Greek Election Result: An assessment

Greek voters gave their contradictory verdict: While 55% voted for parties that stood explicitly against the ‘bailout’ terms and conditions, a pro-’bailout’ government is about to be formed – such is the nature of Greece’s electoral system (which rewards the largest party with a bonus of 50 additional MPs in the 300 seat chamber). The New Democracy party will lead the government even though it is utterly clear that at least one in three of the voters who backed it think very little of the party and its leader but felt they had no option but to vote for them simple because the alternative, a Syriza government, might bring upon the nation the combined wrath of Berlin, Frankfurt and Brussels. This is as inauspicious a beginning for a new government with a mountain range of challenges as one could have imagined.

So, what next? Setting aside the shenanigans of the next few days (that will be necessary before the degenerate socialist party, PASOK, finds the ‘narrative’ which will allow it to explain to itself its support to the New Democracy-led government), the main ‘feature’ to look forward to is the upcoming EU Council meeting, on 28th and 29th June where a Greek Bailout Mk3 will no doubt be shaped. For despite Germany’s protestations (that Greece must stick to the terms and conditions of Bailout Mk2), reality has overtaken and effectively annulled Bailout Mk2. To put it simply, all the underlying hypotheses (primarily regarding Greece’s recession and the related tax revenue projections) have been violated by the facts on the ground. Bailout Mk3 is an inevitability, since a Grexit would be tantamount to the instant dismantling of the Eurozone.

What is beyond doubt is that Europe will reward New Democracy with a relaxation of the terms of conditions of Bailout Mk2. This relaxation will be heralded both in Greece and internationally as a triumph. Alas, the half life of those celebrations will be even more short-lived than that which followed Bailout Mk2 and infinitesimal compared to the duration of the merriment that followed Bailout Mk1.

What will be the essence of Bailout Mk3? A Bailout Mk2–lite of course. Greece will be given an additional three to five years to bring its budget deficit under the magic 3% mark. The Samaras government which is bound by the Bailout Mk2 ‘rules’ to cut public spending within a month by a further  11.5 billion, will probably be allowed to ‘get away’ with a smaller cull (of, say,  5 billion). Greece will probably be leant another  50 billion and some new announcements about structural funding of investment projects will be added to the mix. In my estimation, such a ‘relaxation’ will be the worst possible outcome for Greece and a calamitous one for Europe too!

Let me explain why I stand convinced that a loosening of Greece’s bailout’s terms and conditions will be a terrible outcome for everyone: The Greek economy is well and truly broken. The circuits of credit are so badly damaged that even efficient, profitable firms have been cut out of the capital markets but also out of the international markets (as their suppliers will no longer accept the Greek bank guarantees without which Greek firms cannot import raw materials). These credit circuits will remain broken even under new terms and conditions, as I described them above. Neither the extension of repayments of the new loans to the insolvent state (which everyone knows will be defaulting again – this time to official creditors) nor the new loans will change this. Moreover, the new spending cuts, even if they are less than what was envisaged under Mk2, will give the forces of recession another boost. To cut a long story short, there is no doubt that such loosening up will simply prolong, without averting, the agonising death of the Greek social economy while, at the same time, depleting the dwindling stock of patience with the logic of bailouts in Germany, in the Netherlands, in Finland and in Austria. To put it differently, when in December, it becomes, yet again, clear that another, more relaxed, Greek bailout has failed, that realisation will add to the strains and tensions in Europe, accelerating further the centrifugal forces tearing the Eurozone apart.

So, if a loosening up of the Greek bailout won’t do, what will? What should the Greek government bargain for? I have already answered this here. The gist of my suggestion is that Greece does not need more money per se. That throwing more good money after the mountains of the bad money that has gone into the pit of Ponzi Austerity is pointless. What we need is a different logic. A new prescription, as opposed to different doses of the same poison. Greece, Spain, Ireland, Italy, the whole of Europe requires, so as to stop the euro-derailment, need three things: (a) direct recapitalisation of its ailing banks from the EFSF (with central bank regulation from the ECB-EBA), (b) a shift of the Maastricht compliant debt of the Periphery onto the books of the ECB (with a parallel issue of ECB-bonds), and (c) an investment-led recovery program to be financed jointly by the EIB and the ECB (as opposed through the shoddy Brussels-administered structural funds). These three steps (reflecting our Modest Proposal) will prove no more expensive than the current cascade of mindless bailouts. The difference is that they stand an excellent chance of reversing the crisis, as opposed to the bailouts that are boosting it no end.

But can a Greek government negotiate all this on behalf of the Periphery? Of course not. But it can make a brisk start by asking for the following: That instead of new loans, as part of Bailout Mk3, Europe takes off the Greek state’s books the money given to it to pass on to Greek banks and that it Europeanises the banks. This makes perfect sense and would appeal even to the ECB, the IMF, to Paris and Washington; to all economically literate people. Moreover, the moment Greece asks for this, Spain will add its voice to such a terribly reasonable suggestion. And then Italy. Possibly Dublin too. A new agenda will be on the make throughout Europe. Debt mutualisation will follow naturally. And so on.

Of course, starting the ball rolling in the right direction requires a government in Athens that is capable of looking our German partners in the eye and not blinking for a few minutes. Tragically, the New Democracy lot, and their PASOK minions, won the day on a promise to blink from the outset. Europe may have got its wish this weekend. Soon, however, it will be reminded, yet again, that the most vengeful god is the one who grants such wishes.


  • Albert Einstein said: Insanity is doing the same thing over and over again and expecting different results … Once again we Greeks proved the theory … Congratulations!!!!

    • We Greeks are always “manipulated” … and always blame others for everything. Ephialtes betrayed the Greeks not Xerxes!!! Our politicians betrayed Greece not Germany. And finaly why to I need a damned education & licence in order to drive a car and I dont need to be educated & licenced to decide for the future of a whole country????? Greek voters want to be manipulated becasuse they are not educated to listen to the truth ….

    • Christy

      “Greek voters want to be manipulated becasuse they are not educated to listen to the truth”

      A huge truth Christy. Yes indeed.
      And yes our own politicians betrayed us first and the foreigners just take advantage of that.

      Unfortunately ,social manipulation is ingrained in Greece.

    • Well, to paraphrase Irma Thomas “time is on our side”. Check the demographics of the voting: Syriza 34% up to 55yo, 55yo+ ND 39%…

    • “And yes our own politicians betrayed us first and the foreigners just take advantage of that.”

      You’re breaking my heart. It is always somebody else, not Greeks themselves, wo is responsible or reaps undue profits from the sovereign decisions of Greeks.

      BTW, today I learned that it is written in the Greek Constitution that shipping company owners don’t have to pay taxes on the proftis. So, in the past 10 years alone, around 175 billion euro in profits remained untaxed. Well done, my Greek friends!

      And of course, “the foreigners just take advantage of that” – except that advantage taking “foreigners” are Greeks, again.

      And the very same people who are proud for this mafia constitution scream bloody murder because the German constitution forbids to take over limitless guarantees , transdfers and loans for foreign nation’s livestyles.

      You guys are shrill.

    • vss

      Poor vss ,i didn’t mean to break your heart. Much.

      We never said our specific Greek problems are caused by others.
      They have nothing to do with the crisis though.

      And as i have said before ,i thank this crisis ,because it is an opportunity for certain Greeks to wake up and change things that must change.
      But in no way will we pay for your own crimes.

      It is you that blame it all on the Greeks.

      It is you all along that try to use our own bad truth to cover your own butt for this mess all Europe is in today.

      You guys are shrill.

  • Well, ο κύβος ερρίφθη.

    Enticement did not win over fear coercion.

    Enticement: Syriza promising salaries and pensions back to 2009, no job cuts, nationalizing what was previously privatized and no sell offs of public companies, hiring people where necessary and no firing, etc. Everything for everybody.

    Coercion: a vote for Syriza is a vote for getting out of the eurozone.

    It is amazing considering the number of pensioners and the numbers employed in the civil service that Syriza did not get 50% of the vote.

    The reason:

    In 2009 PASOK got a large percentage with a project: money exists for what we need.
    ND bottomed because Karamanlis promised: cuts in jobs and austerity!

    The public is learning that there is no free money, it has to be payed for; it also remembers collectively other periods of chaos and has no desire to relive one again.

    You treat it as if crying “Wolf” means that the wolf does not exist. Unfortunately the wolf (going to the drachma and chaos) exists and the majority have realized this.

    • Nonsense. You really are clueless. Today there is an interesting article on openDemocracy, explaining how there is no way that Greece can be refused liquidity in the ECB system, And that Syriza was a big threat to Germany, because the Germans have no power to resist any demands that might be made.

      As always, Greek voters are manipulated into voting for assholes. And that, Samaras most certainly is.

    • To what money are you refering to?

      “According to James Mackintosh of the Financial Times, JP Morgan produced some figures today that showed where the money provided to Greece in its much-publicised bailouts actually went. Here’s what James said on twitter:
      “JP Morgan estimates only €15bn of €410bn total “aid” to Greece went into economy – rest to creditors. No wonder they are cross”

    • I do not know who is clueless, because if people were voting for personalities ND would have gotten the same percentage in May 6. People shifted because of the eurozone scare.

      Τα πικρα γλυκα .

    • Xenos: “As always, Greek voters are manipulated into voting for assholes. And that, Samaras most certainly is.”

      Anna: “People shifted because of the eurozone scare.”

      So you’re not saying anything different from Xenos.But given that you are a ND-PASOK groupie you see it as a good thing.
      Let me remind you the Gauls were scared of the sky falling on their heads.Fear doesnt justify everything..

    • @Crossover

      “.But given that you are a ND-PASOK groupie you see it as a good thing.”

      and you are a Syriza groupie then? what childish nonsense.

      “Fear doesnt justify everything.”

      Fear is a survival mechanism that has served the human race. Those who did not fear lions did not propagate themselves, those who did not fear starvation did not propagate themselves either.

      Overcoming fear is also a survival trait, gauging how real the dangers are. Being foolhardy is not.

      The dangers of going to the drachma are very real: chaos, lack of foods and medicine etc. and people realized that, particularly people who have lived through such chaos.

    • “and you are a Syriza groupie then? what childish nonsense.”

      If everybody that votes for Syriza is a syriza groupie,then i guess i am.But if you ask whether i consider myself as such,then no.For,im not a syriza follower nor do i have any problem voting for somebody else next time as long as they fit my opinion.I dont follow politics at a soccer game level.Blue or Green,Left or right.I do lean to what is defined as left but that doesnt mean anything by itself.

      Similarly i dont cosider everybody who voted for PASOK or ND a groupie by definition.I never called Dean a groupie for example.He has convinced me regarding the logic behind the reasons he is in favor of Samaras.He happens to believe that Samaras is anti-memorandum.He wants him because he thinks he is going to do the opposite things from what you believe he’ll do.You on the other hand either cant get over bad habbits of the past (such as voting blindfoldeldy for ND and PASOK) or became (again (?)) a victim of their propaganda,that took a different form this time around though.Btw,can you tell me who did you vote for in 09?Its ok if you dont want to answer.

      “Fear is a survival mechanism that has served the human race. Those who did not fear lions did not propagate themselves, those who did not fear starvation did not propagate themselves either.

      Overcoming fear is also a survival trait, gauging how real the dangers are. Being foolhardy is not.”
      Ofcourse.But you cant say that one who is afraid of lions is the same with a claustrophobic.For the latter’s fear is non existant.

      “The dangers of going to the drachma are very real: chaos, lack of foods and medicine etc. and people realized that,”
      Ofcourse i agree that a return to drachma would be catastrophic.This doesnt mean that i have to accept as a given,that voting for the “wrong” party,by definition equals to a return to drachma.

      “particularly people who have lived through such chaos.”
      Do you remember why people lived through such chaos?It was because they opposed foreign intervention.Am i right?
      So if i understand correctly,if you had a chance to relive the 40s facing the dilemma between surrendering to Germans or fighting and suffering the much harsher consequences you would choose the former?If yes,you dont deserve to vote.Hell,you dont even deserve to breathe the same air with us.

      By the way,since you always want to talk as a “memer” of the group of “people who have lived such chaos”,may i ask who is responsible for Greece’s own share regarding the country’s problems ?I dont care whether Greece’s own share is big or small (i still dont think its a mostly Greek problem) but who is responsible for that particular share?Isnt it you and your children?
      And since it is, how do you dare using your WWII experiences as a way to strengthen your opinion?You are the people who made mistakes at a criminal level REPEATEDLY,why should your opinion matter to us?

    • @Crossover

      You are being very presumptuous and offensive and not worth discussing with.

      May be you are very young and can be excused on those grounds.

    • “You are being very presumptuous and offensive and not worth discussing with.

      May be you are very young and can be excused on those grounds.”

      The only 2 potentially offensive things i said are:

      1)You dont deserve to vote if you would be in favor of surrendering in the 40s in order to avoid the misery that came with resistance.
      2)You (the people that grew up during WWII) are responsible 100% for Greece’s share of the problem no matter the size of this share,thus speaking on behalf of these people not only it doesnt strenghthen your opinion,instead it further weakens it.

      Taking #1 as offensive, means that you would indeed be in favor of surrendering.Thus if this offends you im glad about it.Thats the point.Truth hurts.

      #2 is self explainatory.Large part of people like you have shown no signs of regretting all their bad deeds.No way your opinion can be respected.

      Btw its very weird when your main point is “we,the people that have gone through this misery know better,and do anything to avoid reliving it” and yet the SYMBOL of the resistance,Glezos, has sided with Syriza.Maybe he was in Bahamas while y’all had to go through starvation,poverty,etc….

      PS. I obviously consider Glezos’ economic ideas as ridiculous.Syriza should have protected him regarding the negative publicity after what he said.But thats a whole different thing.

      “May be you are very young and can be excused on those grounds.”
      But you’re not going to ever be excused for precisely the opposite reason.Being old and thus responsible for what I and my peers have to go through.

    • @crossover
      Your powers of deduction and free association make you a perfect SYRIZA voter: insolent and lacking a mathematically logical brain.
      Where in the text of annav’ s comment is it written that she perceives the enemy as a foreign one, for example. She obviously perceives the enemy to be within. She just said that if you can avoid taking your own eyes out with a fork, it’s better not to do so. Where in the world do you get off making such logical leap (from self – induced chaos to foreign induced one).
      That aside, one thing that I have painfully learned since I’ ve started commenting, is that you can never really know who you are talking to on the internet. How the hell do you know what kind of life annav has lived and if and how she has served the community or not.
      And most importantly, what kind of insolent little airhead are you to speak to a person old enough to be your grandmother in such a presumptuous way?
      It is obvious to any logical human being that your differences with annav lie mainly in the perception of the root of the problem. You should learn to respect that instead of personally insulting a person you don’t even know and her children for God’s sake! (no wonder this country’s going to the dogs)
      If you want to take one as you dished out, take this:
      From your behaviour it is perfectly logical to assume that you are an ill- brought up little whotsit and YOU and your mother are responsible for all the ills that have befallen our heads so you have no right to speak.
      Your soviet worshipping and Tsipras – like arrogance and cluelessness is what brought down the HONEST middle class and me with it. How’d you like that, eh?
      I bet it’s not so fun now is it?

      How far away do you think a National Divide is from this kind of attitude. I have news for you: You are not the sole possessor of Divine Knowledge, haloooo! Learn to respect different opinions and most of all, people you talk to, whatever their age.

      Some may not be as amenable as annav

    • @alienelin

      “You should learn to respect that instead of personally insulting a person you don’t even know and her children for God’s sake”

      If you have problems understanding what a generalisation is then please dont come back talking about me or my mother.I repeatedly said that i am talking about the people at her “age group” and not her personally.ND was first in voters 55+ old only.Is it hard to understand what “you and your children” means then?If her generation and her children’s generation isnt responsible for all this then who is?And who said my own parents and grandparents are not part of these generations?

      “Your soviet worshipping and Tsipras – like arrogance and cluelessness is what brought down the HONEST middle class and me with it. How’d you like that, eh?
      I bet it’s not so fun now is it?”
      No its very funny.Since it makes no sense.Tsipras is not responsible for 40 years of bad governance nor have i been around 40 years ago to even contritube to this bad governance.Maybe now you can understand my point ?

      “How the hell do you know what kind of life annav has lived and if and how she has served the community or not.” Obviously whatever type of service they have offered to their communities can not make up for what is happening now at a countrywide level.And btw why would 1 good thing offset a bad thing or vice versa?

      “You are not the sole possessor of Divine Knowledge, haloooo! Learn to respect different opinions and most of all, people you talk to, whatever their age.”
      You know what?FUCK Syriza.If it takes Divine Knowledge to realise all the harm PASOK and ND have done to this country then i rest my case and i apologise !

  • Hi Yanis,

    How do you figure the 55%? I get: siriza + independent greeks + golden dawn + communist +party + greens = 27 + 7.5 + 7.0 + 4.5 + 1.0 = 47 And then i get: ND +Pasok + Dem. Left + Laos + Creativity Again = 51.5… approx

    • Huge error to count Dem. Left as a pro bailout party. Also, you have left out the 6% of votes that went to parties that were not elected. Of those only Drasi (1.7%) was pro-bailout

    • Hi again, and thanks for the reply. I really like Democratic Left, they are my favorite party. I think they will be an immense asset to the coalition government that will hopefully form. I dont think they are anti the bailout concept though, IMHO.

    • Without having any dislike for DEMAR I predict that in a year they won’t have enough support to elect one deputy. The sacrificial lamb.

  • There has been no real austerity in Greece, only tax increases and tax increases were the decision of the Greek government, not Germany. Germany set the target, Greek politicians decided on the method. Please correct me if I am mistaken.

    Real austerity ie reducing government debt can only lead to growth in the long run, tax increases lead to recessions.

    • Yes there has been austerity.

      Austerity is not the reforms. You have to distinquish them.

      We had tax increases ,huge salary decreases ,pension decreases ,public servants fired (hurray) and generally big cuts exactly as the memorandum ordered. The way was also decided by the Troika. As for Germany ,it is not Germany by itself. Actually there is no Germany. Only some German slaves that betray their own people too. As our own do.

      By having the worst cuts ever in the history of mankind we had almost 500.000 private businesses closed.

      It is real austerity. And while these criminals say Greeks didn’t do anything ,Greeks have the worst austerity ever.

      The money given go back to the banks ,which roll over their debt to the sovereigns ,having Greece as a primary scapegoat.

      The debt can not be reduced since the spending does not go to Greece to advance businesses.

      So no money in Greece ,means less money in the markets ,which means the average person not being able to work ,pay his bills ,pay his loans ,the businesses close and sovereign debt increases for the sake of the banks.

      You can not reduce government debt by cutting growth. Cutting spending and reforming means getting your act together and using the money in a more productive way ,it doesn’t mean do not use money at all for you.

      Come on man. We have said all things before. More and more understand what is going on. The rest of the reforms can not be implemented with out money and these money can not be for the banks only. Also even if all the reforms were implemented ,since the money do not go to Greece we wouldn’t have growth anyway.

      The EU leaders either delay on purpose to save the banks first (or so they think) by having the southern countries bail them out using their own debt as an excuse or they are really stupid.

    • The plan was, from the start, brutal reduce of the standards of living, by tax increasings and salaries and pensions cut. Yes, maybe Greek government overdone it with tax increases (especially the indirect, for example heating diesel). But tax increases were in the program imposed by troika.
      And how exactly you reduce the government debt by pilling up even more debts on unsustainable loans with huge interest?
      Do not be so ignorant, get the facts before you speak. It is very easy to find and read the terms of the program.

    • I can only assume that you have a malfunctioning brain, I wish you the best for recovery.

    • The budget has been slashed tremendously.
      The point about real austerity (reducing gov’t debt) is a proving false. How do you do it? By cutting gov’t spending? That’s what Greece did. Net result: debt INCREASE.

  • Make no mistake, the eminent statesman Antonis Samaras as prime minister will be the saviour of Greece, providing Syriza in Opposition and its gladiators, the unions, do not destabilize the country politically.

    • Eminent? The worst foreign minister this country ever had? And a failed political upstart? Whose only reason for climbing to the ND leadership was that he was hated by the Mitsotakis clan which was, in turn, loathed by the Karamanlis powerbase? I appreciate, as you know, your sense of humour!

    • Eminent statesmen do not announce their arrival. They forge it and it’s only on their departure that the assessment can be made. Even then there are many pretenders, and only a few that truly deserve it.

      I also can’t help but notice the disclaimer in your post, which nullifies your initial statement. An “eminent” statesman is able to handle political destabilisers after all.

      Finally, given the depth of the European problem, I doubt that Mr Samaras (or any Greek PM for that matter) is in a position to influence an outcome. Those decisions are made elsewhere, not in Athens.

      It’s like saying a kaiki from the Aegean Sea can set it’s coordinates to cross the Atlantic.

    • I suggest that you look up the adjective “eminent”. Normally, we require people to have not one or two, but a record of real achievements to be accorded eminence.

      As far as I am aware, Samaras’s main “achievement” of the early 1990s was to completely destroy Greece’s relations with another country in a petty nationalistic argument over ownership of historical names. With this one act, he showed his eminence as a malakas of the first order.

  • In your valve blog post, correct the following “is to to go one step beyond;”

  • You’re asking for a mini Plan Marshall (which is logical in a sense). But when we are seeing the EUrocrats (together with the IMF and Goldman Sachs) using this crisis to break the legs and arms of the working class and nothing else… absolutely nothing else… do you really expect anything like that. I cannot.

    Also they may not even have the resources anymore once the Spanish phase of the crisis has been opened. In fact the disintegration of EU may be a tad too advanced for whatever happens in Greece to matter anymore… except to Greeks themselves.

    Greece has chosen and has chosen the wrong path pushed by fear. There is no solution except revolution right now: the old regime is collapsing… slowly and painfully rotting right in the middle of our life paths.

    It happens… ask history books.

    • “You’re asking for a mini Plan Marshall (which is logical in a sense)”

      One should not forget that Greece was a beneficiary of the original Marshall Plan already:

      Then, in the EU years until the crisis errupted in 2009, she got from the EU net contributors via agricultural and other projects the equivalent of ~15 more Marshall Plans. Then, since the start of the crisis, it received the equivalent of about 116 additional Marshall Plans (partially in loans, partially in transfers).

      This are quite more transfers and loans than a ‘mini Marshall Plan’, and apparently they were contraproductive.

    • No, it just means that come next February or March we’ll be having elections again…

    • Sure we were. And It was an explosive success. Since the money were spent on Napalm bombs during the civil war…

    • vss

      How about going first to find out what a true Marshall Plan is?

      You want so much to excuse your government you have no idea what you are talking about.
      Obviously everybody of your people understands the stupidity of their actions and certain people try to twist everything to cover their butts.

      Repeating what you hear in the media and posting links doesn’t change the truth.
      I can do this too.

      Go study child. Go on.

    • @Very Serious Sam: to what Dimitri says (great link!), i.e. that the Marshall Plan’s core was a plan to reduce the sovereign debt of West Germany so it did not fall to the Soviet camp. The share that Greece got (in exchange to not demanding war reparations to Germany, mind you) was also mostly an attempt, eventually successful (mostly thanks to Stalin’s betrayal) to stop the ELAS (the pro-Soviet guerrilla), whose modern political heirs are precisely SYRIZA and the KKE.

      But most importantly, it was a plan to reduce the sovereign debt of West Germany so it could stand on its own. Why? Because indebted countries can’t and become neocolonies, like Haiti – or fight back creating problems.

      Debt is not as important as such debt as it is a tool to keep whole nations under a neocolonial boot, with all the risks. In the case of Europe, the risks are many because it has rather highly developed working classes. But it’s clear that core-EU, lead by Merkel, has decided to make colonies out of periphery-EU, what it is not at all different of what Hitler had in mind.

      We are returning, with variations, to a very nasty period of European history. And you know what happened in Yugoslavia when they did that, right?

    • Dear Demetri
      “Marshall Plan” aid is often quoted and proposed as a blueprint for solving a crisis like the one we are in now. Not sure this is so true because the situation in postwar Europe was very different to the situation today in many ways. However, it may not hurt to read about the original “Marshall Plan” implemented in the late 40ies:

  • Hi Yanis,
    would you recommend SYRIZA to participate in a coalition government?

    • Sure, that would be a great way to lose the one last reserve we’ve got! We’ve squandered everything, why not that one?

  • Yanis,

    It would seem that your kindly permitting me to respond to the repeated questions, (and my answers), on your previous thread where you set out your new revisions to the Moderate proposal, resulted in my being gifted a free pass to a major banking conference in Europe last week that, in turn, gave me the chance to talk to the delegate from the EIB, who in turn has promised to look at both your Moderate Proposal as well as my own suggestions regarding the need for investment into free enterprise.

    Greece needs jobs that pay a living wage. All I can do is repeat that I will do all I can to help in any way made possible from such conversations.

  • “Bailout Mk3 is an inevitability, since a Grexit would be tantamount to the instant dismantling of the Eurozone.”

    Maybe, maybe quite the opposite. Since then the rest of the GIPSIFs would see the hardships Greek people would have to face after breaching the contracts and leaving the EMU – which would be a very convincing encouragement to get the own acts together, fast.

    So from the core nations Netherlands, Finland, Germany and Austria POV, a Grexit would have been favourable (it would certainly have been cheaper for them on top of that). Not so from the rest of the GIPSIFs POV.

    Anyway, now Greece should focus on what she can and must do to install a sustainable real economy business model. To demand more and more money from others is not sustainable. Ah, to try to impose by blackmailing the rules under which thes loans and transfers are accepted is a joke, a bad one.

    • vss

      “which would be a very convincing encouragement to get the own acts together, fast”

      Yes vss ,again you are not a blackmailer at all.

      Get your act together child.

    • Hey, does anyone else remember when the deficit countries were the PIGS? Except that didn’t last long before they became the PIIGS. Except France started to falter, so we were left with the awkward GIPSIFs. Except Great Britain is also under the austerity knife, forcing us to be rather inventive. PIGFIGS, perhaps?

      This procession alone should tell a very serious thinker that the European economic system is eating its own. Or do you honestly believe that these struggling nations are running their economies into the ground simply for want of a suffciently horrific counter-example? This is over-simplification at its most insidious.

      Of course, over-simplified scenarios lead to over-simplified solutions. “Install a sustainable real economy business model”? Aside from being a uselessly vague description, it’s like suggesting removing and replacing the roots of a tree and expecting the tree to get better (and being surprised when the tree falls over instead).

      “To demand more and more money from others is not sustainable.” I invite you to share your sentiments with the officals of the troika, who have demanded more and more cuts, which have resulted in more and more taxes being levied on the Greek people. Your apparent notion that the Greek governments of the last three years have demanded anything of Europe is a tragic misrepresentation.

      One last thing. Let’s accept your implicit proposition that the core Euro countries at the core because they are magically better at economics than anyone else, and your explicit one that a Grexit would be cheaper and more favourable. Why, then, were they so determined to scare people away from SYRIZA, which (to hear them tell it) would have meant an immediate return to the drachma? Why is there neither weeping in the streets of Berlin today, nor panic in the stock markets, that Greece is still under European control?

      Why? Because the notion that Greece and the other PIGFIGS are at the root of the Eurozone’s troubles is as flawed as your ad hominem attacks on those countries.

    • Well … not really answering your post, but since many people (and you, VSS, in particular) seem so keen on bandying acronyms around, how about we start calling you guys FANGs? You know, like vampire tooth, and stuff … I don’t know, it has a sort of nice ring to it, doesn’t it? Goes rather well along with GIPSIs and PIGS, don’t you think?

    • AF

      We do insult eachother but it is rather funny and enjoyable ,isn’t it? 🙂

    • @ Demetri

      Well, it is, if you take it as the joke it really (sadly) is, it is kind of funny.
      Unfortunately, this kind of “labeling” is just another type of propaganda. Pigs and Gypsies is intended to take a negative tone in the minds and ears of the people. It is intended to convey that all Greek, Portuguese, Spanish and Italian people are lazy, slothful, etc etc.
      That’s why I proposed the term FANG with all its vampiric connotations 🙂 Although, I’m pretty sure not all German and Austrian and Finish and Dutch are blood-sucking overlords feeding on the lifeblood of others.
      There are great people and terrible people everywhere, regardless of country or nation. Putting labels on whole nations, as if nationality is some kind of genetic trait, is wrong and misleading.

  • There is still a point from your modest proposal that confuses me and if you could clarify it I would be grateful.From what I understand the e-bonds that you propose will be underwritten by sovereigns and insured up to a certain percentage by the EFSF.How will an e-bond issued on behalf of an insolvent sovereign yield different interest rates from the current EFSF scheme or for that matter lower? Seniority of debt makes sense only when the debtor can repay that senior debt,do you think that will be the case for most eurozone members?
    Also in a previous article you spoke about balanced budget requirements like in the U.S. If I’m not mistaken more than 30 states are officially bankrupt so it seems such a requirement is easily abandoned.How does the MP deal with the enforcement of that proposal?

    • It will differ because when all three policies are implemented the sovereigns will no longer be insolvent.

    • Since you made this question cossack allow me to say this but dont take it personally.its just that when, proffesor V uses USA as an example to explain the problem in the eurozone,several people come back with the argument that US states ought to run a balanced budget.Thats true but they dont realise how that is possible.So what im going to say goes to all of them,not you personally.

      Here is some reality
      The expenditure approach to measure a region’s gdp is this:
      GDP = C + I + G +(X-M) C:Consumption I:Investment G:Government Spending X:Exports M:Imports

      Alternatively this can be defined as GDP = C + S + T C:Consumption S:Savings T:Taxes

      This is an identity,not a formula so in both cases the result must be the same.This means that C + I + G + X – M = C + S + T

      If rearranged you get (I-S) + (G-T) + (X-M)= 0
      This translates to private sector balance plus government sector balance plus foreing sector balance equals 0.

      Given the private sector’s desire to always NET save (S>I) then one of the two must happen: either G>T (government deficit) or (X>M) (trade surplus).

      So if prv sector “wants” to run a 5% surplus (net save) while the economy has a 3% trade deficit the gvt by definition runs a 8% budget deficit.

      One would argue, why start by assuming the amount of net savings and trade balance.One reason is that the government budget is the result of the private sector’s movements and desires which also more or less affects the trade balance too.Its the gvt that “responds” to the private sector and not the other way around.

      In fact all gvts run deficits most of the time so as to allow the private sector to net save,given an accompanying negative or (small) positive trade balance.

      Attempts to run government surpluses at the simultaneous abstantion of trade surpluses have led to recessions (page 6&7)
      As a matter of fact thats the reason for the current recession in Greece and elsewhere.The economy has a trade deficit and the government is not running a deficit large enough in order to allow the private sector to net save (and delever) as much as it desires(actually the primary deficit is very small,the rest goes to debt servicing,not in the economy)

      So why did i say all this?

      Well,it goes without saying that in every country or in every currency union,some parts have trade surpluses and some parts have trade deficits).But in every single region in the world the private sector desires to net save,no matter if its a surplus region or a deficit region.
      Similarly USA has trade deficit states.The important thing is that this deficit is being offset by fiscal transfers from the FEDERAL government to the deficit economy.This means that these fiscal transfers are either large enough to make up for the trade deficit and allow the private sector to net save OR they are large enough so as the state government need only run a small budget deficit in order to allow the private sector to net save.
      This is like the Federal Government saying to the state governments “I take care of your trade deficits,you make sure you run a balanced budget,for there is no excuse to have big deficits and thus i wont bail you out”.

      So what the modest proposal says is: let the “Federal European Government” take care of the trade deficits,and then force governments to run balanced budgets.After all the governments wont have a reason not to run a balanced budget if the trade deficit is taken care of by Europe.No gaps to be filled in this case.

    • Crossover

      You keep this text somewhere available.
      You will need it again.

    • It gives me no pleasure to suggest that Crossover is wrong on one very specific point, indeed a point seemingly missed by almost everyone; that the use of the word “savings” is inappropriate. Today, savings are almost always placed into a retail bank; who use them, immediately, to add to the pool of money they also, immediately, leverage and use to add to the monies available for debt. That savings made with a bank simply add to the debt pool; particularly, today, the government debt pool.

      What has happened is that everyone still uses the same terms as when savings represented an entirely different function. For a start, prior to the advent of the credit card and “Big Bang” in financial services; savings were often made as hard cash in a tin under the bed, (so to speak). Again, they were also often placed as money directly invested into long term stable companies that by return, paid a regular dividend sufficient to enable the “Saver” to live comfortably on their savings……

      Finally, those that had a surplus of what one might describe as old fashioned savings; a surplus beyond their need to receive dividends to pay for their lifestyle; used them to invest in a new local business. They were used to buy into the shares of small and medium companies.

      Thus under those now old fashioned rules; a large proportion of what are today described as savings were entirely outside of the function of the banking system, or for that matter, beyond the reach of use as government debt. They were in what I have described as “Hidden Prosperity”, funds used on the one hand to support the local economy with local job creation; and on the other to fund the long term aspirations for arms length equity capital investment into the larger, more mature company; that always used to underpin the need for that dividend income for the long term successful saver.

      What the new banking and financial services did was remove the entire function of the original savings culture and then, by design, replaced it with the need to fund government borrowing through rule changes that required a large proportion of all savings to be placed into “Bonds”. Thus through a series of rule changes, the entire function of savings has been changed to the long term detriment of the wider function of a normal economy.

      Crossover, you should replace your term savings with “Debt Potential” DP. And remove from all of your thinking the use of savings as a function within a deeply leveraged economy.

      Until we return to the original function, (that served so well for so long), of the use of the term savings; no nation will be able to return to a stable economy.

    • @Chris

      Although you raise an interesting issue about the definition of savings,i dont think this changes the point im trying to make.
      You say ” Today, savings are almost always placed into a retail bank; who use them, immediately, to add to the pool of money they also, immediately, leverage and use to add to the monies available for debt.”

      I suspect you have the “fractional reserve” scheme in mind.If im correct,then you got it wrong,the fractional reserve scheme and the money multiplyer is a myth.Banks dont make loans with deposits.But anyway,this money can either be considered as Savings or Investments,the fact is that they fall under one of these categories.There is no other way to contribute to the national income anyway!I think this argument has more to do with semantics than anything else.After all reality has proved that several recessions begun right after the private sector was not allowed to net save up to its desired level or even forced to run a deficit (see the links i provided on my original post).

      “What the new banking and financial services did was remove the entire function of the original savings culture and then, by design, replaced it with the need to fund government borrowing through rule changes that required a large proportion of all savings to be placed into “Bonds”. Thus through a series of rule changes, the entire function of savings has been changed to the long term detriment of the wider function of a normal economy.”
      Αpart from the fact that bonds can be considered as nothing different than savings accounts,bonds do nothing more than draining excess reserves from the system.
      This is a very technical topic but nevertheless you can see a detailed explanation here: (you will have to download to paper)

    • I caught this comment by Scott Fulwiler on a blog post a 3spoken:

      the notion that firms can spend and reduce net saving in order to increase net saving of the household sector–while theoretically true and true in an accounting sense–doesn’t hold up well empirically. Across business cycles (i.e., trend as opposed to cycles), firm net saving can and has fallen while household net saving increased (and a modest govt deficit).

      This is an important thing to realise. Just breaking it down for a sec, let me remind you of my post “Economics 101 on government budget deficits”. Money being a medium of exchange means that money is exchanged for goods and services of equivalent money value. There is no value leakage or anything like that. So when you sum up the net deficits and surpluses of any economy, no matter how you break those sectors down, that sum will always be zero.

      In practice, national accounts are broken down into a few sectors (government, private sector, external sector). So, that tells you government deficits are always exactly balanced by net imports and private savings. You can’t have net private savings without equivalent net government or capital account deficits. In plain English: if the private sector wants to net save – and that is its normal mode – you need to have net trade surpluses or government deficits or both to offset. Since the world’s aggregate external sectors also sum to zero, this tautology basically means that in aggregate net private savings is balanced exactly by government deficits. Put simply: the government’s deficit is the private sector’s surplus.

      What does that mean for a post-bubble world in deleveraging mode? It means that people feel what I have labelled “debt stress”, which increases the desire in the private sector to net save. Now the private sector is really three different groups in national accounts. The private sector consists of households, domestic non-financial business and financial institutions. And when you are thinking about private household net savings in a post-bubble world, unless companies are doing a serious capital investment binge or you get serious financial sector losses (net dissaving), the government must deficit spend or increased household savings can’t happen.

      The reality, as Scott puts it is that “the notion that firms can spend and reduce net saving in order to increase net saving of the household sector… doesn’t hold up well empirically.” Translation: if households are indebted, there is little chance that they can reduce that indebtedness because of a surge in business capital spending (net dissaving) alone because that leads to systemic fragility and the Ponzi stage of Minsky’s dictum and encourages debt accumulation by households. Likely, reduced household debt (ratios) will happen because of government deficits, default, debt forgiveness or inflation.

  • Europe needs a new prescription. That ist true. But I doubt the suggested three measures are sufficient to overcome the crisis. Greece, Portugal and other EU-Members aren´t competitive on global markets, because mostly these are dominated by just a few very large companies/banks. Greeces economy just can´t compete with e.g. Intel, Siemens, GEC, Volkswagen, Barclays or JP Morgan. And therfore Greeces economy has no chance to catch up (at least not under free trade conditions) and find its way back to some kind of prosperity as long as these global market strutures remain unchanged. A stimulus program wouldn´t change a thing, I´m afraid.

    • This is a strange world view. Suppose all EU countries made cars, refrigerators, … all the same things, including banks. Would there be any sense in trade over the borders? The markets would be as big as each country and each would have their own produce. As in medieval times.

      Why unite into a bigger entity?

      The healthy idea would be that while Germany would be selling cars etc, Greece would be selling tourism, transport, retirement homes, education ( much better climate for students 🙂 ) etc. There would be mutual benefit for a better standard of living for all. Take California, or Florida as an example.

      The problem arose because we united in a bigger entity with half measures in currency and laws. And the system cannot take it.

      The whole eurozone needs a rethink and the time is now, as Spain shows. This new ( hopefully) greek government will buy us time until the dumdums of much larger countries figure out how to stop the whole of the EU getting a stroke, following something like the modest proposal, presumably. We can then start talking of saying no to further bailouts and doing radical cuts of debt.

    • This is the problem. It was a problem, everybody knew about it. Therefore to put those countries together and let the Germans transfer their way of doing business to Greeks is equivalent to let a six year old kid fight a sumo wrestler. This is not a fight. This is the original crime. To impose a hunger on the innocents is another crime.

    • Why do the Greeks need to make computer chips? Starting to produce their own food would be a better start. That could achieved quickly after the GEURO is introduced, because import would be very expensive.

    • They certainly cannot compete in global markets if they have the wrong exchange rate. This is why Greece was not ready to join the eurozone, since without very aggressive measures to improve competitiveness the situation would actually deteriorate over time when there was no possibility to devalue the currency. This is indeed what happened, with deteriorating balance of trade, increased public and private debt, increased purchase of consumption goods, decline of domestically produced goods. etc. – leading to increased unemployment plus inflation in the national territories concerned. All of this is well known in economics from Mundell onwards.

      The responsibility for this mess lies with national governments and central banks, and in Greece’s case with Papademos and Simitis and also some economic advisors. I note that none of them accepts any responsibility at all for their incompetence and/or corruption, and some if not all of the economists concerned have received promotions and professorships in Greek universities even within the last few years.

    • In one sense, it is correct to say that a stimulus program wouldn’t change a thing as this is not a “Greek” problem; it is an entire Western economic problem that will not go away simply because one solution is impossible. On the other hand, all one needs to do is look back to times of greater stability to see that almost every nation once had sufficient employment to enable a normal economy to provide local prosperity. What has gone wrong is, as Anna V and Demetri both point out, the existing economy is not working.

      As I see it, the banking system does not recognise that if you base all economic activity upon the idea that it can always be funded by credit; then, over time, the repayment of the credit totally drains away the underlying prosperity of every local community outside of the banking industry. That the only mechanism that is not operating is the use of equity capital as investment simply, because equity investment cannot be drained back into banking; it remains in circulation to add to the prosperity.

      So we have no option but to try and change direction. Yes, direct stimulus will not work as all that will do is add to the credit that must be repaid under their rules; but that does not mean we give up and go home. If we believe another way will work; then we are left with no option but to keep plugging away at the message.

  • The truth is that Greece is divided. It doesn’t matter if 45% or 55% is pro- or anti-bailout or the opposite, because the mk2 hits hard on families and lifes of those who do not have enough money spared in bank accounts. You see, if we get a three or five year extension of the program many families will suffer longer and poverty is the worst advisor for every society. Greeks voted in order to keep their savings ( however the we’re obtained ) because they were terrified. This was the main target of the pre-election campaign. But the bitter truth is that after three years of resession only those who have big money will eventually survive ( considering the elongation of the program). The outcome is the brain drain of the country and the rise of the left- and right wing extremists. I thought that someone would give a quick end or a perspective to the Greeks, but instead the situation will continue as before the double elections. I think that it is the worst case scenario.
    I am very angry, because I have to go abroad to work and live with my family, although I always paid taxes and obligations and i still am. My mistake was that I did not manage to have a 2 or 3 hundred euro bank account, so that I can play safe, worried and patriotic like the thousands that voted pro-bailout. And believe me there are many other Greeks like me.

    • Δημήτρη, you said :
      “I think that it is the worst case scenario.”

      No, this is the scenario of the best from two possible worsts. The eurozone could not afford to let Syriza blackmail it . It is called “losing face” and it is what drives politics and politicians.

      If Syriza had won, we would be back to the drachma ASAP, with possibly stamped euros to turn them to drachmas. That is what would have happened to your ” 2 or 3 hundred euro” bank account, as also the 700 euro pension accounts would turn into rapidly inflating drachmas.

      you also think that it is the people with money who voted ND: “so that I can play safe, worried and patriotic like the thousands that voted pro-bailout.” Look at the map of Greece with colors. It is the civil servants and the fat cats in the government companies in the big cities who were pro Syriza. The small people who have lived through chaos and mayhem turned conservative fast, though they had voted PASOK in 1989. Nothing like the prospect of no food on the table to sober people up.

  • Ok so we had elections no 2, so what? Q: What is the difference between the 18th of June and the 7th of May? A: The number of fired, unpaid, sick and dead Greeks. The wasted state money. Well done, people!
    So many CASUALTIES OF WAR so that the new PASOK – pardon, I mean SYRIZA- plus the two party system could be fortified. To translate a Greek saying: “we paid somewhat more but we really enjoyed it.”

    Ecstatic nurse to IKA Kallitheas doctor (as he was putting stitches on my aunt’s head): Look, Doctor! I found gauze!

    The last part is for those of us who actually have to live here with no ample means of support except for the kindness of relatives, no ‘connections’ and (perhaps fortunately as we have no fear of losing it!) no money in the bank. Those of us who were brought up as law – abiding, TAX PAYING, middle class citizens: it is we who actually have to bear the brunt not just of the economic consequences, but more irritatingly, of all the political theory and game.

    • That is the tragedy of all this. You have a minority of the public sector employees (those who behaved honorably and free of corruption) and the private sector employees who paid taxes bearing the brunt of the war on the middle class. None of the parties, not even SYRIZA, have addressed the plundering of the public coffers and the abuse of the system by the tax evaders and super rich. Because in every party, no matter where one lives on this planet, there are those who benefit from others’ suffering.

  • “As you know” from my ‘dear’ posts about you, my “sense of humour” is exclusively spend for your vacuous vanity.

    • the problem with you is your luck of sense. And, that’s not humour.

    • The past tense and past participle of the verb “to spend” are “spent”.

    • I don’t think anyone can, because Greek data are crap (they are obsessed with so-called data protection). I have also been asking about this.

      My guess is that it is the elderly who voted pro-bailout. Certainly, the geographical location of votes for ND (northern Greece and rural areas) suggests that, and Attika has been Syriza more than ND.

      From individual polling stations, contacts there have told me that the turnout of young people was very low indeed, as in the previous election. But this is anecdotal evidence: there are no data.

      By hte way, i also heard today via officials that in the last few elections there has been serious tampering with the results, tending to favour ND. They claim that there is a secret agreement between Pasok and ND that nobody will ever challenge the tampering in the courts. There is no info about this election in that regard.

    • Vote breakdown by age:
      18-34 SYRIZA 33% ND 20%
      35-54 SYRIZA 34%, ND 24%
      55+ ND 39%, SYRIZA 20%

    • I don’t have the time to post the numbers but, roughly, ages over 55 gave the victory to the pro-bailout parties. The most dynamic part of the population (30-55 yo, with new families, mortgages, etc.) voted primarily for SYRIZA.

    • @top_korner and @white_noise

      Conclusion: Half dead zombies decided about our future.Half of them wont even be around when shit really hits the fan..

  • So its seems we all got tricked of some short or some of us live in another dimension or country

    Elections results shown that :

    there no 1.5 million unemployed

    No 4 million live near poverty in Greece

    In this country , never in history we experienced any economic scandals or if it were few they were be punished

    Last we Greeks seems to be just fine and we love Germans.

    so mr varoufakis it seems you ve been lied to us or along ;p (sarcasm off )

    See you in hell i guess

  • But it was only a fantasy
    The wall was too high as you can see
    No matter how he tried he could not break free
    And the worms ate into his brain.
    Hey you! out there on the road
    Always doing what you’re told, can you help me
    Hey you! out there beyond the wall
    Breaking bottles in the hall, can you help me
    Hey you! don’t tell me there’s no hope at all …

    • Yianni, is there any hope for the people? Counties existed thousands years ago and will continue to exist. What about the people? Can we react somehow? There must be something civilized & effective that we could do ….

  • What do you think are the odds of Samaras acting intelligently for once and telling the Europeans that a change in course may be the best thing to avoid a Syriza government in a few months?

    (Although now that I think about it that would also mean he is admitting how weak he is at home. An obvious fact right now, but maybe not one he wishes to own up to)

  • great piece. But you do leave out a key element in all this which is that if Greece defaults in December or in early 2013 rather than say, next week, it will come after the American Presidential elections. We’ll see what happens with Spain and Italy but as the international press campaign of the last week (against Syriza) demonstrates, the Americans will move heaven and earth to keep the Eurozone intact until after November.

    Unfortunately, all these stolen moments are likely to do is convince the international finance and governmental elite—”the last of the neo-liberals”— that they’re going to be able to muddle through. In this interregnum the only hope of the non elites is to begin organizing both intra nationally and internationally. But first we need a program, no longer just “a modest proposal” but a Big Immodest Proposal. A German Social Market for Europe might be a good start, but just a start. Like the man said (b.franklin though it might as well as have been k. marx) we must hang together, or we will hang separately.

  • I always enjoy reading your posts.

    I was wondering what was the point of a new election when the same parties which will now form a coalition could have done so last time. I am guessing that PASOK did not want Samaras as PM last time but that now New Democracy has more of the upper hand and PASOK cannot say no to him as PM. That is just a guess.

  • Another Road for Europe – The Appeal

    Europe is in crisis because it has been hijacked by neoliberalism and finance. In the last twenty years – with a persistent democratic deficit – the meaning of the European Union has increasingly been reduced to a narrow view of the single market and the single currency, leading to liberalisations and speculative bubbles, loss of rights and the explosion of inequalities.

    This is not the Europe that was imagined decades ago as a space of economic and political integration free from war. This is not the Europe that was built through economic and social progress, the extension of democracy and welfare rights.

    This European project is now in danger.

    Facing the financial crisis, European authorities and governments have acted
    irresponsibly; they saved private banks but refused to contain the difficulties of indebted countries using the tools of the Monetary Union; they imposed on all countries austerity policies and cuts in public budgets that will now be enshrined in European Treaties. The results are that the financial crisis has extended to more countries, the euro is in danger, a new great depression and the risk of disintegration of Europe are looming.

    Europe can survive only if another road is taken. Another Europe is possible. Europe has to mean social justice, environmental responsibility, democracy and peace. This is what the larger part of Europe’s culture and society yearns for. This is the way indicated by justice movements, mobilisations for dignity and against austerity policies. But it is the sort of Europe that has been ignored by dominant political forces in Europe.

    This other Europe is not a new superstate nor is it another intergovernmental bureaucracy. A form of democratic governance for Europe is needed if we are to address the global challenges that nation-states are not able to manage.

    Along the road to another Europe, visions of change, protest and alternatives have to be woven into a common framework. We propose six objectives.

    1. A smaller finance.
    Finance – at the root of the crisis – should be prevented from destroying the economy. The Monetary Union should be reorganised and provide a collective guarantee for the public debt of eurozone countries; the European Central Bank should become the Union’s lender of last resort. The burden of debt cannot be allowed to destroy countries in financial difficulty. All financial transactions have to be taxed, imbalances resulting from capital movements need be reduced, stricter regulations should ban the more speculative and risky financial activities, the division between commercial and investment banks has to be restored, a European public rating agency should be created.

    2. More integrated economic policies.
    Europe needs to move past old and new Stability Pacts, beyond policies limited to the single market and the single currency. Europe’s actions need to address imbalances in the real economy and the direction of development. Deep changes in taxation systems are needed, with a tax harmonization in Europe and a shift in taxation from labour to wealth and non-renewable resources, with new revenues to fund European spending.

    Public expenditure – at national and European levels – should be used to stimulate demand, defend welfare policies, extend public services. Industrial and innovation policies have to orient production and consumption towards high-skill, high-quality, sustainable activities. Eurobonds should be introduced not just to refinance public debt, but to fund the ecological conversion of Europe’s economy.

    3. More jobs and labour rights, less inequality.
    Labour rights and welfare are at the core of the meaning of Europe. After decades of policies that have created precarious jobs, poverty and unemployment, bringing inequality back to the levels of the 1930s, the priority for Europe is the creation of stable, high wage jobs – especially for women and youth – supporting low incomes and protecting trade union rights, collective bargaining and democracy at the workplace.

    4. Protecting the environment.
    Sustainability, the green economy, energy and resource efficiency are the new meaning of Europe’s growth. All policies need to take into account environmental effects, reduce climate change and the use of non-renewable resources, favouring clean, renewable energies, energy efficiency, local production, sobriety in consumption.

    5. Practising democracy.
    The forms of representative democracy through parties and governments – and the social dialogue among organisations representing capital and labour – are less and less able to provide answers to current problems. At European level the common decision-making process is increasingly replaced by the rule of the strongest. The crisis takes legitimacy away from EU institutions; the Commission increasingly acts as a bureaucratic support of the strongest member states, the Central Bank is unaccountable and the European Parliament does not fully use its powers and anyway is still excluded from crucial decisions on economic governance.

    In past decades, Europe’s citizens have taken centre stage in social mobilisations and in practices of participatory and deliberative democracy – from European Social Forums to the protests of indignados. These experiences need an institutional response. There is the need to overcome the mismatch between social change and political and institutional arrangements that are a remnant of the past.

    European societies need not be inward-looking. The social and political inclusion of migrants is a key test for Europe’s democracy. Closer ties can be built with the movements for democracy on the Southern shores of the Mediterranean after the downfall of authoritarian regimes.

    6. Making peace and upholding human rights.
    The integration of Europe has made it possible to overcome century-old conflicts, but Europe remains the site of nuclear weapons and aggressive military postures, and European countries still spend one fifth of world military expenditure: 316 billion dollars in 2010. With current budgetary problems, drastic cuts and transformation in military budgets are urgent. Europe’s peace does not result from projecting military force, but from a policy of human and common security that can contribute to peace and the protection of human rights. Europe has to open up to the new democracies of the Arab world in the same way as it opened up to Central and Eastern Europe after 1989.

    We propose to bring this agenda for another Europe to the European Parliament and to Europe’s institutions. This new meaning of Europe is already visible in cross-border citizens’ mobilisations, civil society networks, trade union struggles; it has now to shape Europe’s politics and policy-making.

    Thirty years ago, at the start of the “New Cold War” between East and West, the Appeal for European Nuclear Disarmament launched the idea of a Europe free from military blocs and argued that “we must commence to act as if a united, neutral, pacific Europe already existed”. Now, in the midst of the crisis of finance, markets and bureaucracies, we we must commence to practice an egalitarian, peaceful, green and democratic Europe.

    Rossana Rossanda, founder of Il Manifesto
    Elmar Altvater, Attac Germany
    Samir Amin, World Forum for Alternatives
    Philippe Askenazy, CNRS-Paris school of Economics
    Zygmunt Bauman, University of Leeds, UK
    Seyla Benhabib, Yale University
    Donatella Della Porta, European University Institute
    Trevor Evans, Euromemorandum and Berlin School of Economics & Law
    Luigi Ferrajoli, University of Roma Tre
    Nancy Fraser, New School for Social Research, New York
    Monica Frassoni, European Green Party
    Susan George, honorary president of Attac France, Board President of the Transnational Institute
    Paul Ginsborg, University of Florence
    Rafael Grasa Hernandez, ICIP, Barcelona
    Mary Kaldor, London School of Economics, UK
    Thomas Lacoste, filmmaker and publisher, Paris
    Dany Lang, Economistes atterrés
    Maurizio Landini, secretary of the metalworkers’ union Fiom-Cgil
    Jean-Louis Laville, European coordinator, Karl Polanyi Institute of Political Economy
    Giulio Marcon, Coordinator of the Sbilanciamoci coalition
    Jens Martens, Director, Global Policy Forum Europe
    Doreen Massey, Open University and Soundings
    Chantal Mouffe, University of Westminster, London
    Heikki Patomäki, chair, ATTAC Finland and University of Helsinki
    Pascal Petit, Université de Paris 13
    Mario Pianta, University of Urbino and Sbilanciamoci
    Kari Polanyi Levitt, McGill University, Montreal, Canada
    Wolfgang Sachs, Wuppertal Institut, Germany
    Saskia Sassen, Columbia University
    Andrew Simms, fellow, New Economics Foundation, London
    Steffen Stierle, scientific council Attac Germany
    Massimo Torelli, [email protected]
    Peter Wahl, WEED,World Economy & Development Association, Germany
    Vittorio Agnoletto, Freedom Legality And Rights in Europe
    Sergio Andreis, Lunaria, Italy
    Andrea Baranes, Roma
    Marco Bersani, Attac Italia
    Matthias Birkwald, Member of the German Parliament, Die Linke
    Lothar Bisky, Member of the European Parliament, European United Left /Nordic Green Left, Germany
    Raffaella Bolini, Arci, Italy
    Luciana Castellina, former member of the European Parliament
    Rolf Czezeskleba-Dupont, Roskilde University, Denmark
    Pier Virgilio Dastoli, European Federalist Movement
    Rosen Dimov, European Alternatives, Bulgaria
    Mario Dogliani, University of Turin
    Tommaso Fattori, Transform Italia
    Renzo Fior, president Emmaus Italia
    Maurizio Franzini, Sapienza Università di Roma
    Marco Furfaro, Youth policy coordinator, SEL
    Francesco Garibaldo, Associazione lavoro e libertà
    Francuccio Gesualdi, Center for a new development
    Alfonso Gianni, Roma
    Chiara Giunti, [email protected]
    Thomas Händel, Member of the European Parliament, European United Left /Nordic Green Left, Germany
    Keith Hart, University of Pretoria and Goldsmiths, University of London
    Peter Hermann, scientific council Attac Germany, University of Cork
    Peter Kammerer, University of Urbino
    Jan Korte, Member of the German Parliament, Die Linke
    Patrick Le Hyaric, Editor of L’Humanité, Member of the European Parliament, European United Left /Nordic Green Left, France
    Flavio Lotti, Tavola della Pace, Perugia
    Alberto Lucarelli, Commissioner of the City of Naples for the Common goods
    Lorenzo Marsili, European Alternatives
    Graziella Mascia, Associazione Altramente, Italy
    Vilma Mazza, Global project
    Luisa Morgantini, former vice-president of the European Parliament
    Roberto Musacchio, Roma
    Loretta Mussi, Un ponte per, Roma
    Jason Nardi, coordinator, Social Watch Italian coalition
    Maria Teresa Petrangolini, Active Citizenship Network
    Maria Pia Pizzolante, TILT speakperson
    Gabriele Polo, former editor, Il Manifesto
    Norma Rangeri, editor, Il Manifesto
    Angelo Reati, former official of the European Commission, Brussels
    Claudio Riccio, Coordinator of student organisations
    Gianni Rinaldini, Coordinator of the United for an alternative coalition, Italy
    Tania Rispoli, social researcher and activist, Italy
    Domenico Rizzuti, [email protected], Italy
    Denis Jaromil Roio,, Free software foundry
    Raül Romeva i Rueda, Member of the European Parliament, Green/EFA Group
    Raffaele K. Salinari, Terre des Hommes international
    Mariana Santos, Lisbon University Institute
    Thomas Sauer, scientific council Attac Germany, Fachhochschule Jena.
    Patrizia Sentinelli, former deputy minister of Foreign Affairs, Italy
    Paul Schäfer, Member of the German Bundestag, Die Linke
    Ingo Schmidt, Athabasca University, Canada
    Annamaria Simonazzi, University of Rome “La Sapienza”
    Claus Thomasberger, HTW Berlin, University of Applied Sciences
    Antonio Tricarico, Roma
    Guido Viale, environmental expert and activist, Italy
    Luigi Vinci, Progetto Lavoro, Italy
    Isidor Wallimann, scientific council Attac Germany, Fachhochschule Basel
    Frieder Otto Wolf, former Member of the European Paliament, Freie Universität Berlin
    Gaby Zimmer, Member of the European Parliament, European United Left /Nordic Green Left, Germany

    May 2012

    A preliminary version of this appeal was launched by the organisers and speakers of the Florence Forum “The way out. Europe and Italy, economic crisis and democracy”, held on 9 December 2011. The text is the result of extensive discussions with European networks and individuals and groups in many European countries. The text is available in English, Italian, French, German and Spanish. You can sign the Appeal on the website

    On June 28, 2012, a Forum on “Another Road for Europe” will be held at the European Parliament in Brussels.

    For information, support for the Appeal, and participation to the Brussels Forum:
    [email protected]

    The Appeal “Another Road for Europe” invites civil society organisations, social movements, networks, Trade Unions and political forces to a one-day discussion at the European Parliament in Brussels on the ways out of the European crisis.

    June 28, 2012, h.9.00 -18.30, European Parliament, Brussels

    Place de Luxembourg,

    Building Altiero Spinelli, 3rd floor, section G, room n.3 (ASP 3G3).

    Participant organisations

    Active Citizenship Network, Altramente, Arci, Attac France, Attac Germany, Attac Finland, Corporate Europe Observatory, Economistes Atterrés, Euromemorandum, European Alternatives, European Anti-Poverty Network, European Federalist Movement, Fiom-Cgil, Green European Foundation, il Manifesto, Joint Social Conference, New Economics Foundation,, Red Pepper, [email protected], Rosa Luxembourg Stiftung, Sbilanciamoci!, Social Watch Italian coalition, Soundings, Transform! Europe, Transnational Institute

    Presentation of the event

    Many appeals, texts, proposals are being launched about the future of Europe and about the way out of the crisis.

    The aim of this event is to contribute to open up a debate at the European level between activists, experts, political forces and policy makers on the viable actions that European and national institutions, political forces and social organisations can take to move beyond neoliberal policies, and towards a sustainable and democratic Europe, free from discriminations and inequalities.

    This initiative is part of a range of activities that are being organised at the European level on alternatives to the crisis.

    We propose to organise the meeting around three issues (Macroeconomic policies and finance, Green New Deal and employment, Democracy) and to have a first, informal exchange of views on the most relevant policy proposals, in order to be able to understand which are those around which we could build a common approach and, if possible, future common or coordinated actions.

    Each session will be introduced by speakers from civil society organisations and experts’ networks who will summarise the proposals that have emerged on each topic, opening up a discussion with activists, representatives of different political forces and Members of the European Parliament. The aim is to contribute to the emergence of shared proposals for alternative policies at the European and national levels. Participants will include a wide range of civil society organisations, networks, Trade Unions, experts and intellectuals, as well as the progressive political forces in the European Parliament.

    For contacts and information:

    [email protected]

    • Hi Fotis,
      just a short one. You might be (well, sadly enough much I found is in german) interested in professor Nico Paech, if you don’t know his works already. He is centering his scientific work just around many themes you mention.
      A (sadly enough german) lecture on “Postwachstumsökonomie” (who thinks about Mark Twain laughing about german word-monsters here^^) – something like “post-economical-growth-economies” is online at youtube. He asks himself what will a possible future be “post” our old society. Usually he meets strong criticism, but as many things sound similar to what you write here, I thought I’d tell you :-).
      He, it seems, wants to connect with the political rebellions 25-30 years ago that somehow were laughed away by cultural postmodernists and other groups that followed after them.
      An “egalitarian, peaceful, green and democratic Europe” and world would be right up his alley…
      I am interested in this also, just often asking myself how it would practically work in the real life we see around us (for example taxes for richer Europeans were cut since the 90s, in Germany and Greece too; there is no real progress in climate questions, the self-called climate “scepticists” like Lomborg, Singer, Maxeiner/Miersch, Vahrenholt and others are still around and fight their old fights in the www – and so on.)

      I’d love, on a sidenote, to know what Yanis Varoufakis thinks about the unconditional basic income for all^^. In times where low-wages are getting more and more common (Germany has a whopping 23% now, it got up the roof really. Nearly as much as the USA with their traditional loan-dumping of around 25% constantly seem to have).
      Nico Paech is against this guaranteed basic income for all. Gaby Zimmer who is in your list (left party) is against it also, but there are people from all political sides who favour it as a new way out of the fact that our societies have more and more poor people and some 5-20% owning the vast majority. So even Milton Friedman, an important man for Mrs. Thatcher, was for a kind of guaranteed basic income (special version, others favour a consumer tax, like german very rich man and entrepreneur Götz Werner does.)

      And thanks much for your post.

  • Hi Yanis,

    I am following Greek politics as close as it is possible without speaking Greek and I am spending a lot of time in Greece. I am not sure I can do what you did – and leave, I am stuck no matter what.

    I wonder what your opinion is about “the rest” in the MOU II. You make it very clear what you think about borrowing money to repay money, but the document contains quite a lot of other reforms. Some more detailed like the health care system or deregulation of taxi market, others more vague, like strategy on ports in the transportation system. Should the whole MOU II go to the garbage bin or only parts of it?


    • The taxi deregulation is a great success, of course. Now we have dozens of them waiting around doing nothing, the prices are higher, and even more of them refuse to give receipts.

      First class success story, Troika. Keep up the neoliberal deregulation: next is the water supply, so we can be deprived of water as the UK was last winter. And pay four times the price too.

  • Excuse me Mr Varoufakis, how do you count 55%?
    DEM LEFT is talking about “gradual disengage”, or “gradual free up”. That does not mean they are rejecting all parts of the loan agreement and you can’t find many official statements from them denying everything!
    Your theoritical analysis is exceptional in some parts.
    However you shaping an ideological-political divide (barrier better) among those pro and against bailout ( the bad and the good ) implying that SYRIZA and anti bailout parties have a common antilipsis or can cooperate or have a single common idea for instant implementation.
    You say 55% against but even if true do they have the least adequetely concord or a consesus for mutual understaning ?
    You see the negative side only.
    At last you tend to interpret economic system as always to remain stagnand, without any possibility to start gradually rebooting. Only public sector to start an authority to conduct B2B services, public can recalculate its needs and reduce its costs at least 20%!
    Almost 6.5b € might be possible to improve the liquidity for a large number of companies if decided to be given.
    We need a few practical ideas to improve systematically the environment for doing bussiness this not something out of reality and without any cost.

  • Guest-JM

    Eminent statesmen in democracies have no absolute power and all of them have their Achilles’ heel and are vulnerable to the whims of the electorate or to the violence of powerful sectional interests. The most eminent among them, Churchill and Thatcher, despite their brilliant performance, were ousted from power respectively.


    My appellation of “eminent” to Samaras is based on two premises, one symbolic and the other predictive, and not on past “real achievements,” although there have been some achievements since he became the leader of New Democracy. The first one attempts to counteract symbolically the ‘male-accusation’ that Samaras was somehow directly associated with the past wrong policies of New Democracy and nullify this malevolent accusation by highlighting his eminent performance since he became leader, i.e., assessing correctly and solely the disastrous consequences of the first Memorandum and not voting for it, and in his flexibility, celerity, and decisiveness to change course in different circumstances in regard to the second Memorandum, and thus thwart Greece from falling over the cliff. The second is based on my judgment, after studying carefully the CONTENT of his arguments and proposals intoned in their ubiquitous strength that reveal the character of the man, and hence my prediction that he is the “eminent statesman” who will take Greece out of the crisis.

    I do have the proclivity like a sfoungaras to plunge into the deep sea of prediction without fearing the ‘fouska’, once I reasonably come to the conclusion that there are ‘sfoungaria’ to pick.

    • So, you are happy to redefine English words (and mislead readers)? I note that you fail to comment on my account of Samaras’ sole political achievement, and instead focus on his words.

      I hesitate to say this, but…

      Only a fool listens to the words and flourishes of a politician: a wise man judges him by his record.

  • What an incredibly erudite and tolerant site this is!
    Haven’t enjoyed and been informed so much by a comment thread in ages. But then, this is life and death for you Greeks – as opposed to a Hedge call for the likes of Goldman Sachs.
    Sometimes, it pays to study the verdict of the (allegedly) neutral folks. This is what S&P said about the elections (and Greece’s credit rating) last night:
    Keep up the good work, Yanis. This question is bigger than Greece: this is a showdown between creative civilisation and fascist power…be that of Right or Left.

    • I think this election was fixed, Greece flourished under Metaxa, his economic policies would fix Greece even today, with or without the Euro, all that these pathetic elections did was save Euro a fortune at the expense of Greece again, if Greece was productive and all that jazz that the Samaras is claiming will fix Greece then it wouldnt matter if Greece used the Drachma or the Euro, actually it wouldnt need the Euro, im afraid Greece has been sold out again like 1453,1921,1945 I feel bad for Greece, we should adopt Israeli foreign policy in Greece it would save a lot on Nato caused illegal immigration, I hope the Greek people revolt in the streets because the Bankers propaganda sucked them in again, god help Greece, by the way maybe Greece should send a bill to the european museums for the stolen antiquities, that would enough to pay off Greeces debt and give the Euro a nice tip!

11 Trackbacks