The Worst Case Scenario for the Eurozone
And so the nightmare continues. Are we heading for the worst case scenario? To answer this, we must first work out what that is.
I was recently sent a book that warmed my heart and disturbed my soul. It is entitled Antisemitism: Real and imagined: Responses to the Canadian Parliamentary Coalition to combat antisemitism, edited by Michael Keefer (Waterloo Ontario: The Canadian Charger, 2010). Before I share my thoughts occasioned by reading it, a full disclosure is important:
The Art of the Possible: Or how to blend Eurobonds with Maastricht
Gavyn Davies, in today’s FT (click here) suggests, as we do in our Modest Proposal, that eurobonds are preferable in the fight against the vicious circle facing the eurozone than the current strategy of loaning bankrupt states money they cannot repay under the offered terms. He writes: “[T]he ECB may eventually come to prefer…for the […]
The ECB's expensive folly: A new Maginot Line
Behind the scenes the European Central Bank (ECB) is struggling to construct a barrier that will prevent the firestorm which started in Greece from breaching the Iberian defences and, eventually, from turning to Italy. It is only right and proper that the ECB should try to accomplish this. The only trouble is that the barrier […]
Cutting our noses to spite our faces
The trouble with austerian logic is that it is grossly illogical. It does not even make sense in terms of the logic of microeconomics, let alone that of macroeconomics. Consider the current conundrum facing Greece and Ireland, the eurozone’s set of failed states (so far): Both countries have been forced to slice 10% off government […]
Stiffen your lip Wolfgang!
In today’s Financial Times, Wolfgang Munchau identifies correctly the problem with the current EU strategy for arresting the euro crisis (click here for his article). His proposed solution is also on the ball. Indeed, it is, in substance, very, very similar to our Modest Proposal. However, though he identifies the problem and the essence of […]
Two radio interviews promoting the Modest Proposal for the Euro
In my bid to promote the Modest Proposal for the Euro, I have embarked on a number of interviews. Here are links to two such, rather long, very recent interviews. The first one with Doug Henwood, Radio KPFA Berkeley, and the second one with Karen Coleman of Irish Radio Station Newstalk: 20th November 2010, Doug […]
25th April 2010: Traders “will Lose Their Shirts’ Betting Against Us.” George Papakonstantinou, Greece’s Finance Minister a week before Greece declared effective bankruptcy and ran for cover into the steely bosom of the IMF-EU loan agreement. 26th November 201: “I should warn those investors who are short selling Spain that they are going to be […]
What will it take to stop the domino effect on its tracks before it reaches Spain and Italy?
Richard Milne asks in today’s FT (click here for the article): What will it take to stop the domino effect on its tracks before it reaches Spain and Italy? He considers two ideas: One is a form of ECB “quantitative easing” under which the ECB massively accelerates its purchases of Spanish and Italian bonds in […]
Unilateral default vs negotiated debt reduction
Michael Burke took me to task for writing, in our Modest Proposal, that it is “utopian to expect member states to default and remain within the eurozone.” Michael asks: “Why? Local, county and state authorities have all defaulted in the US, without having to flee the US Dollar area. Surely default, partial or otherwise, is an […]
The idea of a wholesale attack on private and public European debt is catching on.
It seems that our idea of a multilateral negotiation for reducing the total size of state debt and bank losses is catching on. Here is what Gerald Holtman wrote in the FT today: The problem is that if you force investors to shoulder some of the losses you cannot move one country at a time. […]
A New Versailles Treaty Haunts Europe. (And this time it is not just me thinking so…)
Last May, when the ‘rescue’ package was imposed by the EU and the IMF on Greece, all commentators were talking of a ‘bail out’ for Greece, differing only on whether it was deserved or not. A minority protested that the supposed rescue was bad for Greece, in that it came with some many strings attached […]
How would our Modest Proposal help Ireland?
Here is an email exchange I just had with Alan Freeman on our Modest Proposal for Europe Alan Freeman: Do you have any opinion on what this proposal would imply for Ireland?
How safe will our banks be after Basle III?
Woefully unsafe, I am afraid! Here is why:
The Modest Proposal for the Euro in Greek
Πατήστε εδώ και εδώ (σε δύο δόσεις) για την ελληνική έκδοση της Πρότασής μας για έξοδο της ευρωζώνης από την Κρίση, την οποία στα αγγλικά την αποκαλούμε A Modest Proposal. Ακόμα παρακάτω παραθέτω το κείμενο πρόσφατης ομιλίας μου με παρόμοιο θέμα: Ομιλία Γιάνη Βαρουφάκη στην Εκδήλωση της Επιστημονικής Ένωσης Δικηγόρων, Παρασκευή 26η Νοεμβρίου 2010, Πνευματικό Κέντρο […]
Gavan Butler links the East Asian collapse of the late 1990s to the current euro crisis
I just received the following email from my friend and colleague Gavan Butler, in response to my piece on the euro crisis. I think it makes for interesting reading: Dear Yanis. I enjoyed your contribution. It took me back to the debates in the period 2001 to 2003 about what differently might have been done […]
The Modest Proposal for the Euro
A two-part plan for overcoming the eurozone’s crisis, re-designing its crumbling architecture, and reinvigorating the European Project (jointly authored with Stuart Holland, ex Member of Parliament in the UK, a former advisor to Jacques Delors and, currently, Visiting Professor at Coimbra University, Portugal)
An earlier version of my modest proposal, as published in MRZine.org
PREAMBLE It is now abundantly clear that each and every response by the eurozone (EZ) to the galloping sovereign debt crisis has been consistently underwhelming. This includes, back in May, the joint EZ-IMF operation to ‘rescue’ Greece and, in short shrift, the quite remarkable overnight formation of a so-called ‘special vehicle’ (officially the European Financial […]