• I am of a different opinion.

    We are not in the final stages of Euro disintegration.

    We are in the final stages of Merkozy disintegration.

    It’s that simple.

    • Dean, does that mean you’re optimistic? That maybe somehow Merkozy will be outflanked/overridden by something helpful emerging from other centers of power?

    • This analysis looks ok:


      Recall the German government responses to the 1992 Exchange Rate Mechanism crisis. This was also a CDU-led government, in coalition with the FDP, and they were lethargic and insufficiently cosmopolitan in outlook. In this case, the US, their usual protectors, are pushing them strongly to stop the hemorrhaging, but the CDU refuses. The withdrawal of capital in their bond markets will be followed by a tsunami of chained defaults.

      W. Munchau is justifiably freaked out, in English and German. N. Roubini is flying all over the world and dropping the doublespeak. P. Krugman has basically given up. Y. Varoufakis repeats varieties of “advanced stage of decay”, in Greek and English. The list goes on and on. Yet the new stability (“fiscal”) pact, which, if it were ever implemented, would no doubt be violated immediately by Germany and France just as the old one, is simply a recipe for more austerity.

      Guess what? If workers can’t buy, owners can’t profit. That has been thoroughly understood for capitalist economies for well over a century. Liberal solutions to this problem are many decades old. And yet we’ve all been dragged back into the 19th century by the current global “leadership”.

      At the very least, let’s hope this impending catastrophe moves the discussion beyond the varieties of “blame the victim” discourse focused on the deficit countries. It’s tiresome, even if some politicians capitulate through self-flagellation.

    • Merkel and Sarkozy are bit players in a global crisis. They may have delusions of their own importance (especially Sarkozy) but the quality of their acting (=decision-making) relegates them to very minor roles in history. We are going to be the victims of structurally embedded power, closely associated with neoliberal ideology and the financial sector.

      Of course, the euro cannot survive this crisis without very clever management. We will not get it from this crowd of sycophantic hams.

    • @YK: “Until about 5 minutes before the sterling´s ejection from the ERM in September 1992, it was politically highly incorrect to question the ERM´s merits.” (Bernard Conolly, former head of the European Commission responsible for analysis of the monetary system. He was fired for writing a critical book about monetary union: “The rotten heart of Europe”)

      So if history is any indicator the EURO will dissolve: In an economic system where the balance of supply and demand is changing no exchange rate can be the correct exchange rate for today AND in the furute. – So it is not possible to have capitalism and the EURO. Either socialism AND EURO or capitalism and free exchange rates.

  • I boycott Press TV because it’s the propaganda channel of the Islamic Republic of Iran, 100% state-owned, -funded and -controlled.

    • What about the BBC?
      What about the Deutsche Welle (pretty much a Nazi broadcasting outfit)?
      What about Radio Liberty / Radio Free Europe, funded by the Evil Empire’s taxpaying subjects and run by the CIA. Nothing there – just propaganda of the lowest kind, Russophobia and hate.

    • So your brain washed by the main media they are the biggest BS channels going.

      As Hillary Clinton stated Hillary Clinton declares international information war one thing the Americans are very good at creating wars.

    • As if the main stream media is not a propaganda outlet.

      I have news for you — many media outlets are leveraged up to their eyeballs to the banks. You think they’re going to upset their sugar daddy?

      Besides, Yani is not promoting the media outlet’s views by being on the show … just his own.

  • Unfortunately though I would wish that upon the European Union itself, not just the euro, I mean wish they both collapse in the most painful manner imaginable, I am afraid that the euro is nowhere near its demise though. The ECB will increase liquidity “whenever needed” and that in turn means that it will choose the inflationary path to ensure that the party (at least for some people) goes on until the bitter end. All said I am afraid, and it pains me to say that, but there could be at least 10 years ahead before the repulsive beast dies and the hideous structure, in which this monstrous reincarnation of the Holy Roman Empire dwells, begins to unravel.

  • I find Yanis’ points containing no propaganda at all. These points are the chilling reality and one wonders of the degree of blindness or unwillingness or inability of the bureaucratic EU monster to recognize much less to deal with the situation. I believe that the effects can take unchartered courses in a new form of social unrest, where known socio-political status quo will be violently shaken.

  • well now, Iranian slash Nazi outfits. Let us stay sober, shall we: if only half of what Yanis predicts is to be true further along the line we will be in deep trouble, all of us, that is. Although comforting to feel a giant doing the thinking here, somehow I feel start felling like a dwarf now.

    I hope EU will steer us out of this troubled water, for all this trouble is but foreplay to an immens catastrophe, the mother of all anticlimax, the godfather of offers some idiots couldn’t figure out, if only some of the worlds central bankers. that being said, the Global Minotaur led to all of this, coming to thing of it: how to interpret predatory states the size of the US as a cancer for the world, draining it from all four corners only to leave them pennyless.

    WWIII, what else? I didn’t like the comparison with the WWI treaty one bit, being a revesed version of it with Greece in the footsteps of Germany and Germany it the footsteps of the winners of WOI

    gonna need selpping pills pretty soon, this mess has to end…

  • That was chilling.
    The section on Britain is spot on. I would add, in the British media, the government were given the easiest ride plausibly possible, which leads me to believe most of the British ruling classes are probably solidly behind the austerity. (terrible tortuous metaphor in 3..2..1..) They are like a fox stuck on a raft made of chickens in a fast flowing river, the fox is only interested in eating as many chickens as possible thus condemning itself to a watery grave, and it can’t help it, because its a fox.

    Also what does everybody think of the French and German social democratic parties calling for eurobonds, the French socialist party candidate (who I had previously thought was tony blair in a better suit) was calling for all this….
    1. Expand to the greatest extend possible the European bailout fund (EFSF)
    2. Issue Eurobonds and spread national liabilities across all Eurozone countries
    3. Get the ECB to play an “active role,” i.e. buy Eurozone sovereign debt.
    4. Institute a financial transaction tax
    5. Launch growth initiatives instead of austerity measures.
    The SPD in Germany are calling for similar things, ECB as lender of last resort, Eurobonds and a Marshall plan for southern Europe.
    Given the contemptible track-record of European social democratic parties of late, there isn’t much hope, but more than none?

    • The German SPD would be really successful with this position in the next elections ;-).

    • @bob and @ Mr. Varoufakis
      Yes, that was chilling.
      Bob, I found your metaphor brilliant! It also describes the situation in Eurozone. And a question had immediately emerged:
      Who had the idea to put the fox stuck on a raft made of chickens in a fast flowing river, in the first place?

      All these months Mr Varoufakis you have extremely well explained “How”. I am not sure that I understood “Who”. Many would agree that all this happened because of the narrow-minded leaders, the greedy bankers, the bad capitalists or even the naughty members of the Eurozone. Calling names at the stake holders, even accurate ones, is usually part of the problem. Who would really profit, with any possible way, out of this global disaster? What is really in stake here? Whoever made or let this happen should have a stake here, or not?
      I am not so eager to believe that all we see is all there is. I truly hope there is a missing part on this puzzle. A kind of non-visible, let us call them “silent”, stake holders that have designed this trap for incompetents to fall in. And they did, because this is in their nature, they can’t help it, like the fox.
      It would be unbearable if pure blindness and stupidity is the cause of this horrifying outcome Mr Varoyuakis has just described. Let us hope the Barbarians exist. (Kavafis’ poem : “The Barbarians” see at http://www.parlandosparlando.com/view.php/id_323/lingua_1/whoisit_1)
      An answer would be very much appreciated
      Thank you in advance.

  • Ok, lets say, for arguments sake, that the euro is going under the bus and the global economy is entering a massive shitstorm. Shouldn’t we already start discuss contingency plans?? I cannot accept that we – and by we I mean the citizens – can’t do anything at all. Personally, unless i see a huge comet 2 mins away from smashing on Earth, i’m not willing to give up. Then again it might just be me…

  • Yani, you brought up the term “surplus countries,” in particular, Germany. Have not the Germans the last couple of years been violating the EU Stability Pact by running fiscal deficits above 3/% of GDP and will conitinue to do so for many years to come? Even proposed tax increases have been shelved! Something to do with not upsetting the German labour market or stifling German growth 😉

    It’s glaringly hypocritical behaviour on the German’s part that they are allowed to take anti cyclical measures — government stimulus — while at the same time they are trying to impose devasting austerity on the EU’s southern periphery. How does that English idiomatic expression go? What’s good for the goose is good for the gander, yes? 😉

    You also mentioned that the US has spoiled Germany. Indeed. I was looking at World Bank figures on “military spending by countries as a % of GDP.” On a percentage-to-GDP basis, Greece ranks with the US at around 4%. Germany, on the the other hand, which has the complete military backing of the US, spends roughly 1.4%. On a percentage-to-GDP basis, Germany ranks right down there with … Ethiopia! When Turkish fighter jets violate Greek airspace — ergo, EU airspace! — it’s Greek fighter jets that are scrambled to intercept the Turkish jets, not German, not Dutch, not French — Greek.

    Btw, I am not trying to give the Greeks a free pass here. As a poster (“xenos”) here recently alluded, major structural changes need to take place in Greece. No doubt. But it is as you and Munchau, and other astute individuals like you, have so eloquently stated — it is a global economic crisis: a collective mess, so to speak

    • Oops. By “surplus countries” I thought you meant “budget surplus” and not “trade surplus.” My apologies.

      Btw, here is a great article by Marshall Auerbach in counterpunch.com today on the Euro crisis: The Costs of the ECB’s Poker Game: There Will Be Blood. It’s basically what you have been saying all along: The Germans never had it so good. Why are the dummies so keen on screwing things up!

      This paragraph from the article pretty much nails Germany’s hypocrisy to the Euro crisis:

      In fact, it is doubly ironic that Germany chastises its neighbors for their “profligacy” but relies on their “living beyond their means” to produce a trade surplus that allows its government to run smaller budget deficits. Germany is, in fact, structurally reliant on dis-saving abroad to grow at all. Current account deficits in other parts of the euro zone are required for German growth. It is the height of hypocrisy for Germans to berate the southern states for over-spending when that spending is the only thing that has allowed Germany’s economy to grow. It is also mindless for Germans to be advocating harsh austerity for the south states and hacking into their spending potential and not to think that it won’t reverberate back onto Germany.

  • I disagree – Germany as a mercantile state will suffer far more then defecit France when we Break up.
    It exports boutique engineering that is not needed in a depression and this pays for its massive imports of energy given its catostrophic Asian landmass centric energy strategy
    The Winters are cold in Berlin.
    Me prefer cheap wine , bread, electricity rather then Industrial fluff.
    If they restart 2CV production people may even have a elemnet of personel mobility.

    BMW production is a mirror of the financilaistion industry – I can see basic Asian Industry moving

    back to the UK using cheap electricity imported from across the Channel when this is all over.

    • Is this the same rating agency (S&P) that not too long ago was slapping AAA ratings on toxic assets that European banks are now sitting on?

      I don’t know who has a greater sense of humour, the rating agencies or Dean.

  • Dear Yanis, finishing a 3-month stay in Greece today, let me say that I found your publications very stimulating. The trend towards Eurobonds seems unstoppable and one might as well opt for the best proposal which, I believe, is your Modest Proposal.

    What I regret is that you do not at all address the macro-economic issue of current account imbalances. Those imbalances are much more the cause for inter-country debt than budget deficits (and they are much more difficult to repair).

    Personally, I see no way how these North/South imbalances can be cured without some (perhaps only temporary) departures from the EU-freedoms of cost-free movement of goods, services and capital. At the same time, I see no particular prodigal sin in making such departures, at least for a while until everybody gets his economies on the ground again.

    The North will have to pay for the South one way or another, anyway. If Northern tax payers pay for that by physically transferring money, they see that and they protest. If Northern tax payers pay for that indirectly by having smaller current account surpluses and, accordingly, less wealth generation in their countries, they don’t see that payment so clearly. But one thing is mathematically certain: the North won’t be able to continue to enjoy surpluses with the South if the North is not prepared to transfer money to the South for covering their deficits.

    This is where I would like to see much more discussion, above all in Greece where there are so many opportunities to reduce her current account deficit simply by utilizing more of the country’s potential.

    • Klaus:

      Let me give you an indirect and direct answer (hoping that you can finally begin to understand).

      First the indirect. Last time an Austrian called Fallmereyer offered a theory about the Greeks as mongrels (a theory which was quickly discredited by modern DNA) it was a disaster. You can read about it here for entertainment purposes:


      And now the direct answer (since you are a Pisces and therefore a humanist):

      When you are at war (such as the one undeclared by Germany against Greece, nevertheless on-going) you do not engage into aiding and abetting with the enemy.

    • Last time an Austrian called Fallmereyer offered a theory about the Greeks as mongrels (a theory which was quickly discredited by modern DNA)…

      Fallmerayer? Mongrels? DNA?


      This is an economics blog lest you haven’t noticed.

      PS: Klaus, for the fun of it, why don’t you ask Dean to furnish his DNA results so we can all see how much “Greek” he is. 😉

    • Two replies to Dean (himself replying to Klaus). First, I fail to see what Fallmeyer’s theory has to do with the current situation. Besides, who told you that DNA science has verified Greeks as a “pure” race? This is just nonsense.

      Secondly, there is no war declared by Germans against Greeks. I presume from some of your older comments that you reside in the USA; perhaps this explains your failure to understand the situation. My own view is that the Germans have from the very outset refused to accept the concept of systemic failure within the euro system. They looked for a scapegoat, and found one in the mismanagement of Greek state finances; they also imposed a Protestant-style morality on the discussions and with this cultural nonsense explained the German “economic success” (such as it is) with the ideas of hard work, careful management and virtue. More dispassionate analysis would suggest that the current German situation arose through membership of the euro, an undervalued exchange rate (for Germany) and structural linkages within the EU system that encouraged Greece, Spain and others to import German goods and services. Much of the Greek infrastructure, for example, is German. The fact that southern countries were operating with an over-valued currency, encouraged by underpriced loan rates for both state and private actors, in order to buy German goods appears not to bother their Teutonic brains. The existing current account imbalances are obvious evidence of this reality: so Germany just avoids mentioning them!

      However, this is nothing to do with nationalistic debates. It is about second rate politicians (including the Greek ones) at a time of global economic crisis; and also how cultural differences can mislead second rate minds. Nothing more.

    • Besides, who told you that DNA science has verified Greeks as a “pure” race? This is just nonsense.

      And DNA science will never verify the “purity” of the Greeks — or any other nation, for that matter — because this concept of a “pure” race is utter nonsense.

      From Richard Dawkins:

      “We, to our eyes at least, look all different. But the genetics is all clear that we are an astonishingly uniform species. We are all one species — one very uniform species, and we originate very recently in Africa. We are all Africans.”

      PS: Btw, the history and development of the Greek language strongly suggests that it was formed in Greece some time after the 20th century BC — the Greek language did not exist before — by the mixture of an indigenous population with invaders who spoke another language. (John Chadwick)

    • There are more and more reports that Germany and Austria are printing national currencies again.A question to the EU Commission on the issue was left unanswered.

  • Thank you for that article Pedro. Your comments echo those of S. Amin about the need for Europe to be to the left, if it is going to exist at all. Recent events appear to support that viewpoint.

    I recommend reading that article from Der Spiegel to understand Germany’s exit plan, including its response to capital flight, taxes, breaking agreements, etc. The plan appears to involve secret preparations executed overnight with bank shutdowns and the element of surprise. The deficit countries need to have similar discussions, although it would not be unusual if their obsequious leaderships are caught unaware.

    To add to this joyous mix, there is also this analysis of a US government report on at least $16 trillion in secret bank loans since 2008. The US bailed out European banks with many billions.


    The US prepares to do so again, and some strongly advise it to avoid catastrophe, but it is not completely clear if it is possible.


    If the crisis fully returns to its origins in the US, then the Euro crisis may simply be the primer to detonate the value of the massive obscure mountain of US derivatives.

  • Xenos & LastGreek:

    I don’t remember asking your opinion.

    Why do you keep replying to me when it is so abundantly evident that there is nothing to say to the both of you?

    • Do you consider that your posts here are the word of God? I do not need your permission to opine on your public remarks.

    • There you go again … being rude.

      I am replying to the content of your postings.