Monday, March 16, 2015

Wolfgang Münchau on FinMin Yanis Varoufakis

This column by Wolfgang Münchau in SpiegelOnline totally surprised me, to say the least. I believe Münchau first met Varoufakis at the INET Conference in Berlin in April 2012 where Münchau headed a panel on "The Future of Europe" where Varoufakis was one of the speakers (George Soros was on the same panel). Incidentally, this is where Varoufakis introduced himself famously as follows: "Until this crisis erupted 2 years ago, I used to be a fairly decent, second-rate economist".

I remember Münchau's positive writings about Varoufakis right up to election time and even during the first weeks thereafter. Both clearly seemed to be comrades in thought.

Something happened since then and today's column by Münchau concludes with the following assessment:

"I always thought that Varoufakis' job was to win sympathies for Greece which it certainly would need in case of a Grexit. Owing to his clumsy diplomacy, he has contributed to the situation where Greece is politically isolated within the Eurozone. He has accomplished that it is now not Germany which stands as the perpetrator of a Grexit but, instead, Greece itself".

My advice to FinMin Varoufakis: Call up Wolfgang Münchau and ask for his advice how to move forward.


  1. Would you please explain the basis/reasoning ofyour proposal?
    Do you believe varoufakis is in need of guidance forward because he has lost control?
    Do you believe munchau has been playing an active role so far or he is in position to bring something to the table?
    How can a journalist even with his status advise the fin min of a country under a purely political nefotiation?
    Are you aware of finmin schaeuble having as advisors ft journalists ? Is this something other leaders do?
    What would your advise be as an old friend and follower of prof varoufakis and greece

    1. Below is the advice which I gave FinMin Varoufakis, at his request, on January 27, his first day in office:

      "Repay all debt over 60% with a new bond with a minimum maturity of 50 years, a rate adjustable to a very low base so that the real cost of interest is close to zero (or zero) and an interest moratorium for 20 years. Close the deal ASAP and get on to work on all the other things which are much more important for Greece’s (and SYRIZA’s!) future than a haircut which will be followed by another haircut in the future. The key is to REGULARIZE the debt issue so that it doesn’t pop up every few months and distracts from real work".

      In retrospect, that clearly would have been the secret.

    2. Mr. Kastner,

      I understand this point you are making but from what i read in all media, watched media, papered media, the EU is not prepraed or willing to go along with such an agreement. They have repeatedly stated "No haircut of debt of no kind." Your refinancing of debt solution is also included in what troika is saying. Your suggesting something they alreay are openingly rejecting. Am i wrong?



  2. Dear Her Kastner,

    It is clear to everybody, everywhere, that this FinMin Varoufakis is not the right person on the right spot.
    Nobody, I am really convinced about it, has still a wish to advice him, for not anything, than to resign.

    Herr Kastner, you are probably the last one who still believes that Varoufakis would listen to an advice, at least, you write from out of the view that Varoufakis is still on the spot as a FinMin and he does not belong on that spot.
    He is not capable.
    When collecting all impressions and information about him then there are serious signs of narcissism and pathological lying. The only advice I have for him is: to resign. I consider him as dangerous within the utterly serious situation Greece is in now.

    Your advice, and I do believe in your insights about economy etc., is for a person who is really reliable. In times of turbulence it is extremely important that a people can count on politicians who are absolutely stable, who prove to have ethics, respect, and who prove to be fully aware of the seriousness of the situation, who are therefore willing to listen to your or any advice.

    Varoufakis becomes aware afterwards, when it is too late and the damage is already complete.

    1. In one of his articles, Mr Varoufakis described himself as an "erratic marxist". I don't know whether he is a marxist, but he certainly is rather erratic: Sometimes he says Greece will pay back its debt, sometimes he says Greece will not pay it back. He called himself the finance minister of a bankrupt country, but quite recently he said there was only a minor liquidity problem. When, in a German television show, he was confronted with a video of a conference where he made an obscene gesture with relation to the German government, he claimed vigorously that it was a fake and that his host must have known it was a fake; the next day he posts the link on twitter to a video which shows exactly this sequence.