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Saturday, July 15, 2017

The Spanish "El Mundo" On The Blind Arrogance Of Yanis Varoufakis

Below is an absolutely outstanding analysis of Yanis Varoufakis and his accomplishments as Finance Minister of Greece from the Spanish "El Mundo". Regrettably, I cannot find an English translation.

Adults in the Room: The blind arrogance of Varoufakis

25 comments:

  1. Because I was a witness to Varoufakis' rise and developmental thought processes, I can state without any hesitation that Varoufakis does not suffer from arrogance but rather from a fair amount of leftist naivete. He may like the spotlight, as many others do, but being a publicity hound is not a crime rather a tell-tell sign of certain character traits (which by themselves don't mean much but are important to the individual as indicators of his driving force).

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    1. he is a wet match..

      V

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    2. What is a "wet match"? Mouskemenos?

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    3. More of an american phrase. More or less completely useless. When a match is wet there is no potential energy.
      V

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  2. As far as the El Mundo fascist and clearly pro-german propaganda, I would rather hear from the principal figure himself:

    https://www.youtube.com/watch?v=nGt82RFfg3U

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  3. El Mundo is an instrument of the pro-german remnants of fascism in Espana and its opinions/analyses are useless.

    Better to hear it from the horse's mouth:

    https://www.youtube.com/watch?v=nGt82RFfg3U

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  4. Let's be honest. Varoufakis has a very important and powerful message. Varoufakis' problem is that he met Tsipras:

    https://www.youtube.com/watch?v=A1BNn614T98

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  5. This is not the first time that I have raised this issue (absence in vetting before we publish anything) but is worth mentioning again and here is why:

    Cairo Communications is a multi-media business with $1.5 Trillion worth of assets than only inks a tiny little profit of a few million (10+). Cairo owns Corriere de la Serra which in turns owns El Mundo.

    Now if you are part of uber right media group which barely makes any profit and is burdened by loads of debt, what do you expect? That such a group in an effort to make more sales that it might come to the defense of Varoufakis? Obviously not. These are well-known attack dogs which will rip you apart in front of an audience for the dubious purpose of arresting an assured plunge of advertising revenue. The minute you begin to show signs of fair minded journalism all the big time advertisers will pull the rug under you.

    So what is a tabloid like El Mundo doing in a serious blog of observing Greece? Right, the two concepts are incompatible. The minute you say El Mundo the next thing that comes to mind is a descendant of generalissimo Franco writing an unbiased opinion on the merits of Greek civil war.

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  6. Varoufakis: A disgrace for Greece! Imho in any country with a functional state Mr. V. would have faced the courts for dereliction of duty and willful damage to the public purse.

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    1. Instead of Varoufakis Mr. Andreas Georgiou has to face these charges for reporting the correct numbers. Greece seems to be a somewhat farcical and badly directed reality show.
      Urs

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    2. It would be very unlikely that V would ever beconvicted of such charges. Charges btw which would be perfect for the Samaras-Venizelos traitors who deserve public hanging or something more severe mixed with a lot of pain and suffering.

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    3. Funny I feel the same for Tsipras....

      Put G pap in there as well.

      V

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    4. V:

      That's o.k. by me because I never, ever vote for Syriza. I will vote for Varoufakis though now that I know for sure he won't be running with Syriza again. I have no ideological hang-ups. The best man gets my vote and I have not seen any present politician yet equal to Varoufakis. He is damaged goods but still the best. That's my read. And I am saying this because he is telling you the truth. Whether you can or can not capitalize on the truth, it's an entirely different matter.

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    5. Vote for that wet match? Come on Phoevos!!

      Best at what? Farting through his mouth. When he talks all i can picture me doing is sticking a toilet plunger on his face and pull. Maybe then i can unplug the crap stuck in his throat.

      I am veering to abstaining.
      V

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  7. @kleingut:

    I vividly remember the reaction of greek commentators over at the Guardian after Syriza came into power. They praised the Var to the skies and derided Dijsselbloem for his diploma from an agriculural university. How they yearned to be a fly on the wall when their hero would teach Schäuble et. al. economics. And when reality failed to conform with teir illusions (as reality usually does) they (as usual) breathed fire and brimstone.
    Very funny.

    Urs

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    1. o.k. Let's put then your unquestionable talent for making the correct observations about Greece to work and in a manner useful to us Greeks. This applies to Kleingut as well since he has been observing and writing about Greece for so long.

      Based on your familiarity with Greece, Greek commentators and the like here is the question you have to answer:

      Sometime soon (as soon as next week) undeserving Greece will return to the markets with the issuance of a 5 year bond in the amount of 3 Billion euros to replace an expiring 3yr bond issue by Samaras (the so called success story) as well as rollover a similar 5 year bond issue by the Samaras genious which presently yields 4.95%.

      So your task is (based on your long record of correct observations nonetheless):

      1. predict the rate which Greece will achieve in the market today for its 5 year bond issuance.

      2. explain why germany and the master of economics Schauble strongly oppose Greece's return to the markets, a position that implies that Berlin would prefer to be the sole lender to Greece. Why is that?

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  8. And Adam Tooze continues...

    "The part of Varoufakis’s arsenal that did become common knowledge was the secret plan to prepare a new currency system that would replace the Euro if it came to a “rupture”. This earned him accusations of treachery. But the parallel currency plan was really just a measure of self-defense and functional necessity. The far more dangerous weapon, was the one that Varoufakis proposed to direct against the ECB.

    The ECB was key because it controlled the funding of the Greek banks. The banks were the core of the Greek oligarchy but they were also functionally essential for Greek economy and society. The ECB could shut them down. It would act through its local representative, the head of the Greek national bank Stournaras. Varoufakis is convinced that even as New Democracy’s grip on power waned in 2014, a holding position was being prepared involving the insertion of Stournaras as the conservative head of the Greek central bank, where he remains today. But the ECB’s lock grip went beyond control over the Greek banking system. It extended to the Euro area as a whole.

    Three days before Syriza was elected in January 2015 Draghi announced a new policy of Quantitative Easing for the Eurozone. This was a measure of last resort against deflation in the Eurozone. But as a side effect it fundamentally altered the balance in the battle with Syriza. By buying the bonds of the other “peripheral” Eurozone countries, the ECB stabilized their debt markets and immunized them against contagion from Greece. QE had been hugely unpopular with conservatives and most notably in Germany. But it was behind the shield of Draghi’s QE that they were able to lay siege to Athens without fear of greater destabilization. They could prioritize the fight against political contagion without having to worry about the financial kind.

    How could the Syriza government respond? Was there any way of piercing the QE shield? Greece was not included in the buying program. It could not stop Draghi. The response that Varoufakis’s devised was truly Machiavellian. The Greeks should exploit the divisions amongst their opponents. In particular they should drive a wedge between Draghi, who was trying to make the Eurozone work, and the German conservatives who both opposed QE and wanted to drive Greece out. When bond buying was proposed Draghi had faced legal challenges in Germany. The German constitutional court in February 2014 had referred the case to the European Court of Justice, which had given Draghi a waiver, but on conditions. The way for Greece to blow QE up was to trigger those conditions. What Varoufakis proposed was that Athens should default unilaterally on the Greek bonds that the ECB had purchased in 2010 and 2011 and that the ECB still held. They had not been written down like the rest in 2012. They were under Greek law. Their face value was c. $ 33 bn. If Greece imposed a haircut on those bonds, it would inflict a painful loss on the ECB. That would force it to reevaluate its entire portfolio of Eurozone sovereign bonds and it would throw the door open to a new legal challenge against QE from the right-wing in Germany. Greece would throw a spanner in the works.

    Oddly, as far as I can see, none of the reviews to date have noted the significance of this extraordinary plan. Of course, people worried at the time about a disorderly Grexit. But the discussion was couched in terms of general contagion, of which there was in fact little risk, so long as bond buying continued. I have read pretty widely in the newspaper coverage of the period, but I have seen no references to any targeted attack on the political and legal underpinnings of Draghi’s QE. Paul Mason, who was close to Varoufakis and Syriza, referred to the basic idea in one of his reports as the “nuclear button”. But he did not spell out its implications for the wider Eurozone or the way in which it was directed at sabotaging QE. If anyone can point me to references to this plan, I would be most grateful."

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  9. And Adam Tooze concludes:

    "In any case, it was ingenious. It was potentially very powerful. It refutes the idea that Varoufakis was naïve. The revelation of this “Greek deterrent” seemed almost too convenient, too precisely calculated to rebut the main criticism leveled at Varoufakis. Was it a retrospective construction? Varoufakis tells us that he warned both Coeuré and Draghi about this plan and both reacted with alarm. I have made enquiries with well-informed sources close to Varoufakis and they confirmed to me that Varoufakis did indeed have the “legal authority” to default on the Greek bonds held by the ECB. “(T)he order was drafted”, but the faction within the Tsipras cabinet that wanted to avoid a break was too strong. Varoufakis was never allowed to make the critical threat at the right moment. Greece was driven to a humiliating compromise without ever having deployed its deterrent.

    It was a dramatic plan. But what is striking is that Varoufakis nowhere discusses the likely repercussions of his strategy for the other stressed peripheral borrowers. As far as Portugal, Spain and Italy were concerned the Greek threat carried very real risks. Indeed, the entire point of Varoufakis’s proposal would have been to put them in jeopardy, thereby forcing Draghi and the Germans to back off. How this would have worked out politically, what consequences it might have had for the left in Portugal and Spain, are not questions that Varoufakis takes up.

    Mason’s talk of the nuclear option is not wrong. But given Greece’s subordinate position, the threat would seem to be more akin to a “dirty bomb” than an ICBM. Varoufakis was proposing a way to unhinge QE from within, of heightening the political and legal contradictions within the Eurozone. Though the Tsipras government shrank from exercising the option, Varoufakis’s proposal lays out an escalatory logic internal to the Eurozone crisis, by which the politicization of economic policy might take on ever more radical, comprehensive and transnational forms."

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  10. My first contact with Varoufakis was in June 2011. I had come across the "Modest Proposal" which I thought was a most original proposal, even though it was essentially a transfer proposal without calling it such.

    To summarize Varoufakis' ideas, the following analogy will serve: when the German state of Mecklenburg-Vorpommern becomes completely uncompetitive and cannot survive on its own (which is the case), no German would ever think of forcing M-V into a new currency or to even leave the German union. Instead, there is funding from the wealthier states without any Troika and/or memoranda. Varoufakis' unwavering thought is that the Eurozone should act accordingly with its member states.

    My exchanges with Varoufakis via his blog and/or email were frequent and, in the weeks prior to the election, extremely intensive. Certainly from my side I thought it was friendship and perhaps from his side, too.

    Looking back, I see two Yanis Varoufakis': on one hand, the Varoufakis before becoming Finance Minister and, on the other, the Finance Minister Varoufakis. The former I respected and cared for, the latter I broke contact with.

    For a while, I saw Varoufakis as a kind of nascent Keynes: supreme eloquence in written/spoken English, extremely intelligent, charismatic, provocative in the good way, somewhat ahead of his time with his thinking. I completely changed my mind after Varoufakis became Finance Minister.

    Here is the difference between Keynes and Varoufakis: even though Keynes ticked off many people with his intellectual arrogance, he was still highly regarded by just about everyone in politics, academia, etc. Keynes in Bretton Woods was like an emperor holding court, and all came to pay their respects. Varoufakis, on the other hand, alienated just about everybody who did not immediately agree with him and/or admire him.

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    1. Be careful what you are saying. In essence, you are drawn to an affable/impotent Varoufakis as a nobody expressing interesting views and you are deeply opposed to a powerful Varoufakis that could do some real damage to the Beast of Berlin. To me, this shows internal conflict not to mention hypocrisy.

      My stance on Varoufakis is much simpler. Even though his ideology is opposite mine in many respects, I would not hesitate to vote for him because he is precisely the type we need to move Greece forward. He is neither arrogant or ego-oversized as his enemies want to portray him. He is a leader and much ahead of his time.

      He is also a product of the tension between a leftist father and a conservative mother, opting for his father's side. His Waterloo moment came when he chose Tsipras as a companion and the malformed Left we call Syriza. They didn't deserve him and in fact as is very typical of gifted men they came to resent him for his sophistication which they will never have. V is an international persona and Syriza is deeply local and thus boorish not to mention scared deeply with an inferiority complex making them uncomfortable outside Greece. And they are the ones who in the end betrayed Varoufakis.Too bad that Yanis is a bleeding heart leftist and not a kick-ass conservative to make Berlin tremble.

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    2. And he alienated himself to most. Why the media still call and request his opinion is beyond me. Why people still pay him to speak is beyond me.

      He was a huge failure. blah blah and no results. actually negative results. So negative that his results would disprove the mathematical logic of absolute value.

      V

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    3. If you want to get to know the true Varoufakis, read his letter to Tsipras below. I happened to get a copy of this letter from a traitor inside the Varoufakis camp.

      http://klauskastner.blogspot.co.at/2015/07/to-alexis-from-yanis-subject-thank-you.html

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  11. Kleingut:

    I am sorry for my mistake. I forgot about this authentic letter from Yanis to Alexis which is now in permanent display at the Library of Congress (it's nicely framed and stands right next to the Bill of Rights).

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  12. A transfer proposal without calling it such is not economy, it's a scam. he was later attempting several types of that form of financial engineering, a con artist. You (Schauble) and I, we can con the Europeans to think they are not losing money and we are not breaking any rules when we transfer money to Greece. His problem was that he had nothing to offer, in a tripartite scam like that two parties have to win in order to agree to cheat the third one, similar scams were offered by Syriza all over Europe and the world, and again, Greece had nothing to offer.

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  13. I don't really wanna defend Varoufakis but three times the ECB has threatened member-states with cutting off liquidity: one with Ireland, one with Cyprus, and one with Greece.

    That's no way to run a monetary union.

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