Saturday, February 21, 2015

Greece versus Eurogroup: "This Thing Ain't Over Till It's Over!"

I used to think that a successful negotiation is one where BOTH sides can walk away declaring themselves as winners and that the worst thing would be for one side to declare the other side as losers. Now it seems that both sides in the recent negotiations opted for the worst thing.

Finance Minister Schäuble made the rather cynical comment in his press conference that 'he was looking forward to seeing how the Greek government would sell the agreement to its supporters' and Finance Minister Varoufakis had the good grace of calling the Eurogroup 'mostly good lawyers trying to fix macro-economic variables they don't understand'.

The key next step is the list of reforms which the Greek government must submit by next Monday and which has to be reviewed by the IMF for approval. Naive people might expect that all discussions of learned people would now focus on the question of what appropriate and effective reforms should be on that list. Meaningful reforms which would also be seen by Greeks as meaningful. Instead, all the learned people seem to discuss only one subject: who was the winner in the negotiations and why?

The Greeks have demonstrated that they first want to win a battle before they focus on solutions. To simply agree on something without a battle does not seem to be the Greek way. The EU (particularly the Germans) has demonstrated that defending the bridge is the most important thing even though it might be a bridge to nowhere.

Let's remember what Yogi Berra said: "This thing ain't over till it's over!"


  1. Quoting from this post: "The Greeks have demonstrated that they first want to win a battle before they focus on solutions. To simply agree on something without a battle does not seem to be the Greek way."

    This is why Schäuble said what he said, and what you, Herr Kastner, categorizes as cynical: I consider it as normal to react like this after all what happened and what has been said with humiliating words via Tspiras and Varoufakis, also into the direction of Schäuble, Germany and Merkel; I consider it as realistic because indeed, HOW will this be explained to the Greeks, who started to believe the illusive dreams of those who govern the country now?

    I do not add any comment about Varoufakes within this subject because I lost my complete trust in this man's good intentions.
    Leaks do not start by coincidence, and I consider it as true what I read yesterday:

    I consider him as the Trojan Horse within the Greek Government, and via that in the Eurogroup. So, yes, I am happy that Schäuble identified him, by reading his letter and proposals, with thank God some intelligent brains. Too many journalists are influenced by Varoufakes charm, that obviously work like the mythological Sirens.

  2. I interpret Schaeuble's comment as being malicious, rather than merely cynical. Other than that,I agree with your analysis, Klaus.

    1. Naturally as he is German, he has to be evil!

    2. No, that is not the reasoning. For example, I do not have such an opinion of Merkel, even when I disagree with her policies and opinions.

      I interpret all of your posts here as being instrumental -- that is, something other than the personal posts of an individual.

    3. Schäuble is very direct and brusque - even for German means!
      And the common German communication style is famous and dreaded for a directness und "no frills" attitude that counts as rude in most other Countries, even Austria included.
      Schäuble is the contrary of the charming politician, promising everyone what he likes to hear. Instead he is more a guy sometimes using kinds of scientific style of cold, blunt analyis, regardless of any consequences.

      Having said that I do not suppose that Schäuble meant to be cynical or malicious. He simply has a reduced trust in greek gouvermental promises and he was wearing his heart on the sleeves.
      I do not believe he is evil in a cynical or even malicious, antieuropean way. He is often described as the most pro-european guy by conviction in the German government, where all members are quite pro-european. In the last years in Germany he publicly stood up for helping payments for Greece, when other politicians were short of entering the populistic wave of "let the Greeks go bust".

      There is a saying about a region in Germany that their humor is quite unknown for others, because they hide it from others to prevent misunderstandigs. What is humor for them could be a casus belli for other cultures. Schäubles comments pass in that category, sounding much more violating than meant to be.

    4. If Schaeuble is so direct and straightforward, then he should be able to accept the direct and straightforward approach (albeit in different style) that Varoufakis uses. It seems instead that he expects everyone less to be polite and deferential while he is a rude ignoramus.

      This is a typical socio-psychological trick -- developing asymmetrical social relationships that disadvantage others. He is aided in that by being in a wheelchair, which also puts others at a psychological disadvantage.

      Greeks are well-used to such games, as they are more commonplace in the former Ottoman region than in northern Europe. They also know how to deal with them. I was shocked when I settled in Greece at how much I learned about the behaviour of people (especially my family) in the UK, simply by learning about such tricks in Greece. Most Europeans are naive and open to manipulation by politicians: Germans seem to be particularly gullible.

  3. Naive people like me once more got a hard lesson to digest:

    Political decisions some time do NOT depend on valid arguments!


    PS: But the proof is not yet given that there is one more free lunch to the Greek government.

  4. Wow. :-)

    We just witnessed a rape. Where are the guys that claimed that Tsipras is good at blackmailing and Varoufakis will get us a good deal. These guys are amateurs that never negotiated in their lives, even for their salaries since they all work for the government, so how can you expect something close to 50-50 resolution.

    As for Schauble's comments, I would consider them malicious but someone has to tell the Greek people the truth. Apparently, that someone is not the politicians. I would feel bad for Syriza, because apparently the are not that intelligent -albeit very arrogant and condescending- but consciously or not they are on a mission to destroy of what is left of this country.

    I foresee more drama on Monday. Apparently the wonder kid is not that good with excel. Maybe with a few more lectures he will get Schauble to commit suicide.


  5. Forgive me if I'm mistaken but I think you are quoting the Greek fin min out of context; if you're referring to his interview after the eurogroup meeting yesterday, that phrase was used when answering a question about the number of the primary surplus that should be achieved.

    If I remember correctly-and I'm paraphrasing here-the fin min replied to the journalist's question that he could not give a reliable number, because budget deficits depend in turn on current account deficits and national savings/investments.

    Also, reaching an agreement on any subject, usually requires putting forward arguments, not ultimatums and definitely either side not exerting coercive force towards the other party because then-let's face it-that is no longer arguing but blackmailing.

    You are right though that nothing's over yet

    1. Below is my source:

      A Evans-PritchardVerified account ‏@AmbroseEP
      Best line from @yanisvaroufakis Eurogroup mostly lawyers trying to fix rules for macro-economic variables they don't understand. Tragic

      AEP is not known for misquoting people. What disturbs me is that AEP, the very serious and professional analyst, considers such a supremely arrogant and offfending phrase as a "best line". That's like turning traditional behavioral standards upside down.

    2. I'm sorry Klaus, but I agree completely with AEP -- as do most professional economists. The Eurogroup is a bunch of useless bureaucrats, carrying out political manouevres and calling them economic policy.

    3. You misunderstood. This is not what AEP said. Instead, he quote what Varoufakis said. You and AEP may share the opinion that the Eurogroup is a bunch of useless bureaucrats but here one member of the Eurogroup says that about his 18 other colleagues. Is it really so difficult to understand that to say something like that about your colleagues destroys not your colleagues' but your own credibility, instead???

    4. Ah, I see what you mean. That Varoufakis should not speak the truth in public now that he is a politician.

      I am not sure that you are right. He said this after 2 weeks of ridiculous nonsense from the Eurogroup which had nothing to do with economic management and everything to do with hegemonic power and bureaucratic rules.

      However, the proof of the pudding is in the eating. So far, Syriza seem to have managed to get further than Samaras or Papandreou did with these idiots. History will be the judge.

    5. I seem to recall that you once told us that your professional activities were always of a self-employed nature (instead of being an employee in larger social systems). That could explain your reaction.

      If you are a member of a social system, of a group, you learn automatically that it is not prudent to elevate yourself above others, to make yourself the judge of others on the same level, etc. For the simple reason that such an attitude will eventually render you totally ineffective. You may win a prize for your acitivies but you fail to reach results.

      Your dialectic is cute; it's the dialectic of demagogues (sorry for that expression). You throw out an assumption based on which your conclusion seems correct. You throw out the assumption that I think Varoufakis should not speak the truth as a politician and you - rightfully - criticize me for that assumption. And 9 out of 10 readers will never question whether that was really my assumption.

      No, that was not my assumption. Instead, my assumption - or rather my premise - was and is that one should aim at reaching acceptable results instead of falling in love with one's activities. And one normally does not reach results in a group when was has offended the entire group.

    6. I did realise that that was also an assumption. My reaction to it is this: when one is in an institutional environment where the mainstream is completely deluded (and I have several times been in such an environment) the act of politely conforming has minimal or zero effect on the direction of the institution.

      Your position is valid where the institution is roughly going in the right direction, and maybe needs some adjustment. I do not think that that is the case here.

      At a personal experience level, two university departments where I worked were in precisely this situation of going in entirely the wrong direction. I walked out of both, and both were closed by the universities several years later for gross incompetence and mismanagement. Before walking out, I tried first of all to reason in a collegial fashion and subsequently to denounce them (as Varoufakis has done). In the end, nothing works other than the complete destruction of incompetent institutions: that is a clear reason why Syriza is correct to aim at destruction of the Troika.

  6. This Thing Ain't Over, regarding moral hazard:
    In Cypria several parties demand a renegotiation with Eurozone, as they think Greece got a much easier package to carry:
    If that demand will get louder in Cypria and other countries, the northern countries will enter a much harder negotiation position also toward than they do now, as they fear otherwise an opening of the Box of Pandora.


    If these are the "reforms" that Syriza is going to present the Eurogroup then the extension is dead in the water.

    I'm speechless. Either Syriza is trolling the Eurogroup, or I don't know what. These reforms are pretty much Syriza's pre-election campain.

    All I see is increased expenses, plus a bunch of half-baked and vague promises. The Europeans are never gonna agree on this.

    1. No government has the capacity to prepare detailed proposals with costings for its total economy in just two days. if the Eurogroup actually expected such, then they are a bigger bunch of wankers than anyone could imagine. Quite what to make of your comment I don't know, but it looks as if you want to place yourself in the same category as the Eurogroup.

    2. The clowns from Syriza and Anel have been quick to learn the tricks from Samaras and previous governments. Offer some "reforms" in the form of vague promises ("crack down on tax evasion" "combat illegal trading in oil and tobacco" ...), the same old promises former governments have been giving, and which led to nothing. Just wishful thinking and smoke screens.

      If the Eurogroup actually accepts these "reforms", the tax payers in other Euro countries have been fooled around with once again.

    3. The clowns in Germany -- slow as they are -- have learned their tricks in propaganda from Joseph Goebbels. It's about time that the European Union clamped down on abuse of the internet by government agents.

    4. Xenos, spare us. Put your money where your mouth is (in a Greek bank that is) and then you can come and lecture us on Syriza's politics. Otherwise your opinion can't be taken seriously.

      Syriza should have been prepared. It had all the time in the world. After all, it instigated early elections by not voting for a president.

      Thankfully the ECB won't leave any room for manoeuvre for it's government by ordering the banks not to participate in t-bills auctions. This will quickly dim Syriza's appetite for expenses, and orientate it's policies to tax collection instead. As for value creation, that doesn't feature in Syriza's books.

    5. @Jim: last week I posted some money into my Greek bank account. Satisfied?

      And I dispute everything that you have written above.

      Moreover, the ECB has statutory legal obligations, of which its paramount duty is to protect the entire eurozone -- not merely the parts that some people approve of. Failure to do so would render its employees open to legal action for breaching the EU treaties.

  8. We've seen it all before:

    Let's see what Papandreou said in 2010:

    "Greece promises to crack down on tax evaders"

    PM promises to 'put house in order'

    Socialist Prime Minister George Papandreou ... promises to stamp out political corruption and boost government transparency

    Or Samaras in 2012:
    Samaras vows to fight Greek corruption

    Samaras promises to cut down on bureaucracy and tax evasion

    1. Maybe your hysterical feeling of deja-vu is a clinical condition, for which there is a suitable medication?

  9. Varoufakis behavior is not so strange if you look at his background. He has reached the mature age of 53 without any experience of politics or business, he has therefore never had to reach a deal or compromise. He has spend his time being lectured or lecturing students, whose papers and tests he was also grading. One could argue that these are social competences that one master long before ones working life begin, but that depends on the environment you grow up in, and your personality.

    1. OK. An alternative reading is that he deals with reality, as he perceives it, rather than participating in the corruption and wheeling-dealing of politics and business.

      Many citizens prefer the honesty of such people, and despise politicians and businessmen; this view has increased since the banking crisis and the exposure of the criminality of bankers and politicians across the world.

      So, your (and Kalus's) ideas of social conformity are rather rooted in conservatism -- in not challenging the system. When the system has failed, and is openly corrupt, those views are out of date and irrelevant.

    2. Have a look!. This is really cool:

  10. @Guest
    Yes, the possibility exist that Varoufakis has his own perception of reality, the other possibility is that he tell the Greek citizens what they want to hear. In both cases it is no surprise that the citizens perceive that as honesty, he confirm their belief that "it is the others fault, they must solve our problems" and "no compromise". As workable concepts both cases have a common flaw, the other xxx million Europeans don't share their perception of reality.

    1. Unfortunately, all perceptions of reality are flawed. Some more seriously than others, of course. I do not have the opinion that the popular German perception of reality is more correct than Varoufakis's: on the contrary, I see it as the result of sustained government and other propaganda.

  11. @ Guest
    My point this time was not if Varoufakis was right or wrong, rather that you won't get far if you are just "against" the rest of your world. Figures like Goetz von Berlichingen and Don Quixote may well have been right, but did not leave any imprint on the future.