, Yanis, and I sincerely hope to see you on the front page of the NY Times next week! In addition I hope to see you on the evening news hour at Channel 13 in NYC (Public Television) , and hear you on NPR National Public Radio. Lastly why not throw in a few late night, television talk shows while you are in NYC? That is where we can see so many our political candidates selling their wares, after all.

    By the way is it only a coincidence that the referendum in Greece was announced as soon as you left the country? By my count. you must have taken approximately 5 million people potential voting Greeks on the plane with you too? 🙂

    T. Samaras

  • Good Luck on your US tour Yiannis! I hope you visit us soon in Luxembourg. You should come and visit University of Luxembourg where i am currently student in Finance!

  • Best of luck on your US&Canada lecture tour. Excellent timing, as the surprise move by the greek gov to hold a confidence vote Friday and a referendum (potentially in late Jan12, provided that it will win the vote, something that I strongly debate) seem to shift the tectonic plates of the EU debt “deal” (?).
    Hope that a new proposal would eventually approach your modest proposal, before situation gets really tough forcing Germany to exercise the Eurozone exit option.
    Looking fwd to meeting u soon,
    Dreaming of joining u in your next tour (maybe in Europe)…

  • I hope you can also discuss growth projects for the Greek economy in addition to the debt issues. The fast one which Mr. Papandreou pulled last evening could really be an opportunity. If the threat of a referendum is used to beef up the present plan with a few billion EUR for private sector investments, it would be brilliant. If it is his true will to hold a referendum, it would not be wise. I hope it is the former.

    • Klaus:

      I think the referendum’s purpose is to point the inadequacy of last week’s solution (another kick the can down the road from Merkel).

      When PM Papandreou went to Brussels last week, he pleaded with all Europeans for an effective and final solution. Instead he got more of the same.

      Can you blame the guy?

      Personally I feel Papandreou has been a bit naive and romantic towards EU solidarity and partnership. There is so much that a man can take on disappointment before deploying alternatives. This has been the most brilliant move Papandreou has ever made and I am not his supporter. I like reason and discipline and charisma and I will get it from the left, right or center; it makes no difference to me but it has to be logical. Nonsense turns me off completely.

  • Yanni, I have an amusing question:

    Let’s say the prime minister spread-bet the entire greek GDP on a violent european market loss with a contract that expired, say, friday. And let’s say the bet was placed before the announcement of the referendum. Is the spread he’d have to bet on such that he’d make enough money to sustain the country for some months?


  • On the latest developments in Greece and the proposed referendum:

    Germany is responsible for this mess and only Germany.

    Despite the overwhelming consensus that only Eurbonds can save the day, Germany insists on the path of nonsense and half-baked measures.

    It’s about time that Germany understands that she has been check mated. Game over.

    If you don’t understand the details, think of it this way:

    Last week Fitch declared the Germany-led PSI nonsense package as equivalent to Greek bankruptcy.

    The first reaction from Germany about the proposed Greek referendum was also to threaten Greece with bankruptcy.

    So, in either case the prescribed solution for Greece is bankruptcy. If you are a Greek does it really matter whether you have an orderly or disorderly bankruptcy? Absolutely not.

    In fact it’s the patriotic duty of all Greeks to cause maximum damage to Germany for all the lies, deceit and ill-meaning behavior exhibited since day one.

    How do you like them apples?

    • I don’t think that we should stigmatize entire populations by the actions of their governments. Yes, the Germans bare an enormous responsibility as Europe’s most populated country and largest economy. I acknowledge the lack of leadership in Europe in general, but also in the German government.

      However, the Greek government as do the Greek people bare a lot of responsibility for the current situation as well… I don’t think this kind of rethoric is of any good. It’s not time to point fingers… but to work in constructive solutions without exacerbating nationalist feelings…

    • Dear Dean
      Whatever happens – two things are clear already if I get you right:

      1. Greece never did anything to get itself into this mess.
      2. Everything is Germany’s fault

      I obviously don’t share this view and think it is not too helpful with regards to solving this crisis.

      I can see that Eurobonds in principle are a beautiful idea. Especially for Greece. But why would Germany want to officially guarantee the debt of Greece that has proved for years and years that it is neither able nor willing to handle its state’s finances in a responsible way?

      As long as Greece refuses to live within its means (and it has done so for decades now), being in any kind of union with them will always mean Germany has to finance them.
      Honestly, I don’t see why Germany should have to do this. Greece has been one of the main beneficiaries of the EU redistribution system. That was not enough so it took on huge debt and lied about it. It sneaked its way into the EURO so it could take on even more debt while the interest rates went down, making it cheaper to service the debt (providing a window of opportunity to bring debt down which passed unused).
      I like Greece in principle but being in any kind of economic (or monetary) union with them is suicidal.
      There are many other nations that would need (and probably deserve) Germany’s assistance more than Greece.

    • Dear Dean

      One more thing: I think it probably makes quite a difference whether a default takes place in a chaotic way or not. Certainly for Greece’s creditors – but also to Greece itself. A default is not fun. But I am quite sure that it would be even more painful if it was a chaotic one. But Greece can choose – nobody can stop them from going for the chaotic, damage-maximizing variant if they truly want to. That would be like scoring an own goal (plus anti-social versus Euroland) but you can choose in the referendum!

    • Default or not to default is not really a question .
      Greece was to default 2 years ago .

      And it matters greatly if Greece was forced to default by its creditors or was defaulting according to its own interests .

      The real questions is not what to do BUT whose interests are we serving ? And who’s implementing the “solution” .

      The patriotic duty of Greeks will be to care for their own interests . If that means that Germany gets damage , so be it . But this is not the main goal !!!

      It’s not a time for revenge . It’s time to act to regain our sovereignty !

  • Yanis- do you think greek voters will approve G-paps referendum question ?

    • What is G-paps referendum question ? When is it going to take place ? These questions if are left unanswered , they turn this public voting as a non-event .
      It is more a statement to accelerate things in international markets than anything else , if you ask me !

      Probably , next week Papandreou will state in complete contradiction that he will form a wide co-government and be on power until 2013 .

    • But again , if this co-goverment is formed , it will fall the same minute . If greek people is holding him/herself is because there are parties in the parliament against “european deal” . As soon as they form one big government , people will go into arms !

  • Dear Yanis
    All the best for your trip in the US!
    I am wondering what to make of the news that there shall be a referendum on last Week’s agreement in Greece.

    What if the Greek population votes against it? Wouldn’t that mean that finally, the EU would give up on Greece, stop (or significantly reduce) any further loans / support? Then, there would be a Greek default – but possibly a chaotic one.
    We may seem pictures of pensioners queing in front of banks failing to get a hold of their savings – or their monthly check.

    For Europe, this may be a cruel ultimately ok outcome. After all, this permanent drama may be over. Greece could have a major default (possibly only honouring 25% or so of its current debt), the Greek financial system would collapse and the EU could try to isolate itself from Greece’s implosion. That would cost a lot of money, not least for the support necessary for Euroland banks that may need assistance if the Greek default is more major than agreed last Week.
    But for Euroland as a hole, this could be a (not pretty) solution: Greece could finally leave the Eurozone, default on its debt (which it has to do to some extent anyway) and then re-introduce the Drachma which will make regaining competitiveness easier than when remaining in the Eurozone.

    For me, this sounds like quite an ok plan.
    Do you think Papandreou is (maybe secretely / subconsciously) hoping for this outcome? Or does he think the Greek population will give him a proper mandate for austerity?

    • “Euroland as a “hole” ?!! ” Very accurate expression if you ask me ! 🙂

      My personal opinion is that in order to comprehend what is going on , you must focus on :

      a) What is this agreement ? Is it on paper ? Where is it?
      b)When this vote is going to take place , 3 months from now is a lot of time , so long in the future as to be considered as a non-event .
      c)What would be the question of this voting

      Other questions that these , are purely philological !
      It’s more a distraction or a hedge fund order to attack than anything else !

      Again this is my personal opinion . I deeply sympathize with your agony for the interest of your country . But please keep in mind that for greek people , it is more struggle for survival than keeping our investments safe .

      P.S. Greek people is not Greek government / greek financial elite

    • Dear Ilias
      “Europe as a hole” was a typo – but truly quite appropriate when we look at what has happened to the project of European unification over the last 1.5 years.

      I do sympathize with the Greek population. What they went through in the last 12 months was not fun – and what lies in front of them won’t be fun either. I hope the government will be able to let the rich carry more of the burden and let the middle class and poor people as much unharmed as possible under the given circumstances.

  • I thought I’d never say this… but for once I believe Papandreou has some (and please forgive me, but just I don’t know the politically correct term for it) balls! (for better or for worse). He has presented the Greek people with the opportunity to emulate Iceland… is that a good thing? you tell me. He intends to make the Greek people responsible for approving (or not) the referendum and clean his hands… It’s weird, but this is the first hint of a real (and direct) exercise of democracy in Greece (or in Europe for that matter) in a long time, yet everyone else is upset that the people directly affected by the measures agreed in Brussels are even asked for their opinion !

    I guess now is up to the Rest of Europe to convince the Greek people that they should approve the referendum and support the EU, comply with its conditions and ultimately surrender its sovereignty. After all the bashing and stigmatization of the Greek people… good luck with that!. Whatever the outcome, the question remains… what happens next… and to the rest of Europe? Would love to hear your thoughts on this and of the possible outcomes… how would this change the modest proposal…? In my opinion the current situation has more than one responsible, but it’s not only the Greek people…

    Greetings from Ottawa… too bad the Toronto conference is already full 🙁

    • I also never thought I would say this, but I have become a Papandreou fan almost. How can one not respect someone who has the whole world against him?

    • Greece is a constitutional republic and not a democracy. Forget about referendums. (As if Europe is going to sit around and wait 3 months for a referendum result …) What Greece needs now is leadership, which sadly it does not have.

    • Greetings from Ottawa… too bad the Toronto conference is already full

      At the door, just say you’re with Yani 😉

    • Expressing my personal opinion , Papandreou’s statement about conducting a public voting is a ridicule of Democracy . I would give 5 reasons for that .

      1) This public vote will not be conducted sooner than January 2012 according to Papandreou himself . That is a long long time , especially in our times . We would be declared default by then , anyway .
      2)There is no european agreement so far to be put on voting . According to Mr Varoufakis statements there are no details , no written official paper , thus no agreement . It’s more a media manufacturing .
      3)Public voting is very much dependent on the question . Which is that question? It can be used as a weapon against greek people , knowing that we are very angry against the government
      4)Greek PM and ministers are infamous in Greece for their connections with international hedge funds . Many times in the past , their statements were combined with coordinated moves in stock exchanges and global press . Don’t be fooled by statements from Sarkozi , Merkel and Obama that they knew nothing .
      5)The dishonesty of the proposal of the PM is evident by one more fact. He is proclaiming such a thing , at the same time that his government is on the brink of collapse , when such effort is destined to fail .

      As a conclusion , in Greece , for me , this is just a big theatrical interplay designed by image makers , so that both parties are united to form one government , and sign the “european deal” or else the death mark of Greece .

      Keep in mind that loan agreements have not been voted as bills in the parliament because they contain terms of giving up sovereignty . As soon as greek law is concerned , what has happened the last two years is unconstitutional and illegal . That’s why they need the grand co-government and extreme conditions to vote such bill from the parliament .

      And fellow europeans , don’t be to sarcastic about Greece . What would english people have done if they were to surrender english sovereignty to french people?
      What french people would do if they were to surrender sovereignty to german people ?
      What is happening in Greece , if they succeed , they will come to you next !

      You must support greek people (not the government) for resisting against slavery and totalitarianism .

  • Yanis,

    in Europe alone, 500 million people are in between skylla and charybdis, politicos and markets, the former can shut the latter down, and so they should.

    You should be in Cannes instead and people forced to listen at least to what you have to say.

    Greece needs a solution that is HELPING GREECE and in so far HELPING EUROPE. If that means to take the IIF by the balls and squeeze over the damage barrier, then that is exactly what is required.


  • It sounds like an excellent program. Best wishes for the trip.

    Why has Mr. Papandreou seemingly fallen on his sword? His action in calling for a referendum has completely reversed my opinion about him. How could someone not feel bad for him when the whole world is against him? I do not understand why he did such a thing that will surely cause his government to fall and burn all his bridges. I used to think that he would have plenty of influential friends to take care of him when his term was up, but now I believe the other leaders will treat him as a pariah. Also, I believe the Greek people view this as some sort of trick. Thus, he is left with no supporters. It is sad, especially since what he is proposing could help Greece. An election will likely lead to the New Democracy party win (I think?), which will likely implement similar policies, with perhaps fewer taxes.

  • Papandreou statement for public vote is a THREAT of public voting .
    It is a signal to international stock markets and hedge funds .

    Why? Because there is no question , no EU agreement to be questioned upon , no political power to implement it .

    • If the question is YES or NO to the Loan agreement and its terms . THEN he would gain wide acceptance from greek people , thus he will have power in his party as well .

      But again would it be this question?