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Tuesday, February 10, 2015

Varoufakis: "Greece Must Default Within The Eurozone!"

"To conclude, Europe’s optimal strategy is to let Greece default, to allow the Greek government to find ways to live within its tax take for the next year or so and, at the same time, work out the Overall Solution to the euro crisis that was promised last year and never delivered. A Greek default will provide the clarity and the time-space to do this properly. The other two alternatives (more bailouts or a Greek exit) constitute cruel, unnecessary and unusual punishment. For the whole of Europe".

Details here.

8 comments:

  1. I have read this before. What would you think are the practical consequences of this position when it comes to the negotiations with the Eurozone/ECB?

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    1. I can't imagine that he would say the same thing today, certainly not as FM, but it's like with all deep and passionate convictions out of "Sturm und Drang" - they never disappear altogether. They remain stored somewhere in the back of our minds.

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    2. Even Mr Varoufakis may have to accept one day that when you want to be a member of the euro zone you have to live by its rules. As a former EcB chief economist has once put it: when you are a member of a club of non-smokers you must stop smoking. Or you can leave, of course.

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    3. Listening to the "advice" of ECB personnel is rather like listening to the police talking about crime: all very interesting, but no substitute for a good lawyer.

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  2. I am beginning to wonder whether someone like Dragasakis, no friend of Varoufakis', might be whispering into Tsipras' ear that the Finance Minister had mislead them on the wrong negotiating strategy; that a change in that position could do marvels to Tsipras himself as the good cop who removes the bad cop. And, of course, Dragasakis would stand ready to take over the position. Greece would have a prudent Godfather instead of a hot-blooded Sonny Corleone. And that would also allow Tsipras to make some statesmanlike U-turns.

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  3. Well, don't you think that would be a very dramatic move only a little more than two weeks after the elections? I might be wrong, but my impression is also that Tsipras is a stubborn as Varoufakis, if not more.

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  4. Klaus, I think you are dead right about the Troika of Tsipras-Dragasakis-Varoufakis, Greeks have never trusted each other, and not without reason. I think Varoufakis got the "kiss of death" when he called Athens at yesterday's meeting, I think he had a deal, not a perfect one, but the best possible. I don't think it will prompt Tsipras to U-turns, but he may find that he can not get the same deal, it may turn into a "Dutch auction". I don't think Varoufakis has a future in Greek politics, he is too intelligent. A good thing about it could be that we would not have to wait until September for Varoufakis "megali idea" (this time not territorial) for future European politics and economy.
    Lennard

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  5. Varoufakis last night demonstrated a last minute kolotoumba, but not in the direction most commentators expected the greeks to do it.

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