Greece's Proposals to End the Crisis: My intervention at today's Eurogroup

The only antidote to propaganda and malicious ‘leaks’ is transparency. After so much disinformation on my presentation at the Eurogroup of the Greek government’s position, the only response is to post the precise words uttered within. Read them and judge for yourselves whether the Greek government’s proposals constitute a basis for agreement.


Five months ago, in my very first Eurogroup intervention, I put it to you that the new Greek government faced a dual task:

We had to earn a precious currency without depleting an important capital good.

The precious currency we had to earn was a sense of trust, here, amongst our European partners and within the institutions. To mint that precious currency would necessitate a meaningful reform package and a credible fiscal consolidation plan.

As for the important capital we could not afford to deplete, that was the trust of the Greek people who would have to swing behind any agreed reform program that will end the Greek crisis. The prerequisite for that capital not to be depleted was, and remains, one: tangible hope that the agreement we bring back with us to Athens:

  • is the last to be hammered out under conditions of crisis;
  • comprises a reform package which ends the 6-year-long uninterrupted recession;
  • does not hit the poor savagely like the previous reforms did;
  • renders our debt sustainable thus creating genuine prospects of Greece’s return to the money markets, ending our undignified reliance on our partners to repay the loans we have received from them.

Five months have gone by, the end of the road is nigh, but this finely balancing act has failed to materialise. Yes, at the Brussels Group we have come close. How close? On the fiscal side the positions are truly close, especially for 2015. For 2016 the remaining gap amounts to 0.5% of GDP. We have proposed parametric measures of 2% versus the 2.5% that the institutions insist upon. This 0.5% gap we propose to bridge over by administrative measures. It would be, I submit to you, a major error to allow such a minuscule difference to cause massive damage to the Eurozone’s integrity. Convergence had also been achieved on a wide range of issues.

Nevertheless, I will not deny that our proposals have not instilled in you the trust that you need. And, at the same time, the institutions’ proposals that Mr Juncker conveyed to PM Tsipras cannot engender the hope that our citizens need. Thus, we have come close to an impasse.

At this, the 11th hour, stage of the negotiations, before uncontrollable events take over, we have a moral duty, let alone a political and an economic one, to overcome this impasse. This is no time for recriminations and accusations. European citizens will hold collectively responsible all those of us who failed to strike a viable solution.

Even if some, misguided by rumours that a Greek exit may not be so terrible or that it may even benefit the rest of the Eurozone, are resigned to such an event, it is an event that will unleash destructive powers no one can tame. Citizens from all over Europe will target not the institutions but their elected finance ministers, their Prime Ministers and Presidents. After all, they elected us to promote Europe’s shared prosperity and to avoid pitfalls that may harm Europe.

Our political mandate is to find an honourable, workable compromise. Is it so difficult to do so? We do not think so. A few days ago Olivier Blanchard, the IMF’s Chief Economist published a piece entitled ‘Greece: A Credible Deal Will Require Difficult Decisions by All Sides.’ He is right, the three operative words being ‘by all sides’. Dr Blanchard added that: “At the core of the negotiations is a simple question. How much of an adjustment has to be made by Greece, how much has to be made by its official creditors?”

That Greece needs to adjust there is no doubt. The question, however, is not how much adjustment Greece needs to make. It is, rather, what kind of adjustment. If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax rate increases, it is clear we have done more of that than any other country in peacetime.

  • The public sector’s structural, or cyclically adjusted, fiscal deficit turned into a surplus on the back of a ‘world record beating’ 20% adjustment
  • Wages fell by 37%
  • Pensions were reduced by up to 48%
  • State employment diminished by 30%
  • Consumer spending was curtailed by 33%
  • Even the nation’s chronic current account deficit dropped by 16%.

No one can say that Greece has not adjusted to its new, post-2008, circumstances. But what we can say is that gigantic adjustment, whether necessary or not, has produced more problems than it solved:

  • Aggregate real GDP fell by 27% while nominal GDP continued to fall quarter-in-quarter-out for 18 quarters non-stop to this day
  • Unemployment skyrocketed to 27%
  • Undeclared labour reached 34%
  • Banks are labouring under non-performing loans that exceed 40% in value
  • Public debt has exceeded 180% of GDP
  • Young well-qualified people are abandoning Greece in droves
  • Poverty, hunger and energy deprivation have registered increases usually associated with a state at war
  • Investment in productive capacity has evaporated.

So, the first part of Dr Blanchard’s question “how much of an adjustment has to be made by Greece?” needs to be answered: Greece needs a great deal of adjustment. But not of the same kind that we have had in the past. We need more reforms not more cutbacks. For instance,

  • We need to adjust to a new culture of paying taxes, not to higher VAT rates that strengthen the incentive to cheat and drive law-abiding citizens into greater poverty
  • We need to make the pension system sustainable by eradicating unpaid labour, minimising early retirements, eliminating pension fund fraud, boosting employment – not by eradicating the solidarity tranche from the lowest of the low of pensions, as the institutions have demanded, thus pushing the poorest of the poor into greater poverty and conjuring up massive popular hostility against another set of so called reforms

In our proposals to the institutions we have offered:

  • An extensive (but optimised) privatisation agenda spanning the period 2015-2025
  • The creation of a fully independent Tax and Customs Authority (under the aegis and supervision of Parliament)
  • A Fiscal Council that oversees the state budget
  • A short-term program for limiting foreclosures and managing non-performing loans
  • Judicial and civil procedure code reforms
  • Liberalising several product markets and services (with protections for middle class values and professions that are part and parcel of society’s fabric)
  • Elimination of many nuisance charges
  • Public administration reforms (introducing proper staff evaluation systems, reducing non-wage costs, modernising and unifying public sector payrolls).

In addition to these reforms the Greek Authorities have engaged the Organisation of Economic Cooperation and Development (OECD) to help Athens design, implement and monitor a second series of reforms. Yesterday I met with the OECD’s Secretary General Mr Angel Gurria and his team to announce this joint reform agenda, complete with a specific roadmap:

  • A major Anti-corruption Drive and relevant institutions to support it – especially in the area of procurement
  • Liberalising the construction sector, including the market and standards of construction materials
  • Wholesale trade liberalisation
  • Media – electronic and press code of practice
  • One-Stop Business Centres that eradicate the bureaucratic impediments to doing business in Greece
  • Pension System Reform – where the emphasis is on a proper, long-term, actuarial study, the phasing out of early retirements, the reduction in the operating costs of the pensions funds, pension fund consolidation – rather than mere pension cuts.

Yes, colleagues, Greeks need to adjust further. We desperately need deep reforms. But, I urge you to take seriously under consideration this important difference between:

  • reforms that attack parasitic, rent-seeking behaviour or inefficiencies, and
  • parametric changes that jack up tax rates and reduce benefits to the weakest.

We need a lot more of the real reforms and a lot less of the parametric type.

Much has been said and written about our ‘backtracking’ on labour market reform and our determination to re-introduce protection for waged workers through collective bargaining agreements. Is this some left-wing fixation of ours that jeopardises efficiency? No, colleagues, it is not. Take for example the plight of young workers in several chain stores who get fired as they approach their 24th birthday so that the employer hires younger workers in their place to avoid paying them the normal minimum wage which is lower for employees under the age of 24. Or take the case of employees who are hired part time for 300 euros a month, made to work full time and threatened with dismissal if they complain. Without collective bargaining, these abuses abound with ill effects on competition (as decent employers compete at a disadvantage with unscrupulous ones) but also with ill effects on pension funds and public revenues. Does anyone seriously think that the introduction of well-thought out collective bargaining, in collaboration with the ILO and the OECD, constitutes ‘reform reversal’, an example of ‘backtracking’?

Turning briefly to pensions again, much has been made of the fact that pensions account for more than they did in the past; as much as 16% of GDP. But consider this: Pensions have shrunk by 40% and the number of pensioners is stable. So, expenditure on pensions has fallen, not risen. That 16% of GDP is due not to spending more on pensions but, instead, to the dramatic drop in GDP which brought with it a similarly dramatic reduction in contributions due to the fall in employment and the rise of undeclared labour.

Our alleged backtracking on ‘pension reforms’ is that we have suspended the further reduction in pensions that have already lost 40% of their value when the prices of the goods and services that pensioners need, e.g. pharmaceuticals, have hardly moved. Consider this relatively unknown fact: Around 1 million families survive today on the meagre pension of a grandfather or a grandmother as the rest of the family members are unemployed in a country where only 9% of the unemployed receive any unemployment benefit. Cutting that one, solitary pension is tantamount to turning a family into the streets.

This is why we keep telling the institutions that, yes, we need pension reform but, no, you cannot just lob off 1% of GDP from pensions without causing massive, fresh misery and a fresh recessionary round as this 1.8 billion multiplied by a large fiscal multiplier (up to 1.5) is withdrawn from the circular flow of income. If large pensions still existed, whose curtailment would make a fiscal difference, we would do it. But the distribution of pensions is so compressed that savings of such a magnitude would have to eat into the pensions of the poorest. It is for this reason, I suppose, that the institutions are asking us to eliminate the solidarity pensions supplement to the poorest of the poor. And it is for this reason that we counter-propose proper reforms: a drastic reduction, almost elimination, of early retirements, consolidation of pension funds and interventions in the labour market that reduce undeclared labour.

Structural reforms promote growth potential. But mere cutbacks in an economy like Greece’s promote recession. Greece must adjust by introducing genuine reforms. But at the same time, going back to Dr Blanchard’s answer, the institutions need to adjust their definition of growth-enhancing reforms – to acknowledge that parametric cuts and tax hikes are not reforms and that, at least in the case of Greece, they have undermined growth.

Colleagues have remarked in the past, and may do so again, that our pensions are too high compared to their older people and that it is unacceptable for the Greek government to expect them to foot our pension bill. Let me be clear on this: We are never going to ask you to subsidise our state, our wages, our pensions, our public expenditure. The Greek state lives within its means. Over the past five months we have even managed, despite zero market access and zero disbursements, to repay our creditors. We intend to keep doing so.

I understand that there are concerns that our government may slip into a primary deficit again and that this is the reason the institutions are pressing us to accept large VAT rises and large pension cuts. While it is our view that the announcement of a viable agreement will suffice to boost economic activity sufficiently to produce a healthy primary surplus, I understand perfectly well that our creditors and partners may have cause to be sceptical to want safeguards; an insurance policy against our government’s possible slide into profligacy. This is what lies behind Dr Blanchard’s call for the Greek government to offer “truly credible measures.” So here comes an idea. A “truly credible measure”.

Instead of arguing over half a percentage point of measures (or on whether these tax measures will have to all of the parametric type or not), how about a deeper, more comprehensive, permanent reform? An automated hard deficit brake that is legislated and monitored by the independent Fiscal Council we and the institutions have already agreed upon. The Fiscal Council would monitor the state budget’s execution on a weekly basis, issue warnings if a minimum primary surplus target looks like being violated and, at some point, trigger automated across the board, horizontal, reductions in all outlays in order to prevent the slide below the pre-agreed threshold. That way a failsafe system is in place that ensures the solvency of the Greek state while the Greek government retains the policy space it needs in order to remain sovereign and able to govern within a democratic context. Consider this to be a firm proposal that our government will implement immediately after an agreement.

Given that our government will never again need to borrow from your taxpayers or from the taxpayers standing behind the IMF, there is no sense in a debate between member-states that compete on whose pensioners are poorer, instigating a race-to-the-bottom. Instead, the debate moves on to debt repayments. How large should our primary surpluses be? Does anyone seriously believe that the growth rate is independent of the primary target set? The IMF understands fully that the two numbers are linked endogenously and that this is the reason why Greece’s public debt must be looked at at once.

Our large debt overhang should be thought of as a large unfunded tax liability. While it is true that the EFSF and GLF slices of our debt are long-dated and the interest rate is not large, the Greek state’s unfunded tax liability, our debt, features a lumpy component that impedes investment and recovery today. I am referring here to the 27 billion of SMP bonds still held by the ECB. This is a short-dated unfunded liability that potential investors in Greece take a look at it and turn back because they can see the funding gap this part of the debt creates instantly and because they recognise that this lump of 27 billion on the ECB books stop Greece from taking advantage of the ECB’s quantitative easing at the very moment when this program is unfolding and is reaching its maximum capacity to come to the aid of countries buffeted by deflation. It is a cruel irony that the country most afflicted by deflation is the one that is excluded from the ECB’s anti-deflation remedy. And it is excluded because of this 27 billion lump.

Our proposal on this front is simple, efficient and mutually beneficial. We propose no new monies, not one fresh euro, for our state. Imagine the following three-part agreement to be announced in the next few days:

Part 1: Deep reforms, including the automated hard deficit brake that I mentioned.

Part 2: A rationalisation of Greece’s debt repayment schedule along the following lines. First, to effect an SMP BUY-BACK Greece acquires a new loan from the ESM, then purchases the SMP bonds back from the ECB and retires them. To underpin this loan, we agree that the deep reform agenda is the common conditionality for successfully completing the current program and for securing the new ESM arrangement that comes into operation immediately afterwards and runs concurrently with the continuing IMF program until the end of March 2016. Short-term funding relies on the outstanding disbursement from the current program and medium to long term funding is completed by the return of the SMP profits, coming up to 9 billion out of the 27 remaining billions, which go into an escrow account to be used in order to meet Greece’s repayments to the IMF.

Part 3: An investment program for kick-starting the Greek economy funded by the Juncker Plan, the European Investment Bank – with which we are in talks already – the EBRD and other partners who will be invited to participate also in conjunction with our privatization program and the establishment of a development bank that aims at developing, reforming and collateralizing public assets, including real estate.

Does anyone truly doubt that this three-part announcement would dramatically change the mood, inspire Greeks to work hard on hope of a better future, invite investors to a country whose asset prices have fallen so dramatically, and give confidence to Europeans that Europe can, even at the 11th hour, do the right thing?

Colleagues, at this juncture it is dangerously easy to think that nothing can be done. Let us not fall prey to this state of mind. We can forge a good agreement. Our government is standing by, with ideas and with the determination to cultivate the two forms of trust necessary to end the Greek drama: Your trust in us and the trust of our people in Europe’s capacity to produce policies that work for, and not against, them.


  • Yani, no no and NO! This is not working, no one is convinced and the merits of your proposal are now irrelevant. What your insistence will achieve is bring about capital controls and then in the ensuing panic a worse deal.

    Or do you think you can negotiate Grexit when you have failed to negotiate financing?

    Read the note below and tell me whether you can live with yourself if Greece ends up outside Euro AND the EU.

    I implore you Yani, please do the deal!

    • Yes, because the alternative is disastrous and endless in negative consequences. Being in favour of a deal does not mean being pro austerity, it means being against disaster.

    • I disagree with your panicky attitude (once the bankrupt is formal, Greece will have freer hands to start all over without that unbearable burden) but anyhow it’s not really in the hands of Yanis, Alexis Tsipras or anyone in Greece: the real powers of EU have been actively sabotaging any deal because they want since day one to force Syriza to manage the bankruptcy, what is complicated because of EU legislation that actively opposes socialism. I must say here that the euro is not so much a problem, as the case of “dollarized” socialism in Ecuador shows: Ecuador is an example to follow, not just by Greece but by all the European periphery: you can recover with a CCC- credit rating if you have a good socialist government and have gotten rid of the debt burden. So IMO the best deal for Greece right now is full bankruptcy, no more debt and start anew with serious socialist-minded people backed by the great majority of the Greek People, as opinion polls consistently show. The delicate issue is how to implement socialist policies within the ultra-liberal EU legislation, that protects corporations and leaves the citizens without social rights.

  • “Read them and judge for yourselves whether the Greek government’s proposals constitute a basis for agreement.”

    Of course they do!

    • Of course they do. But Hubert Marcks rightfully noted how european media or german journalists reported about them. It is and stays a nightmare. I watched Mr. Dijsselbloem stating in an arrogant way that he had not received (what did he say, I forgot? “substantial”? Doesn’t matter anyway) proposals. Since years they want Greece to not succeed.

    • The tide is turning though. SuddenIy there is a cascade of voices criticizing the Creditors. There is aIso a Europe-wide solidarity network demonstrating on behalf of Greece next week. Ten thousand people demonstrated yesterday against Austerity in Iondon…

      Here is an exceIIent & concise post from Jacques Sapir

      In case you are not comfortable reading french, I offer my own rough transIation beIow –

      The Three Victories of the Greek Government
      BY JACQUES Sapir · 20 June 2015

      Whatever the outcome of the Eurogroup to be held on June 22 next Monday, it is now clear that the Greek government – improperly called “government of the radical left” or “government of SYRIZA,” but in reality a government union (and the fact that this union was made with the sovereigntist party ANEL is significant) – has won spectacular successes. These successes demonstrate that Greece, where the people have regained their dignity, is the one European country where the example set by its government is now showing the way forward. But, and this is most important, this government – in the fight it has led against what is euphemistically called the “institutions”, ie mainly the political-economic apparatus of the European Union, the Eurogroup, the European Commission and the European Central Bank – has shown that the “Emperor has no cIothes.” The entire structure of this politico-economic apparatus, complex and lacking in transparency, was challenged to respond to a political demand, and it has been unable to do so. The image of the EU has been fundamentally altered. Whatever kind of meeting next Monday, if it results in a failure or a surrender of Germany and “austéritaire” or even, which we can not exclude, in the defeat of the Greek government, the EU’s political and economic apparatus has openly demonstrated its harmfulness, incompetence and rapacity. The European people now know who is their worst enemy.

      The European Union strategy

      Throughout the course of the negotiations which started at the end of January, the Greek government was faced with the inflexible position of these institutions. Yet this inflexibility reflected more a tragic lack of strategy and a pursuit of conflicting objectives than real will. Indeed, it was well understood that these institutions had no intention of yielding on the principle of Euro-austerity, a policy set up at the European level under the pretext of “saving the euro”. Therefore, they have refused the pIea of the Greek government whose proposals were reasonable, as many economists have stressed [1]. The proposals made by the institutions have been described as the economic equivalent of the invasion of Iraq in 2003 by a columnist who is not listed on the left of the political spectrum [2]. We must understand this as a terrible admission of failure. A position was publicly defended by the representatives of the European Union which was in no way based in reality, with the soIe defense for this being a narrow ideology. These representatives were incapable of evoIving their positions and trapped themselves in false arguments, in the same way that the US government chained itself to the issue of weapons of mass destruction attributed to Saddam Hussein.

      At the same time, these Institutions have continuousIy proclaimed their desire to keep Greece in the eurozone. Here we must understand the immensity of the paradox: they say one thing and then do everything so that the opposite occurs. For if the Eurogroup countries really want Greece to remain in the euro zone, they must recognize that the country needs major investment over several years, and that it is therefore necessary that the Eurogroup finance this investment plan. By pursuing two contradictory objectives, both austerity and keeping Greece in the Euro zone, it is more than likely that the institutions will lose both ways. Greece will leave the Eurozone, and the austerity policy will be arrested, with political consequences for both Spain and Italy.

      The Greek government, by resisting the demands of the European institutions, has forced into open view the contradictions of EU policy. And by its attitude, the EU underlines this incoherence. But it also highlights something else: the congenital malformation of the Euro zone.

      The euro, dangerous monetary abortion

      However, the question arises as to why the institutions – and politicians like Angela Merkel, Juncker, Francois Hollande – are unable to see that without an investment plan that would allow Greek productivity to regain its competitiveness within the Euro, Greece cannot survive in the Eurozone. The answer is quite simple: it is the intrinsic fragility of the Eurozone itself, to which is added the political as well as symbolic investment that these leaders have made in its implementation.

      The Euro is a “common currency” for countries that use it. This is reflected in the technical structure of the Euro. However the existence of Target 2 cIearing accounts between the German, French, Italian or Greek euro shows that we are not in the presence of a true single currency but of a system establishing an iron rule in the relative parity of the currencies. [3] In fact, the Euro is a fixed exchange rate regime (as was the Gold Standard) disguised as a single currency as there is no budgetary federalism, fiscal or social. Yet the construction of this economic federalism is a necessary condition for a single currency to function in heterogeneous territories. [4]

      The idea that the introduction of the Euro would – by means of the absence of such federal institutions – generate the political movement that would lead to their construction proved to be false. I have the greatest respect for those who, among economists, continue to advocate for the implementation of these federal institutions, but it is a respect merited by their obstinacy more than their intelligence. They are stubborn indeed, but reality has ruled. There will be no federal construction, and the Euro will be sentenced to a mere monetary runt whose survival generates only repeated crises. And this demonstration we owe to the Greek government.

      The Euro, a false “single currency”

      However, the Greek government has made a third demonstration, that of the intrinsic fragility of the Euro. If there is someone who is aware of the extreme fragility of the euro zone – a point I stressed in an article from 2006 [5] – it is Mr. Mario Draghi, President of the European Central Bank. We must listen and read what he said in the press conference he gave in November 2014: “It should be clear that the success of monetary union in any country depends on its success in all countries. The Euro is – and HAS to be – irrevocable in all member states, not just because the Treaties say so, but because without this there can be no genuine single currency.”

      It is a declaration of extreme importance. Draghi says that a local failure of the euro would mean an overall failure. There is nothing in economic theory that supports this. When the Irish Free State separated from the United Kingdom, it did not cause a crisis of the British Pound. If tomorrow Kashmir Ieft the Indian Union and adopted its own currency, this would not call into question the Rupee for the other states of the Indian Union. But what Draghi said, if not consistent with the theory and practice of monetary unions, is actually true in the case of the Euro. This is because the Euro is not a complete monetary union, and cannot be in reality, and is only a subterfuge to impose on European countries a regime of exchange rate stability – for which Germany had the greatest need, in order to develop its trade and economy. Without mechanisms to ensure the fulfillment of monetary union, involving very substantial transfers from northern European countries (most of aII Germany) to the countries of the European south, the Euro will remain incomplete and, in fact, a monetary runt. This is the reason why European leaders are distraught at the prospect of “Grexit”. Their perspective is not the Apocalypse claimed by the Governor of the Central Bank of Greece into which one can read only too well unhealthy political games. Today ever more numerous voices begin to say that exit from the euro zone for Greece would be a lesser evil. [6] Again, we owe this demonstration to the Greek government, to whom we wiII be IargeIy indebted in the coming years.

      On these three points, it is clear that the Greek government has won key victories. These victories, and the example that they give both internally with the decision of the Syriza leaders to ally with sovereignists ANEL and externally vis-à-vis the behavior of the Institutions shall be the most valuable achievements of the Greek crisis, whatever its outcome.

    • Sapir’s article that you translate below is pretty much correct, thank you. I like it. However I would add that there is still a layer of illusion because it is not a matter of mere “dogmatism” (that also) but of actual dogma. We would be naive if we think that, like the Syriza ministers, the other actors are autonomous: they obey higher powers, namely the big corporations and banks. Schauble does not represent Germans nor acts the way he does because he is a grumpy “austerian dogmatic” only but because he represents primarily Deutsche Bank, IG Farben and Bayer (among others), Draghi represents Goldman Sachs and so on for the rest of actors, major or minor. Syriza would be better off directly negotiating with them (although it would be of no use either), as the ministers of the bourgeoisie will obey what these powers command (and not the other way around: that would be democracy!)

      That’s why there won’t be any deal: the oligarchs only want to get something valuable in their extortion racket. And they are even less interested in helping those “reds” than they were in aiding their Samaras puppet. Actually they hope to cause the fall of the Syriza government and the “return to normality” (although this seems more and more impossible, they still believe they will get away with their plunder somehow and that the people will eventually understand who are the masters that must be obeyed, one way or another) and will do everything in their hand to blow up the Syriza government. Tsipras et al. have been so far very intelligent and pedagogic, yes, exposing much of the contradictions and managing to rally the Greek people and to some extent a growing (but still weak and irregular) fraction of the rest of the European peoples. But this is just the beginning: the challenges ahead are enormous. I wish them the best because their success is the success of us all Europeans and humans but we must acknowledge that the struggle has just begun.

  • Yanis, you certainly deserve an E for effort with the European Union.

    You taken on the most repressive system since the demise of the Soviet Union. You have tried valiantly to open a public dialogue on EU debt and expansionary deflation policies that have had empirically rather disastrous results, not only in Greece but most of the EU Periphery countries. You have had to face an army of zombies from the leaders of the other burned out economies, who are sort of in the position of the Emperor without clothes, defending the same policies that have decimated economically their own countries.

    God knows where this is going to lead, but as Ioannis Metaxas said to the Italian ultimatum, it is better to fight for honor than to surrender in disgrace national sovereignty.

    My view has only hardened that the EU is a hopelessly repressive organization and that GREXIT would be not only a long term salvation for Greece but also many other European countries, allowing them restoration of their political and economic freedom from Brussels. Brussels needs to be severely downsized. The German cartel needs to be restricted to Germany. National self determination should be the norm.

    Your platform is excellent for recovery after GREXIT. With a deep debt haircut, the flexibility of a proper central bank and national currency, this platform will lead to a long run of very rapid economic growth in Greece.

  • You need to rebuild trust. It evaporated long before you came to power but you have made matters worse by inappropriate language and a hostile demeanour. This is not the Ottomans or the Nazis. This is the european family. Freedom or Death is not a constructive sentiment in family matters. I urge you to change the narrative. It is never too late.

    • It is the IV Reich. I am not Greek but I am a “citizen of the European Union” (meaningless, almost hurtful, as who govern me are not elected: who elected Draghi, how does Schauble represent me?) I can only agree to that: slavery and colonization via debt and currency manipulation by some privileged “Nordics”. It is indeed the IV Reich and all I can hope is that this destructive EU collapses, as it is obvious that “core Europe” is not yet where it must be.

      There is no “European family” anymore (if there ever was one): families help their weaker members and do not submit them to slavery and abuse, families forfeit debts that can’t be paid. This is just the worst colonialism I can imagine.

      Also this is not an issue of “narrative”, it is an issue of a most serious humanitarian crisis and of effective bankruptcy that needs to be managed without damaging the citizens (if banks collapse, I could not care less instead). It is also an issue of how the EU and the IMF, the global bankster mafia for clarity, are determined to make Syriza manage the unavoidable Greek bankruptcy (and possible side-effects), in the hope of making their government collapse. Ironically the popular support has only been increasing, what means that we are having a “red Greece” for a long time quite possibly and that Schauble, Lagarde and Dragi have miscalculated.

      It also means that the EU will fall to pieces, slowly but steadily, like a leper. Now Greece, tomorrow Spain, then Ireland, etc. Deprived of its colonies, Germany and London will then move on to extort other countries: France and Italy surely (they are Latins after all, “untermenschen”, right?) Once these quit, the EU will be history.

      We still face the challenge of reinventing Europe from the ashes but that may take a long time and will have to be done in socialist parameters.

  • I wonder if the word ‘parametric’ in this context will be clear to everybody not aquainted with greek english. I had to think about it, and decided it does precisely describe what is going on.

    Too often people want to reduce an issue to a few ‘measurements’ and numbers, and subsequently find the solution by increasing or decreasing another number. A tax, a subsidy, etc. This seems very rational, but often risks being over simplistic and missing the point. In the Netherlands one of our politicians started a discussion on what he calls ‘economism’, also a word that risks being misunderstood. But it is this same issue: too often we misdiagnose problems if we insist on describing the situation with a few standard metrics and numbers. And then we take the wrong measures because we think the solution has to move one of those metrics and numbers in the right direction. And all to often, that is shortsighted. Hitting the screw with a hammer. Because you’ve got a hammer.

    .. I hope people try to understand what Yanis means with ‘parametric’. He has a point.

  • You are giving away too much. Hold your position and offer absolutely nothing. The other side has already lost and we now have to deal with their face saving nonsense in order to repair their bruised ego.

    No compromise. We are the champions.

    • I would say the Syriza government has indeed already won – in the eyes of those who are ready and willing to accept that sound economic analysis and dedication to humane and democratic values are assets, not liabilities.

      Unfortunately, the neoliberal technocrats, led by the germans, who are calling the shots in Brussels, appear to have completely lost that perspective, if they ever even had it to begin with.

      I still hope that these robots will finally succumb to the logical flaws in their own ideological programming and simply self-destruct, before they can ultimately destroy what is left of european democracy.
      But as long as this does not happen, they will continue the execution of their defunct routines, defying logic, whatever the cost.

      (By the way, as was to be expected, with the exemption of a few left-wing bloggers and commentators, there has been almost no mentioning of the Minister’s above statement in any major german news outlet.)

    • Hubert:

      Agreed. Greece has morally won even if it is forced into a losing proposition (which will make her win even more in the end). The fact that a somewhat irrelevant, disconnected and thinly supported group outside Greek borders like Syriza has forced this eurobureaucracy establishment into 5 months of “negotiations” is truly triumphant.

      Syriza might still suffer loses in the end due to its terrible and deafening isolation, but Greece already has emerged out of this as a winner.

      My own contempt and disgust for the european establishment has never been greater.

    • I agree. Greece has “won” especially after this:

      This sums it up: “The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told. They entirely duck their own responsibility for five years of policy blunders that have led to this impasse.” (AEP)

      “If we want to date the moment when the Atlantic liberal order lost its authority – and when the European Project ceased to be a motivating historic force – this may well be it. In a sense, the Greek crisis is the financial equivalent of the Iraq War, totemic for the Left, and for Souverainistes on the Right, and replete with its own “sexed up” dossiers.” (AEP)

      “The guardian of financial stability is consciously and deliberately accelerating a financial crisis in an EMU member state – with possible risks of pan-EMU and broader global contagion – as a negotiating tactic to force Greece to the table.” AEP/Ambrose Evans-Pritchard

    • Yes, Triada. The “regime chance” element of this despicable behavior by the eurocrats is impossible to hide. This is a raw assault on democracy and we have everything on tape.

    • Did everyone see: “Yanis Varoufakis: A pressing question for Ireland before Monday’s meeting on Greece” today in the Irish Times?

      This is utterly appalling, not to mention Kafkaesque. “Perhaps the most telling remark by any finance minister in that meeting came from Michael Noonan. He protested that ministers had not been made privy to the institutions’ proposal to my government before being asked to participate in the discussion. To his protest, I wish to add my own: I was not allowed to share with Mr Noonan, or indeed with any other finance minister, our written proposals. In fact, as our German counterpart was later to confirm, any written submission to a finance minister by either Greece or the institutions was “unacceptable”, as he would then need to table it at the Bundestag, thus negating its utility as a negotiating bid.” (YV)

    • “This sums it up: “The European Central Bank, the EMU bail-out fund, and the International Monetary Fund, among others, are lashing out in fury against an elected government that refuses to do what it is told.”

      Triada, the elected government has already done what it is told — austerity.

    • Triada:

      This is precisely what we mean when we say that Schauble and his criminal gang are already very sore losers. One more week of this Berlin nonsense and the entire world will join in universal condemnation of Christian (same pseudo Christians, I tell you) Democratic ( a euphemism, I know; in reality absolutists) nonsense, incompetence and stupidity.

      Expose the Berlin Beast is the name of the game.

  • Reblogged this on Denkraum and commented:
    Die Rede, die Yanis Varoufakis beim Treffen der Eurogruppe (die Finanzminister der Euro-Staaten) am Donnerstag,, den 19.Juni 2015:

  • Plassaras: “The other side has already lost and . . .We need to do absolutely nothing. To the victor go all spoils and we have already won.”

    Are you serious? If you are, then explain to the readers here how the “other side has already lost” and Greece won.

    If you are not serious, and you are just simply clowning around as usual, then all I want to know is this. Are you a clown or do you just identify as one?

    • Not conversing with me does NOT preclude you from explaining to the readers here what you the meant from such laughable statements.

      Go ahead. Enlighten the readers here. And in the meantime, I’ll take your kind advice and go catch up on some reading. And rest assured, I’ll be back.

    • Thank you for the link.

      Ambrose Evans-Pritchard is basically saying the same as Mark Weisbrot — it’s not about economics, but politics! Indeed.

      And what had you to say about Mark Weisbrot a few days back?

      “Weisbrot is the sort of fellow that he is totally marginal and completely ineffective as a supporter of the Greek case. He is a 100% liability.”

    • AEP is nothing like Weisbot. AEP is part of the insider class and very much connected, meaning that he speaks to a worldwide conservative audience which is the hardest for Greece to convince. AEP is the editor of a newspaper that is recognized the world over. AEP delivers a great punch because his newspaper represents the same conservatives who form Merkel’s own party’s conservative ideology. AEP’s confidence and message potency are 100 times greater because he is devoid of the typical insecurities of the Left whose influence in European affairs is – as we all know – subzero. You of course lost in Canada should know that Greece has no allies in Europe because the European Left is beyond miserable; it’s actually embarrassing in its incompetence and inability to even produce anything of value other than the typical whining and ineffectual leftist rhetoric.

    • “AEP is nothing like Weisbot. AEP is part of the insider class and very much connected, meaning that he speaks to a worldwide conservative audience which is the hardest for Greece to convince. AEP is the editor of a newspaper that is recognized the world over…”

      A meaningless posting above by one who just got “caught with his hand in the cookie jar.”

    • The comparison is apt. You got caught being a poseur here, and you tried to hide your embarrassment with that ridiculous posting.


  • Yani, I apologise for posting again, but I did some digging on your latest proposal “for a legislated debt brake mechanism that, triggered by an independent fiscal council, would automatically reduce all state outlays by the degree necessary to set the state back on course toward some pre-agreed primary target”.

    This proposal is another shock in this increasingly surreal ‘negotiation’ between Greece and its creditors. The reason why this is so weird is because it is a ‘Merkozy’ proposal from an earlier stage of the crisis! Germany and France proposed in 2011 the introduction of debt-limitation rules in national constitutions to deal with the problem of state indebtedness in the Eurozone. Countries would be forced to amend their constitutions to forbid public deficits exceeding a certain percentage of GDP, similar to Germany’s “debt break” (Schuldenbremse), which would limit any new borrowing to 0.35 percent of GDP from 2016. France had said that it would introduce its own debt break, a constitutional balanced budget amendment Paris is describing as a “golden rule.”

    Progressive lawyers resisted this proposal at the time as a regressive orthodox measure that aims to bind the state into a ‘neoliberal’ view of spending and to effectively outlaw demand side interventions in the economy. This now coming back as a proposal from the supposedly ‘almost Marxist’ Varoufakis is… well, surreal.

    Read further here:

    • We are way past the “idea phase” of this negotiation and whose intellectual property is the nonsense discussed or more precisely refusal to be discussed We are now in a pro forma hard negotiation stage where the most skilled has won.

      Keep in mind that the eurocrats are at such an impossible position that even if they “win” (aka refusal to yield) it truly means that they have lost already.

  • Let’s be frank about it. It’s the politics stupid with a particularly nasty Greek twist.

    It would appear that ND and PASOK (the former Berlin collaborators) have already collapsed. With 28.5% difference in the polls , unknown and untested Syriza has made a meal of the Greek political establishment.

    And given that Syriza has already won over the eurocrats it also means a gigantic defeat for the incompetent Greek political system. Maybe Syriza has a case after all and a clear mission to clean house:

    • Holy Skata. Here are the first four paragraphs using Google translate for those who do not read/speak Greek. Happy Father’s Day everyone!

      “Specifically, the survey, conducted between 11th and June 17th by phone, SYRIZA in voting estimate gathers 47.5% against 19.5% of the New Republic.

      Here Golden Dawn River and 6.5% both, KKE 5.5%, 4.5% and PASOK Independent Greeks with 4%.

      The Centre Union collects 2% “other party” 4%, while 19.5% recorded pollster percentage of undistinguished vote.

      Alexis Tsipras is appropriate Minister with 62%. Antonis Samaras gathers 20% pososto15 gathers% “no” and 3% is no opinion.”

    • “Do me a favor and go take a hike . . . . Wrong place for the post. It was meant for the Canadian idiot.”

      Oh my! It appears that our resident poseur Plassaras is in an agitated state of confusion.

      And speaking of “taking a hike,” it was our resident poseur Plassaras himself who announced a few years back that he was “taking a hike” from this blog. Why was such a silly and infantile announcement ever made is anyone’s guess. Anyway, as the deadline approached, he moved the deadline back to a later date. And when that second deadline came and went, lo and behold, he was still here — and has been here ever since, sullying this excellent blog with his crass and rude postings. His explanation for sticking around? “We were meant for each other.”

  • So let’s summarize the absurdity of the current situation:

    1. The lenders want to advance money to Greece so that the next day 95%+ of such funds go back out to the lenders’ account.
    2. For this self-serving act (described in #1) they want Greece to abide to terms which Greece has accepted by 95% and perhaps a 5% is difficult or politically impossible to implement.
    3. The lenders describe all this as “a last chance for Greece” even though it’s abundantly clear that this is a last chance of lenders’ nonsense of this caliber.

    I wonder what the lenders would feel or say when their last proposal is put into a referendum for the Greek people to decide as the ultimate decision makers.

    Does Schauble really believe that there is even a small chance that such referendum would justify his absurd positions? Are all in Berlin idiots or what?

  • I fully understand the very low quality people Yanis has to deal with in Brussels, but we have no other choice but to reach higher ground:

    • As we have repeatedly said on many occasions, Berlin has already lost and Athens won. What remains now is for Berlin to invent a false narrative which portrays Schauble as the winner and Tsipras/Varoufakis as the losers. And all this because the Berlin morons are genetically modified sore losers.

  • There was a disciple of Bacchus
    Named Yanis Varoufakis.
    After sipping some magical brew,
    He promptly decided to
    Turn Herr Schauble into a jackass.

    (pardon my “ass”onance)

    (Hi Maju)

  • 1950s. The Greek finance minister is signing off an a 50% reduction of German debt.

    Send as gift to: Angela Merkel, Wolfgang Schäuble, Martin Schulz, Sigmar Gabriel and whoever it may concern.