The Brussels Eurocracy is embracing eurobonds. But they seem determined to hold the wrong end of the stick

Only yesterday, La Stampa (Turin’s daily newspaper) reported that Brussels is contemplating three possibilities regarding Eurobonds. The paper is quoting from the so-called Green Book on the Feasibility of Stability Bonds:

(1) complete transfer of national treasury bonds to a European agency with joint guarantees (EU and member states)

(2) Blue vs Red bonds, with the former covering the Maastricht compliant debt 60% (as per our Modest Proposal and that of Breugel)

(3) Keep national sovereign bonds but have them deposited and guaranteed by some EU agency.

My reaction? It is good to see signs of intellectual life coming from Brussels. Alas, the proposals, while in the right direction, are similarly flawed in one particular respect: They require Treaty changes that will never come on stream before the eurozone has collapsed. They insist on the notion of eurobonds backed by member-states (jointly and severally guaranteed by national treasuries); a notion that is not only in contravention of the Lisbon Treaty but also financially problematic as the interest rates these bonds will incur will be some weighted average of Germany and the periphery (rates, that is, which are too high for Germany and not low enough for the periphery). If only Brussels could take one more subtle, yet crucial, step in the direction of the Modest Proposal, their plan would acquire both credibility and persuasive powers. Which step? The recommendation that the blue bonds are issued (or backed) by the ECB. In its own name. Without German guarantees.

Lastly, I very much fear that Mr Baroso’s Commission is putting these ideas about in a game of chess with  Berlin and Paris; in order to assert his authority; as a protest at the effective sidelining of the Commission. If so, the Green Book’s eurobond proposals will be blasted out of the water by a German government determined to take matters in its own hands and to, in this sense, push Brussels into the margins of EU decision making.


  • It’s a thriller, and I am in it, as everybody. I cannot run away (as I always do when watching one which is too scary) or out of it and though I dislike Hollywood films: they mostly have a good ending so I would like to ask Steven Spielberg to create an ending with the disappearing of all the bad guys….. There is a good one missing, until now… can you give me a name who will be or is the James Bond here?

    • That is even worse! Because that means that I am in a car, and I don’t have/like a car, because of ecological reasons, and being a realist for using money in a better way.

      Being in a road trip movie means that I am in USA and I don’t want to be in USA, because of their cowboy-past and the Indian holocaust there,

      I don’t want to be in a road-trip-movie-place. It is decadencial. All is decadence in the capitalistic world.. But I am an optimist, because I am sure this leads, as all phenomenons in the eternal changing processes of mankind, to a zero point from where a new society can be built up with a grown awareness and with higher/deeper values.

      For myself I had found (after posting the former comment) a kind of a new Banking Bond, the “James” Bond. 🙂
      Ian fleming (the creator of James Bond) has written many books (I found in wikipedia, I never read them) with titles which fit in the European crisis and politics of today….

      Thank you for your reply :), because after posting I felt a bit stupid to see myself among all the clever answers next to mine….. I am completely “green”, in the meaning of blanco concerning economics in the banking-behind-the-screens level, but really proud to be “green” in the meaning of “clean” in the ecological and environmental way.

      But still loooking and waiting for James Bond in its real meaning: the one who will be there to fight/conquer the bad guys, with success. I think it is Yanis Varoufakis…. This is not a joke, though it is nice at the same time. But James Bond is here meant as a metaphor.

    • Maybe a thriller road trip?

      Antoinette, I don’t think we’re looking for a ‘James Bond’ – after all he represented the government and killed people on thie govt’s behalf. Looking for a hero to come from within any of these govts is futile. Yesterday, Spain put the conservatives back in power who were ‘on watch’ while Spain built the economic house of cards that is now crushing them. Almost the same with Greece with the ‘technocrats’ rise to power – essentially another conservative govt with a trick name.

      Perhaps a ‘James Bond’ anti-hero hero is what we need, to take out the fake heros who are showing themselves to just be another traitor to the people of their respective countries. The ‘man with no name’ may be what we’re seeking.

    • @David Sheegog : A bit late with answering your answer on my answer 🙂 because I am in the middle of a moving from Netherlands to Norway….. (a huge step), but in the comments now for a minute: Yes you are right about James Bond.
      Have to add: I am not really a fan but it came into my mind, maybe because politics in Europe (I follow them again, since Yanis Varoufakis’s explanations on Dutch tv, watching in Norway on internet, after many years (thirty) ignoring them completely) , also politics in common, go, as we have the expression in Netherlands: over dead bodies. What is happening in Greece: there is “James” Samaras, just taking “all the time in the world” (John Barry composed it) to get what he wants, there are James Bonds everywhere: shooting when needed, in a symbolical way. No, I don’t like these Bonds at all.
      I search for an (h)armless James Bond, not with shooting guns, but with shooting brainwork, to get what he wants. And with the inner power I recognized in Luke Skywalker when he was in a fight with Darth Vader. Incredibly strong. And then it happened. (D)Evil lost.

      Going on now with packing… 😉
      And here on moments because my body needs to rest also.
      I am not that young anymore.
      See you all later then!

    • I have made a mistake: I say: “…there are James Bonds everywhere: shooting when needed, in a symbolical way. No, I don’t like these Bonds at all.” You have to think away the word “symbolical”.

      Later I speak about the symbolical James Bond. Important to notice.

  • I recommend reading Mervyn King on “lender of last resort”:

    “This phrase ‘lender of last resort’ has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means, to be perfectly honest. It is very clear from its origin that lender of last resort by a central bank is intended to be lending to individual banking institutions and to institutions that are clearly regarded as solvent. And it is done against good collateral, and at a penalty rate. That’s what lender of last resort means.

    That is a million miles away from the ECB buying sovereign debt of national countries, which is used and seen as a mechanism for financing the current-account deficit of those countries, which inevitably, if things go wrong, will create liabilities for the surplus countries. In other words, it would be a mechanism of transfers from the surplus to the deficit countries. That’s why the European Central Bank feels, and with total justification, that it is not the job of a central bank to do something which a government could perfectly well do itself but doesn’t particularly want to admit to doing.”

    All your bond proposals are just code speak for pushing Greek debt on German taxpayers, no matter in what colour you paint them. Start keeping for once to commitments, balance the budget and tax your own citizens.

    How about you come back with proposals about “good collateral” and accepted “penalty rates”? The Papandreou and Karamanlis (Samaras) families have less credibility with me than a 5-year old, who promises he will go to bed without Fuss after 15 minutes more TV.

    Mr Barroso is sidelined because he is delusional

    • You just put forward a manifesto for the dismantling of the EU. I respect the view that the EU must be allowed to shrivel and die (even if I do not agree with it). What I cannot countenance is that views like yours are consistent with the European integration process. (Unless you would like the rest of Europe not to contain Greeks, Italians and other riff-raff.

    • To genauer

      I wish you had phrased your comment a bit more politically correct because I would agree with the substance of it (the way I understand it), but it comes across very provocative and divisive.

      I am definitely not the only “European” who has never read the Lisbon-Treaty and that is a reflection in and by itself about the EU. In contrast, I have read the US Constitution and the Federalist Papers leading up to it several times. Americans agree that their constitution is the pillar of their society even though they often disagree on its interpretation.

      Not having read the Lisbon-Treaty for its complexity, I think most Europeans interprete the EU as a construct which intends, say, to turn Greeks into Germans and have it run by a bureaucracy out of Brussels.

      In actual fact, the EU can/could only work if it manages to house different cultures under one roof without trying to merge and/or destroy them. One cannot synchronize cultures! Synchronization doesn’t even work with light bulbs, much less with people. Not even within Germany can one synchronize the Bavarian culture with that of Northern Germany.

      But there have to be some basic “shared values” for a union to work, particularly a union of different cultures. The Austro-Hungarian Monarchy managed to unite a multitude of different cultures under one roof for a few centuries. Their “shared value” was the family at the top.

      And this is where I cannot avoid pointing the finger a bit into the direction of Greece. I cannot believe that the small Greece would have been such a hot topic of discussion in the last 2 years if Greece, the “inventor” of many European values, had not departed from such values in such a dramatic way in the last decades. I mean, when the President of France, in rage or not, says that “Greece does not have a state of law”, then that means something!

      I think one of the basics of any society is solidarity within it. When tax-paying Greeks have for years been taken for a brutal ride by the other Greeks, that is not solidarity. When there are 60 BN€ of unpaid taxes (mind you: not taxes that have not yet been found; instead, taxes which had already been assessed!) and 165.000 pending law suits over half of them, then this is not solidarity nor a state of law. When political parties have for decades brutally pursued their own perks against the interests of society as a whole, that is not solidarity. When even monasteries cheat the state out of millions with questionable real estate deals, that is not solidarity. We all could go on and on.

      To me, in this problematic situation lie also the roots for change. Once one recognizes/admits what chaos one is in and why, it becomes a lot easier to start changing it. Unfortunately, there seems to be a lot of doubt whether this can ever be changed. I always tend to be on the side of enthusiasts who cry “yes, we can!” change it. I have to admit, however, that my Greek friends, “experienced Greeks”, tell me to come down to reality and accept the fact that this will never change.

    • Hey you should see the bailout positive. The greek banks are really taking ggod care of the money:

      “The ink wasn’t even dry yet on the European bailout fund, the EFSF when it paid $1.3 billion to bail out Proton Bank in Greece. Turns out, Proton had siphoned off $1 billion in a scheme of fraud, embezzlement, money laundering, and offshore front companies, according to the Süddeutsche Zeitung. And then a bomb exploded.”

    • Mervyn King is one of the few people anywhere that has grasped the nettle of debate and spoken in plain English about what is wrong with the present economic system.

      You do not fix a puncture with a new square wheel.

    • @Klaus Kastner.
      Please bear with me on this analogue: The healthy human body is never virus and bacteria free. There is an appreciable number of bacteria and viruses coexisting within the human body, held in check by the antibodies. The body falls prey to disease when the virus population for some reason becomes so large as to overcome the natural defenses of the body. The optimal solution is to increase the strength of the defenses of the body while at the same time diminishing the overflowing virus/bacteria populations back to normal levels.

      What does this have to do with the price of tea in China? Have a look at the eu anti-corruption report .

      Corruption is a problem even for 20% of the citizens of Denmark, it seems. And I would say that Denmark is one of the countries with the best antibodies.

      This wikipedia article is also indicative . Even though the non puritan countries have less purity, ALL countries have some corruption issues, because all countries are composed of humans.

      What has been happening in Greece in the past few decades is that the population which followed the cicada ( virus in my analogue)model in Aesop’s fable grew a lot, while the ant population ( antibodies) was diminished and repressed. And now winter is coming and the virus is threatening with death the whole body/economy.

      Various congruent changes ( discussed here before) convinced the majority of the young ( and not so young) of two generations that it is easy to fool the system and sing through life without toil. I would even blame the Spock generation, which brought up their young as if there will never be any hard times again and all the princes and princesses are due the good life and should get it anyway anyhow.

      The moral of this parable is that instead of the puritan countries showing horror at the impure ones and washing their hands of the problem, a reform path should be helped along in parallel with an economic recovery, to contain the corrupt section of Greece or any other eu country within the levels that allow for a viable economy.

      Ουδείς άσφαλτος 🙂 .

    • To anna

      Although your example does have an analogy , lets all avoid examples with patients and doctors / virus and medicines .

      To Klaus

      Also i agree more or less with what you say . One comment though , whether Greece can change or not . I have written it in the past and i am going to say this once more .

      Whoever don’t believe in change , he/she is part of the problem as well.
      I am not saying that in a threatening way . But , is it not too egoistic to believe that if they can not find a solution , nobody can?

      To my understanding , there are two honest kinds of people who are part of the problem in Greece .

      The first who are deeply disappointed , have tried and failed . They have turned into discouraged and suspicious people that they talk ill-mannered on every attempt for change .

      The second group of people believe that powers at be cannot be overturned . That in a way , it is more effective to align with the current state of things .

      Greece will change when their main issues and problems are analysed in a methodical and organized manner and address them in a creative way . Greek political system , in general , don’t solve problems .

      Some small examples : if there were jobs in Greece , families wouldn’t bother MPs for that .

      Tax system and justice system completely blacked out during the last decade . Why?

      Is there Democracy in Greece ? Do the political parties are legally accountable for what they promise before elections with what they do after ?

      Things can not change with an election . Problems can not be solved by passing bills in the parliament . We have to work collectively ourselves out of this bad condition and into a sustainable path . And that can not happen overnight .

      i am not referring to the current crisis which is an exception , where general rules don’t apply

      But a political leader , giving the right example first , would certainly help . Example of Alexander the great is well known .
      For instance , greek super rich people are tax immuned legally , but the government cuts benefits from handicap people .

      Sometimes , listening to new government measures , i wonder !? Do they want to destabilize greek society ? Do they want people to literally attack them?

  • You are right. It’s a PR game and watch on Monday how Germany denies the whole thing.

    The game movements have become so predictable that you don’t need a white observation room at the asylum anymore:

  • Dear Yanis,

    I tried to reach you a few weeks ago via your email address at your university department in Athens. Alas I didn’t hear back from you. Being flabbergasted by The Global Minotaur still I wish to ask you for the proper document in which UNOCAL vice-president Maresca supposedly talked about the invasion of Afghanistan, prior 9/11, for the two reasons you summarize. The link you had seems to be closed, deleted, and material I found doesn’t mention reason number two: the liberalization of Chinese capital movements in and out.

    Sincerely yours,

    Wouter Krijbolder

    [email protected]


  • The whole idea of Eurobonds is absolutely ludacris. There is no debt crisis. There is a banking panic. Put the derivatives monsters through bankruptcy, delete Toxic derivatives and force the ECB to issue 0% credit for production only. Trillions at a time. No panic, no depression, not even inflation if it’s put to hard production. Europe is sick of half measures and bankers rule.

  • Yanis, I still don’t understand how you can state that your Modest Proposal would be within statutory powers of the ECB and a member of the ECBs Governing Council tells me that it wouldn’t. I mean, you can’t both be right.

    • Sure. We cannot. One of us is wrong. But is this the first time that you encounter two conflicting interpretations of the same piece of legislation? I have put two professors of constitutional and european law onto it. One from the University of Vienna and one from Paris IV. Both tell me that nothing stops the ECB from issuing bonds while at the same time creating debit accounts for member states (in which the latter deposit, long term, funds for the purpose of repaying the ECB bonds). The key legal point, I am told, is that the ECB opens debit accounts for member states, instead of credit accounts. Credit accounts are banned. But not debit accounts. As for the resistance amongst ECB board members to our idea, I know it is there and it often takes the form of a view that ECB bonds violate the ECB charter. But this is no more than a gut reaction by officials who do not want to take on that role.

    • Yanis, I see your Modest Proposal (and you!) receiving enormous publicity mostly in the English-speaking world. The German-speaking world is full of champions for Eurobonds but none of them has, to my knowledge, ever mentioned your “twist” to the Eurobonds. Certainly not the two German economists who always have answers for every question, albeit it different answers… (Bofinger, Sinn). Why do you think this is so? Are you not in touch with those people?

  • Best regards, Grand Master:
    Every day I follow economic developments and thus I am a regular at Rudi Wolff. You were his guest, and your lecture me impressed. You opened up for me a whole new dimension. For me it was a lot of questions and so few answers. I would not have been me if I did not dig a new question.
    Many in the establishment of Eurobond see total destruction of the national state and a review of what has been agreed Westfalia Peace Agreement. (Lindon La Rouch).
    Question: Would not it be better to go for the reestablishment of Glas-Steagal act as a first measure of healing. (I guess you are under the implied recapitalizing banks) Something that Roosevelt did in 1933, then the Pecora Commission, which would put criminals behind bars and then a large investment projects to people returned to work.
    It was not clear when you said that Germany will soon need to decide whether they want to be masters of the European Union or will it leave.

    • Dear Davor, The answer to your question is a resounding yes. Europe (as indeed the US) need a beefed up version of the Glass-Steagal Act, as part of a European New Deal. And, yes, if only Germany could decide to bind itself to the euro mast forever…

    • … it would go under with all the other countries. It more attractive to jump into cold unknown water than to drown with a lot of people who do not know how to swim.

  • Kyle Bass Destroys The Ponzi-Prone Debt Sustainability Arguments Of The Status Quo…And Why Germany Can’t Save The World

    • The guy actually says that Germany cannot PAY for the world. But this is not the question if you understand Yanis’s proposal. On the other hand, Germany CAN, in fact, save Europe (and the world) by letting 60% of European (including Germany’s) debt become homogenized by the ECB.

  • I have a proposal for Yanis Varoufakis, since you are the greek economist.

    How about you draw up a Masterplan for the Greek Economy, until 2040.
    How GDP develops, capital stock, foreign ownership of capital stock, population, working fraction, productivity, import, export, consumption, current account, debt, interest rates, etc. and how you arrive at the 60 % debt/GDP target

    • Economic plans that reach so far to the future are destined to fail no matter how intelligent is the mind behind them. Take as example the Eurozone plan. I guess the minds that designed them were considered the best of their times and look where we are now…

  • @ Klaus,

    the Maastricht treaty 1992 ( was very specific on “no bail out”

    “Article 104b
    1. The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.”

    And this was very broadly discussed in Germany. We would have never agreed on the Euro without that.

    If we now know that Länderfinanzausgleich was a bad idea, why should we now repeat a 100 times larger and more gross mistake ? This would bankrupt us.

    Greece has got a humongous amount of Solidarity from Europe, nearly 100 % of GDP, 20 Marshallplans

    • There is a religious sect that does not allow its followers to have medical operations performed on them; they let God decide. So if they are taken ill and need an operation to save their lives they have only two options: either they will forsake their faith and have the operation, or they will let God decide if they live or die. Are you confident that God will let the Eurozone live?

      Regarding the solidarity from Europe, I think you are just playing dumb. I’m sure you know already that most of that money goes to European banks so that they do not go bankrupt due to their exposure on Greek (and other countries’) debt. So it’s solidarity to the bankers, not to Greek people. The same applies for Ireland and Portugal of course.

  • Although (due to my background) I am not always able to follow your economic analysis, it is almost scary how much the facts tend to prove you right at the end.

    So after watching the recent interview you gave to the Canadian TV I have to ask again:

    Are you truly, 100% sure that clinging to your academic role is the best thing to do in order to serve in the present situation?

    At what degree would you say that your proposals are taken into account by those individuals up there that make the decisions?

    It is obvious by now to everyone that the present counter-crisis measures aren’t doing much to solve the problem. On the other hand, you DO have come up with an alternative plan that will at least, as you say, restore the Greek dignity.

    With all due respect, but what is the point of keeping this plan strictly between your readers and colleagues instead of doing EVERYTHING in your power to get the thing implemented?

    Sure the system would fight you back and fight you back dirty. But is this an excuse to not even give it a shot?

  • This is why the German effort to intimidate and embarrass Greece will fail.

    At first glance Greece appears to be a small country with a land mass of roughly 135,000 Km2.

    Yet when one includes our EEZ and our blue water state our size becomes 650,000 km2.

    Then in addition to the 11 Million Greeks living in Greece, we have another 11 Million living abroad (most of them leading citizens of their communities).

    So when one picks an issue with Greece, he/she needs to seriously calculate of what the winning strategy will be towards a combined force of will power that can hit you from everywhere.

    When Germany figures out how to square the circle, then at that point we can talk about a winning strategy designed in Berlin and appropriate for Athens.

    P.S. A small note for those who don’t understand or usually think of Geopolitics. None of the riches contained in the 650,000 km2 area will go to Germany, as such riches have been promised and will be exploited by others. And just in case you don’t already know, such riches can pay the Greek “debt” many times over. So now figure out the rest and why Merkel is foaming at the mouth.

    • Can you imagine, that we Germans don’t have any hidden agenda, don’t want to control anybody, anything beyond our border.
      We just don’t want to pay for other peoples lunch permanently.

      We would be very happy to sell you a nice shiny new BMW and Mercedes, or whatever you desire, and are very aware that you compare quality and price to a Japanese Lexus or a Korean or Chinese Competitor, and will certainly not give us any extra credit.

      These times of Geopolitics / Cold war are long over. Even Germany has ended the military draft, which was a joke since 10 years anyway. There is no German company interested in drilling rights. Please stop this permanent slander.

      Everybody competes in the global market place. If chinese pay a higher price for ouzo, please sell to them.

    • I understand fully. But do you understand that your trade surpluses cannot be maintained if you insist that others do not have trade deficits?

    • Germany can keep her trade surplus with Greece; no problem. But then the Germans have to spend this surplus in Greece as tourists. Germans refuse to publicly understand (privately they do, of course) that current account surpluses and capital exports go hand in hand; the more surpluses, the more capital exports (mathematics, not economics!). They don’t have to export the capital only as debt. They can export it to Greece as investment, as grants or, as I said, as tourists. But they can’t have the cake and eat it at the same time.

    • Yanis, that is perhaps the most pertinent answer given over the last few months. All of these problems boil down to the simple fact that it is all about how we fund trade; when one nation manufactures and the other nation buys the product.

    • At first glance Greece appears to be a small country with a land mass of roughly 135,000 Km2.

      Yet when one includes our EEZ and our blue water state our size becomes 650,000 km2.

      Dean, congrats. You beat the Greek government in declaring to the world, especially Turkey, Greece’s Exclusive Economic Zone (EEZ) under the International Law of the Seas.

      Unfortunately, Dean, your declaration does not count.

    • But do you understand that your trade surpluses cannot be maintained if you insist that others do not have trade deficits?

      The same logic applies to the currency wars.

  • @yanis, I make up a new reply, because it doesn’t allow me to do this directly.

    I do not know any German, who thought about that topic, to be happy about the trade surplus. There was in fact a big dispute in this Summer the “Target 2 debatte” where the Prof. Sinn from the ces/ifo institute complained a lot, that we give all of this directly to the ECB instead of using that at home, and there were angry replies from Buiter an the likes.

    It was this mercantilist thinking in the 18th century, that a “rich country” has to accumulate gold and silver. No. You can not eat gold and silver. “Rich” is a country which can produce stuff others or itself likes to consume.

    The more important number is actually the Current Account, see page 2 of
    Very difficult to understand, it was just made for my own thinking and then put up in a hurry for a similar discussion, about 2 month ago.

    Germany ran a (small) trade surplus since around 1953 and that was basically used up to pay reparations until the mid 70ties. After that they started to travel a lot and used up all that money in Italy, Spain, Greece, later Maledives, Seychelles. After coming home they tortured me with all these “exciting” pictures uncle X in the Colosseum, aunt Y before the Akropolis. So basically all what Germany accumulated (blue curve at the bottom) was some tiny 10% GDP or so, and even that is disputed for accounting precisions half a century ago.

    What happened in the mid 80ties was, that the US got fed up with Japan, not with Germany, running their big surplus (without the traveling at that time 🙂 and that the root cause: significant undervaluation of the Yen, had to stop (Plaza Accord 1985). After everybody thought, now it is fair, they announced so in the Louvre Accord 1987.
    The graph basically shows how the Yen and the “euro equivalent”, to a large degree the deutschmark, were over- and undervalued to the Dollar.

    On the right side I drew up some time ago my hopes how fast we can shrink the surplus, reduce the outflow to you and others, and draw done what we have accumulated, basically only after 2005, resulting in more vacations, more invest in our streets.

    Back in 2000, we thought we have an agreement in Europe to use the so-called Lisbon Agenda to turn the European Union into “the most competitive and dynamic knowledge-based economy in the world.”

    And Germany did its part (Agenda 2010). We could have been better. Portugal, Italy, Greece, Spain did nothing, but raise wages and now we look at the consequences.

    Remember: Germany becoming less competitive doesn’t help you. China, Korea, and India are eating your lunch. They work hard, they are clever (See Shanghai PISA results) (I ha a number of Chinese colleagues) and they save and invest a lot (40%). That is how you achieve 10 % growth, capital accumulation, Cobb Douglas Production Function.

    Remember those movies of Japanese and Korean folks making lots of photos ?
    Now it is Volkswagen CEO Winterkorn who inspects the new Hyundai in every detail

    If we can not compete on the world market, we become lunch.

  • Genauer:

    But that’s precisely the point.

    When it comes to your defense budget, you are major free-loaders on the US taxpayer.

    All of your factories were reduced to dust during the war and were rebuilt newer and better with American tax dollars and with loans which you had no decency (nor intention) of ever repaying.

    You are promoting a form a extreme consumerism so that you can continue to export to the world things that are hardly needed so that you can have trade surpluses.

    You are finance/economic minnows trying to teach the rest of Europe the depth of your ignorance.

    What gives?

    P.S. I have owned roughly 10 cars so far during my lifetime and they all have been Japanese. When it comes to refinement of engineering no one beats the Japanese and no we don’t need your cars here in Greece. Keep them in Germany and offer them to Europeans with a deep inferiority complex so that they can boast to their neighbors that they have “arrived”.

  • @genauer
    Who is paying for our lunch? Siemens bribes? HDW ? Deutche Bank (earning the difference in interests all the way)? Listen mate, by these “loans” you are refinancing your own firms and your own banks. In the very near future we will stop paying back the “loans” and you will may understand. No other choice, sorry. We can’t let our people starve just to keep bild and merkel happy. You played and lost – along with all of us.

  • funny thing,
    I actually did save this conversation at 22:51, with my last entry as “Your comment is awaiting moderation”, whereas the reply from Mr. Pleassaras is time stamped 19:26.

    I think most people believe your “we will stop paying back the “loans””. This might be one reason, why no private warm body will give you fresh loans. It also shows consistency wih the last 200 years of history.

    @Dean Plassaras
    Congratulations! With you I discover always new facettes of my dark side. My friends will certainly enjoy the “extreme consumerism”. Not a single sentence from you without an insult or “interesting” statements.

    We thought our neighbors might wonder why we keep a large standing army, when nobody believes anymore, that “the Russians might be coming”. They are already here, and hey, they have money, to buy all that stuff, I would never buy 🙂
    That abandoning the draft as the last big EU country is described as “free loading” is definitely new to me.

    Lets look at that Marshall plan. Maybe you compare your wild allegations to for example: It is pretty specific on loans, grants, and repayments for Germany, but a little fuzzy on Greece. Maybe you can present something specific on that?
    For Germany that amounted to a total of 5% of our GDP, or 1448 m$ / 60 million population = 24 $ per capita. For Greece 376 m$ / 7 million people = 54 $ per capita.

    Somehow those 21$ transformed our factories “all reduced to dust”, according to you, into fairy dust, which produced then from 1953 on export surplus, to repay our obligations according to the
    I ll give you the german link, because it is more detailed, (english: The western part was paid down until 1988. In 1990, after reunification, we took over the eastern obligations. The last tranche was paid October 3rd of 2010.

    We simple minded “economic minnows” are happy with a 3.5% (youth) unemployment rate in the South. We dont understand, why foreign people dont want to pay more than a 0.5 % p.a. rate to us (2.0% bunds 10 years versus 2.5% inflation, ironic !!), that we store their money safely for the next 10 years (the “failed” auction, yesterday). I’m shocked, shocked to find that gambling is going on!

    But most German debt is bought by Germans, a 2.0% rate is after taxes only 1.4%, giving them a 10% advantage to buy instead maccaroni and cheese, ouzo and store it in their dungeons. And in all their lowly selfishness, they actually seem to start doing this. For 5 years the advantage is only 7 %, but I dont know, 10 year old cheese?

    Remember those ancient times, like before 2007, when people actually expected to get paid some interest beyond tax and inflation for lending their useless money? What an attitude of entitlement!

    “German, U.S. and UK 10-year real yields — benchmark government bond yields minus consumer prices inflation rate — are in negative territory, with Japan boasting the highest real yield among the four of around 1 percent.”

    Look, I came here, to try to get some better mutual understanding.
    Maybe I find something out about my fatherland, I dont know so far.
    Maybe I can also provide some publicly available information about things like the Marshall plan, and get it scrutinized by you.

    I think we Germans have actually become pretty good at taking insults (always striving to be “good” : – )

    I also think, to color that with some personal impressions and humor, might help to not get eaten up with only numbers.

    Sooo, one last anecdote:
    about 15 years ago, in US heartland, 3 engineers, one from US IBM, JP Toshiba, DE Siemens, each proud nations and proud companies, compared their cars.
    The JP guy had a US SUV, he could never drive at home, The US guy had a DE BMW “beamer”, because it made him feel “arrived”, as you say, and the DE guy had a JP car, because, after careful study, it was a better economic/ resale value.
    And we all laughed, and had another beer.

    So far for nationalism.

    • Genauer:

      It would seem to me that it would serve you well if you start reading your own press once in a while:

      SPIEGEL ONLINE: The Germany of today is considered the embodiment of stability. How many times has Germany become insolvent in the past?

      Ritschl: That depends on how you do the math. During the past century alone, though, at least three times. After the first default during the 1930s, the US gave Germany a “haircut” in 1953, reducing its debt problem to practically nothing. Germany has been in a very good position ever since, even as other Europeans were forced to endure the burdens of World War II and the consequences of the German occupation. Germany even had a period of non-payment in 1990.

      SPIEGEL ONLINE: Really? A default?

      Ritschl: Yes, then-Chancellor Helmut Kohl refused at the time to implement changes to the London Agreement on German External Debts of 1953. Under the terms of the agreement, in the event of a reunification, the issue of German reparations payments from World War II would be newly regulated. The only demand made was that a small remaining sum be paid, but we’re talking about minimal sums here. With the exception of compensation paid out to forced laborers, Germany did not pay any reparations after 1990 — and neither did it pay off the loans and occupation costs it pressed out of the countries it had occupied during World War II. Not to the Greeks, either.

      Now, if you still don’t understand what a free loader is, please re-read the above excerpt until it begins to sink in. Do this as many times as necessary. The more you read it the clearer will become.,1518,769703,00.html

      P.S. Economic minnows = amateurs in the practice of modern economic and finance principles (and not the size of your economy as you mistook it).

    • Dean Plassaras:

      I don’t know what the Germans did. But to my mind the Greece are free loaders.
      Greece received between 1986 and 2006 46,5 bn euro from other European countries. Today we talk about more than 60 bn euro. There are not many countrys on this planet with such a privilege and compared with the Marshall Plan it’s formidable.

      In the last decade, Greece tripled the dept, public sector wages doubled, above average consumption, below average investments and all the manipulations.

      A Brüssels politician said: Taliban-politics. In my words: Greece made 10 years party – the card house collapsed – other european countries have to pay for this disaster.

      For me, this is the definition of a free loader.

      regards Marcus

  • @Dean Plassaras

    I read Mssr. Ritschl at that time, and laughed, it is so grotesque not even worth commenting, not only to me, but obviously also to others, just 3 comments at that time, and another 5 month later, what was that guy thinking ? Was it you ?
    A typical Spiegel online posting draws hundreds of comments, especially if it is controversial.

    I ll gave you specific numbers and references, and put them into perspective (like $ per capita, years, dates) Mssr Ritschl was just out with wild, vague allegations, just like you. I understand that you like him.

    The references, I gave you, directly contradict Mssr Ritschl with names, dates, numbers, links to original treaties. Maybe you read them. Wasn’t that what you meant with minnows ? An amateur, who cant get his job, economic history, straight, even directly in conflict with elementary facts on wiki.

    But keep on going. I always learn something from you.

    Here it is London School of Economics (LSE), 1. hired the Clown Hayek, you wouldn’t like him one bit, he is often cited for things like “austerity”, maybe you would, he is also famous for refusing to provide numbers, equations, any kind of real world evidence 2. a doctorate degree for Saif al-Islam al-Gaddafi for a few millions, plagiarism only a few dozen times, hey, even that is topped easily by our own clown Guttenberg, who did it some 400 times on less than 300 pages, 3. Ritschl, enough said already, and, now I remember 4. Satoshi Kanazawa, who mixed up a US liberal = leftie with a european liberal = economic “rightie” while just plagiarising the data from others. I really loved that one.

    And we start to see a pattern for the LSE: rich on controversy, poor on facts and elementary knowledge.

    • ah, o.k. You win then.

      BTW, Spiegel Online articles in English never draw more than a few comments(as compared to commentary in German) and any commentary is heavily censored. Apparently someone from Dr. Goebbels office needs to review them before they are published days later (as we say, a day late and a dollar short). And I guess that is your modern German democracy. A heavy censorship on all things disputing the official party line (directly delivered by some old Germanic pagan Gods).

      Might I suggest that during some spare time in your otherwise interesting weekends you go to Der Spiegel’s online service and look under the heading “Euro Crisis”. I want you to go back almost two years (cataloging is a great German virtue) and read with horror the details of the Merkozy plan “Destroy Europe” in vivid and disturbing detail.

      As far as you learning from me, please stick around; you ain’t seen nothing yet. Some of us are natural born teachers despite the fact we don’t officially teach in universities or other temples of knowledge.

      Mit der äußersten Höflichkeit deine liebe Griechischen freund und wahren Meister.

      P.S. Ich wurde am 22. April, die eine verbesserte Termin mit Ihrem anderen defekten Führer am 20. April geboren Vergleich geboren. Ich bin sicher, dass Ihre deutschen geschultes Auge kann die perfekte Balance von Nummer 22 zu schätzen wissen.

  • “genauer” vs. Dean Plassaras – a general comment

    I, for one, find the exchanges between these opposite ends of the scale very inspiring. Thank you! On one hand, the attempt to limit oneself to facts (albeit sometimes a bit far-fetched facts) and on the other hand the emphasis on prejudices (albeit mostly very intelligent prejudices). Personally, I can sympathize with both of their views but that is beside the point.

    I returned to Greece, this time, in early September and now I have noticed something interesting about my postings. Until then, my postings were about 9:1 (if not more) in critique of actions on the part of the EU-elites (mishandling the debt problem; the charade of calling something “help for Greece” when, in actual fact, it was a bail-out for banks; turning a Greek-problem into an EU-problem; etc. etc.).

    Since then, the content of my postings has shifted toward a critique of Greece. Critique of what? For having caused a mess? For having wasted other people’s money? For other similar reasons? Not at all! Instead, a critique of Greece for showing no initiative on her own to do something about her problems. For spending all their brainpower on other people’s problems like the European debt problem (this blog is a prime example of that).

    Savers in the Eurozone now face the realistic risk that at least some of their savings will go out the window. If my savings in Austria go out the window, I will not blame Greece for that. Instead, I will hold the incompetence of EU-elites accountable for that.

    What I find inexcusable on the part of Greece and Greeks is that no initiatives are being taken to take their future into their own hands. There are so many things which Greeks, and only Greeks, can do! To make a cute point: only the Greek government can stop the payment of pensions to dead people so that less money needs to be taken away from the living; only the Greek government can arrange that the budget deficit is not reduced by silly austerity measures like taking more money away from those who have always contributed anyway but, instead, by taking it from those who have never contributed a dime.

    Above all: where is the Greek brainpower (the academia, the media, the opinion leaders, etc.) suggesting economic plans and strategies how the Greek economy can recover? I haven’t seen a thing on that (not even in this blog).

    Earlier this year, through a course at the Aristoteles University of Thessaloniki, I got to know a lot of Greek students and the young generation in general. They were not interested in Eurobonds and the likes of it. Their theme was: “We know our country is in trouble; we would like to contribute for the betterment of our country but somebody needs to show us how we can contribute”. That’s the spirit! And the drama is that no one in the Greek intelligentsia seems to find time to answer the young generation that simple question (because everybody seems so busy solving other people’s problems).

    Let me try to put it as respectfully as possible: stop worrying about other people’s problems and start working on your own! Stop marketing your intelligence to the world and begin employing it for the benefit of your own country! Some time ago, an 11-year old sent a letter to Mr. Papandreou proposing his (very cute) plan how to solve Greece’s problems (published in the Ekathimerini). Don’t leave Greece’s future up to 11-year olds!

  • Marcus:

    Before you accuse Greece of any free-loading you need to prove that if Greece was to be replaced by country X with same exact profile, then such new country X would not be able to receive the same EU treasury distributions that Greece has received so far on a cumulative basis. I think it is way out of form to accuse Greece of receiving EU funds when any other country with similar specifications would be a like recipient. This is the EU charter and this is how it works.

    In Germany’s case however, the debt forgiveness it has received from the US taxpayer is country specific, massive and non replicable.

    You are mixing apples and oranges.

    The original charge stands: Germany IS the biggest free loading EU country by a mile. Even today it continues to free load on the American taxpayer who is paying for all of Germany’s military protection. The force that you call German military today is an auxiliary force capable only for US operational support. It’s not a fighting force and it’s not a nuclear and/or ballistic missile force either.

  • A really fantastic article – why didn’t I come across it before????? This is inspiration at it’s height.. especially when you seem to be in a bad place in your head – maybe that’s why I didn’t come across it before… I didn’t need it then!!!! Thanks a lot for this.

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