Monday, July 6, 2015

To: Alexis. From: Yanis. Subject: Thank you!

Dear Alexis,

I owe you thanks from the bottom of my heart! In the last couple of years, you have given me the opportunity to teach you how the Eurozone works (or does not work) and you have been an outstanding student! But more than anything else: I have to thank you for appointing me as your Finance Minister. This has been, and will continue to be even more so in the future, a catapult for my career (and, I should add, for my income!).

It's hard to remember that only 5 years ago I was a fairly unknown university professor. Not even a trained economist, as I have had to point out on many occasions. As I introduced myself at the INET Conference in Berlin back in April 2012: "Until this crisis erupted, I used to be a fairly decent second rate economist. The implosion of my country bestowed upon me the dubious honor and title of being a first class Greek economist." Frankly, I had expected a big laugh from the audience but it didn't come. That was probably due to the fact that I was quite tense, if not so say nervous. After all, that had been my first truly international appearance and George Soros was sitting on the podium with me (or rather: I sat with him). So I didn't come across at my best and instead of the expected standing ovation, I only got polite applause.

It's not only you, though, Alexis, that I have to thank but also previous Greek governments for having pursued policies which would make the country implode. Had these governments not been so incompetent, I might still be considered a decent, second-rate economist, but no more.

I discovered quite a few things about myself in the last 5 years. I had always been very popular with my students but those were rather small groups. Through twitter, I noticed my remarkable ability to build up a following. Those were the days when I was proud to have crossed the level of 10.000 followers. As the crisis dragged out, my following increased to 70.000. But I owe it to you and your appointing me as your Finance Minister that my following now exceeds half a million. And you know something? Most of my followers are truly followers, almost in the biblical sense. I feel that I can move their minds and spirits.

And then I discovered my talent for handling the media. That was a total surprise to me because, as you know, the Greek media had more or less ignored me for quite a long time. I guess they considered me a smart alleck; someone who thought he was smarter than they (which, honestly, I thought I was and still am). But then I discovered my talent for dealing with international media. That was no easy feat because, in the beginning, I was not so sure of myself.

When I look at a replay of the "60 Minutes" program which Mike Wallace had done on Greece and in which I played a major role, I am almost embarrassed. I was still far too inexperienced then to come across as the type which the media love. In fact, I came across in a rather subservient and conformist manner. But I learned quickly. Soon I discovered that the media, particularly the Anglo-Saxon media, love nothing better than quotable quotes, particularly when they are pronounced with supreme self-confidence. And I was good with quotable quotes and with acting with supreme self-confidence. It really doesn't matter whether one provokes or alienates; in fact, had I not always provoked and alienated, I might not be as well known as I am today. Part of the audience may crucify you but there is always the other part which will celebrate you.

I have had so many wonderful quotes that it's hard for me to pick the best. But one of my favorites is the quote I gave the Huffington Post: "You have to be prepared to blow the whole thing up!" That certainly got me (and Greece!) the world's attention. And when I then told the NYT that "We don't want the 7 billion!", people got the message that I meant business. From then on it was like a home run.

You know the thing which worried me the most? I worried that people would read everything I had written and said, particularly in my blog, since the outbreak of the crisis because then they would have understood the strategy which I have recommended most consistently. You yourself were originally doubtful about this strategy but, thankfully, you eventually came around to making it your own strategy. And that strategy was: default but insist on staying in the Eurozone in order to keep the financial lifeline and, above all, not do ANYTHING which could be interpreted as Greece's having actually opted for default. We always said that we would have to draw the socalled negotiations out as long as possible in order to increase the cost of a default to our partners. As I had literally guaranteed you, the ECB did not cut the lifeline for our banks until the very, very last moment and our partners are now beginning to realize that they increased their Greek exposure phenomenally during the last months so that Greeks could rescue their savings. While they haggled about 7,2 BEUR, we took from them over 40 BEUR through the back door. In all modesty, that was no small feat!

Alexis, you and I have come a long way and we truly lived up to the the proud examples which our spiritual forefathers left for us. They have influenced world history before. The Dekemvriana brought down the East-West alliance and made Greece the place where the Cold War began. The Polytechneion brought down the dictatorship. And now we, little but proud Greece, stood up against the undemocratic EU elites. If that ends up bringing down the EU, so be it!

You know, Alexis, I have often wondered whether John Maynard Keynes would have become the economic giant that he was if he had not been appointed the financial representative for the UK Treasury to the Versailles Peace Conference back in 1919. The world's best actor will not succeed if he is not given a stage. You, Alexis, have given me that stage and I will be grateful for that forever. In all modesty, I think I lived up to historical challenge very well. Just like Keynes, I discovered that the most powerful weapon is the written and spoken word when it is based on intellect. Just like Keynes, I discovered that charmismatic eloquence, combined with a high degree of provocation and non-conventionalism, will attract followers in great numbers. Just like Keynes, I discovered that non-convential conduct and private life are fertile ground for legend building.

I am now in a position to reward you for everything you have done for me, Alexis. I have hours' worth of tape recordings which will allow me to write many books. In fact, I got this idea from Tim Geithner's book except that Geithner was only quoting from memory and scribbled notes. I have full-blown recordings with all the facts. The only thing I have not yet decided is the timing of my future publications. I do not intend to put everything out there at once. Instead, I will time my publications in such a way that they keep the flame burning for a long time. Alexis, I promise you, I will make everything possible to make sure that the flame, your and my flame, keeps burning for a very, very long time. You have made me a famous person. I will make sure that you enter the history books like the hero that you have been and still are. In this round, I assure you that we will come out as the winners. 

I was once asked privately whether today's domestic conflict was perhaps something like the long-term consequence of our Civil War, and I responded: "The Civil War is in us, deeply embedded in our cultural and spiritual DNA." You know better than anyone else what I meant, and that I was and am right in my assessment. It was you, Alexis, who made it possible that we could and can play out this conflict in a peaceful way, and when the other side is not supplied with the weapons of foreigners, be they military or financial, then they cannot persevere. We, on the other hand, can; yes we can!

Let me close with the words of a politician whose policies I detested but whose ability to communicate I admired. President Ronald Reagan. As I leave the position of Finance Minister, I will borrow words from Reagan's farewell speech and tell you the following: "My friend, you and I - WE DID IT! We weren't just marking time. WE MADE A DIFFERENCE!"

With the utmost of gratitude and admiration,




  1. Reagan was the first who was guilty for much bad things ...

    1. Yeah, Reagan was one of those assholes gifted to mankind who spread the problems rather than to solve them.....

  2. WOW! Who's gonna make the movie?

    1. Kastner, the famous story writer, might become the screen writer...


  3. What is the source of, "To: Alexis. From: Yanis. Subject: Thank you!" you posted?

  4. this is not Yanis

  5. WOW Yanis, you lit the fuse. On the way to the air shelter you even managed to canonize yourself. You will have lots of Greek boys named after you, with your own nameday (one n please).

    1. Have you thought of changing your name to Lenard?

  6. It is only consequential.
    As he thinks and says the european partners are terrorists, he can not lead negotiations with them. An they can not negotiate with him.
    You don't negotiate with terrorists, neither with people calling you so.
    No doubt he will give the blame to the bad bad foreignors, not to his own ability to burn bridges.

    Nevertheless I wish his successor will concentrate more on programms that are GOOD for Greeks, and not only on cursing allegedly devilish from Europe.
    May it be with a new currency or still inside the Eurozone, much work has to be done.

    1. According to my dictionary, "terrorize" means: to deliberately frighten people by threatening to harm them, especially so they will do what you want.

      Varoufakis obviously meant it that way (and, of course, he was 100% right).

    2. Indeed, Yanis was and remains 100% right. But you know? one man's terrorist is another's freedom fighter. The Germans and their northern European cheerleaders have managed to convince themselves that their terrorist acts are perfectly reasonable, perfectly justified, and the problem is only the useless and lazy Greeks who refuse to return the money they took.

      When entire nations swallow and regurgitate propaganda, then is the time we have trouble. That trouble, in the past, always led to war. I imagine that it will be no different this time. And like the last few times, it will be the same people (culturally speaking) who will cause the problem.

    3. Hmm, which nation swallowed propaganda?

      I remind a promise of Yanis that he has an offer from Europe that he will sign within 24 hours after referendum. Time is gone, offer did not show up. Big surprise. 100% is something else I suppose.

      Same with the promise from Tsipras that the referendum will not mean Grexit but strenghten the Greek position inside Eurogroup. The result of the referendum seems to be:
      "According to sources in Brussels, 16 of the other 18 countries in the eurozone are in favor of letting Greece leave the eurozone and they will have to weigh up the cost of any agreement to keep Athens in the single currency."

      I am curious what Syriza can and want offer to persuade these 16 sceptical countries it is worth to pay Greece again to help it remaining inside Euro-Group.

      But no doubt, with a new currency Greece will have a future as well. Same with Europe. Both sides will have losses but at least they finish a increasingly blocked conflict. That is far from a perfect way, but perhaps the better of two bad ways.

    4. @Roger: I have already expressed my disappointment with the last days in power of Yanis. As for the promise of Tsipras about the referendum: it is half true, and half false -- a paradox. That is standard fare for all politicians.

  7. We used to make pranks like this when I was a youngster, throw a stink bomb before you left the library. But then I was only 9 years old.

  8. This move was quite necessary, if there should happen any new negotiations with Eurozone..
    If you have any dignity, you cant publicly call people terrorists and afterwards negotiate with them.
    And if you have any dignity you cant let someone call you terrorist and afterwards negotiate with him.

    But I am still sceptical Greece gets more out of new negotiations than out of the old ones. So I hope they already prepare anew currency as an alternative track.

  9. As one of the rare Greek's of the diaspora who cares as much about Greece and the Greek people (his second patrida) as I do about the New World in which I was born and developed, I have followed the developments in Greece and Europe during this recession with dogged devotion. Things seemed to go from bad to worse until, at last, Tsipras and you Mr.Varoufakis entered the picture - a breath of fresh air and a breath of hope for the suffering Greek people. And, like the Biblical David facing the giant Goliath, you delivered with your call for a referendum the necessay corrective element to the resolution of the impasse by a crucial lesson in European democracy. Bravo, sas syghairo kai sas aspazomai os t'adelfia pousasten, me megali ectimisi, Nikos Psilinakis.

  10. Great tribute - and penned so quickly - you thought there might have been a yes vote - surely?

    Here is the crucial bit:

    "As I had literally guaranteed you, the ECB did not cut the lifeline for our banks until the very, very last moment and our partners are now beginning to realize that they increased their Greek exposure phenomenally during the last months so that Greeks could rescue their savings. While they haggled about 7,2 BEUR, we took from them over 40 BEUR through the back door. In all modesty, that was no small feat!"

    I personally think, rather than resign, he should have made it more explicit.

    V should last night have said:

    "On Monday we will strive to get an agreement with the Troika, within the next 24 hours. If not we will introduce a new currency.

    In any case we will open all the banks on Tuesday, and we ask all Greeks to transfer their funds, in their Greek bank accounts, which belong to them, to bank accounts abroad. They can send them to their friends' and relatives' accounts, we have a common market, the Greeks are solvent, our banks are solvent, and capital must be allowed to flow abroad.

    But we would still rather have an agreement."

    Greece would have had and agreement today, and he could still have resigned after that.

    Never mind - there is other good things he could have done - now up to his successor - who will hopefully have learned that getting the media behind you is crucial, especially if you have the better story.

    Some things to consider for his successor on my website, how about increasing 2% of GDP for the Greeks while decreasing the exposure to the Eurogroup:

  11. "And I shall wear the creditors’ loathing with pride.

    We of the Left know how to act collectively with no care for the privileges of office. "

  12. You will never understand anything because you are immune to information.

    Too old too proud too rich (or you have enough money in your loved banks)

  13. Well, Mr. Kastner, there are many here (like myself) who only knew you as a commentator in Varoufakis’ blog before they discovered your own. So you could at least thank him for increasing your readership. Also, despite all your differences, he did offer you a job when he became a minister. (Yes, you didn't take it, but it was generous from him. Most in his position wouldn’t even bother to respond to your emails.) So I wonder why you are being so bitter to him. I mean, you have criticized other economists too (like Krugman), but with Varoufakis it feels much more personal.

    1. Yes, I agree. But I have also seen the same bitterness from our host when I have challenged him, or disregarded what one might call trivial bourgeois conventions. I would conclude that it is style rather than substance that is the issue here.

  14. it's a really bitter post that does not do justice to neither of the persons portrayed therein

  15. You need to grow the eff up. Your problem is that you think that kind of sophomoric satire is clever.

  16. Latvian solidarity proposal:
    Dear people of Greece!

    We, the pensioners, the doctors, the police officers, the teachers and your other ordinary fellow european citizens of Latvia are so delighted to hear that you demand european solidarity!

    We're sure that you'll be happy to discover, that you've finally found new allies - us! So let's change Europe together!

    The average pension in Greece is €800. The average pension in Latvia is €300. The Average salary in Greece is €820 Netto, the average salary in Latvia is €600 Netto. And by the way, Latvia is a northern country, we have a thing called 'heating season' here, when temperatures fall below -10°C, and utility bills rise by €150 a month.

    So, wouldn't it be wonderful, if you could kindly share 1/3 of your pensions, taxes and salaries with us? It's our democratic choice, so please respect it! We all want it. Alter all, we are one european family...

    Except that we never borrowed the money that we couldn't pay back to blackmail our creditors with suicide later, and to blame them for failed policies of our national government that we voted for. Our debt to GDP ratio doesn't exceed 40%. During the financial crisis, we managed to bail out our banks and to return to pre-crisis levels after 4 years of "Troika-imposed" austerity, that helped us complete important structural reforms and get our economy grow faster than anywhere in Europe! And guess what, before we joined the European Union and the Euro, we were much poorer than we are today, because after 50 years of eastern european '"solidarity" in the USSR we forgot what it means to be competitive. We forgot how to manufacture anything that could compete in a free market, but we've learned. We've learned that you shouldn't spend more than you earn. And if you need to borrow money, at least have the decency to admit that it's not a gift and should be returned. We never lied about our public debt when we joined the Euro, and we never had the need to unpeg our national currency from the euro, before or after we joined it.

    Get your act together. Have the decency to admit the mistakes of your democratically elected governments that they've been making for decades. Don't blame Europe for not giving you free cash (writing off the debt). Yes, it would have been better if some debt were written off, but it's not for the one who owes the debt to decide. And if you want your creditors to do more to help you - they will, if you'll respect them, if you'll recognize their free right to do so, and if you'll show the results and the political will to change Greece to make it competitive and growing again.

    Greece is Europe. Europe is Greece.

    1. Yes, a typical northern smartass comment. Let's get some basic facts sorted out. Here they are:
      (1) Latvia only recently was admitted to the Club of the EU. Its standard of living and its prices are explicitly related to its Communist history. Greece has been an EU member since 1981, and its economy developed as a result of that.
      (2) You cannot compare standards of living by talking about average wage levels. The cost of living is central, not the wage levels. It is necessary to measure economic outcomes, not cite crude data. The UNDP has been doing that since 1993.
      (3) The average wage is also an irrelevant statistics when there is high unemployment. Greece always had a poor employment ratio, and it is now a disaster. i do not know for Latvia, but I suppose it is not 27% unemployment and 52% youth unemployment.
      (4) Household income (standardised for different national costs of living) is therefore the correct measure, in terms of income levels. (It is still not an outcome, but is more accurate than crude average wage levels.
      (5) on top of this, the dispersion in household income (and wages( is central. Did you know that Greece, after the screw-up that the Troika has made in the last 5 years, now has massive income inequalities, possibly the worst in Europe? How did that happen? Why, the measures pushed onto Greece hit the poorest and had little impact on the rich.

      So, if you want to make comparisons, perhaps you should do a little research on what you are talkijng about. i have not looked at Latvia, so I am not going to make any comments. But it is clear that you know NOTHING about the situation in Greece, yet feel quite happy to post this uninformed political comment here, dressed up as economic analysis.

    2. To: AnonymousJuly 6, 2015 at 1:52 PM (My Latvian Friend)
      And To: Xenos

      From your point of you i can say that i do agree that nobody should be paying out to continue bailout funds to greece. As it falls on the shoulders of all people of Europe (Regardless of our problems). It was the 1st thing the Syriza government stated from the start is that we do not want anymore bailout money although we do need investment. Let us not forget though that the original bailout of greece was not to bailout greece but to bailout banks that greece owed. So the irresponsible lenders to irresponsible people was not broken there but was maticulously put on the public. Rather than negotiate a deal directly with the banks, Greece was given a bailout to payout private sector meanwhile shouldered the bill to the greek people which inturn every new bailout is weighed on all Europeans.

      This was and is wrong. And greeks on the most part do not want anymore bailouts which hurt the rest and even more, more poorer countries than Greece.

      Yes you are right that we were irresponsible and we have a failed infrasturcture and ineficient public sector. The crisis did help us to improve but we need further improvement.

      The referendum means nothing and mean everything. Sounds stupid but the truth be said saying "No" gives the strength and ability to any people to say "no". Even though saying "no" is illogical to europe, the "no" was not to europe but to the austerity or the creditors/preditors

      Should greece and its counterparts find an agreement the word austerity should be changed as it gives a negative conotation. It should be called measures of efficiencies and improvement for the future.

      I also ask you to take a look at Xenos comments as there are some truths there.


    3. to: Xenos, July 6, 7.44 pm
      Dear Xenos
      I love this sentence in your reply above:
      "So, if you want to make comparisons, perhaps you should do a little research on what you are talkijng about. i have not looked at Latvia,... "
      It's just great: You remind the commentator from Latvia to do a little research first, then lecture him on how wrong his statements are - and then you admit that you haven't done any research yourself!
      My comment: Even after the terrible mismanagement of the economic crisis in Greece due to mistakes made by the creditors of Greece - but not least by Greece itself - the purchasing power in Greece is still significantly higher than in e.g. Latvia.
      I guess even you can understand that solidarity is not a one-way-street. Greece is in a monetary union with a diverse group of countries. Some are richer than Greece - and some are poorer. Greece cannot just assume that there has to be "solidarity" from the others in the form that Greece has some sort of guarantee to have a living standard which is better than some of the other members, regardless of the policies that Greece pursues. I guess that is kind of clear, don't you think?
      Best regards

    4. @Martin (which is also my name): First of all, I did not make any comments about Latvia. Explicitly, I stated that I cannot without doing a lot of (unpaid) research, which i have no intention of doing.
      Secondly, if Latvia is in a worse position than Greece now (which I seriously doubt, unless the country is full of soup kitchens, unpaid rents for years, high taxes, failing hospitals and collapsing businesses), then it should not be in the euro either. It certainly should not be making a contribution to Greece or any other country.
      Thirdly, the concept of solidarity is not an issue of money and transfers. It is a political concept that is at the heart of the European project. If the Germans and French are making Latvia pay, the problem is with the germans and the french rather than with Greece. Of course, what is very possible is that Germany is using countries like Latvia not only to save itself money but also to create political opposition to Greece within the EU. Again, your complaint is with Germany -- and you are allowing yourselves to be exploited by the Germans.

  17. LOL, what it the source of this?
    Why is it written in English?
    Why can't I find a Greek version?
    Why does it not sounds like Varoufakis at all?
    Why should I believe this is legit?

  18. Amazing text - you really managed to make it sound as if it was written by Yanis...
    ...well done, Klaus!

  19. That was lame. You hit rock bottom, man. And I used to like you.

  20. Again, what is the source of, "To: Alexis. From: Yanis. Subject: Thank you!", you posted?

  21. What is the source of, "To: Alexis. From: Yanis. Subject: Thank you!", please?


  22. I consider this post to be malicious, I am sorry to say. It is really quite uncalled for, and says more about its real author than it does about its alleged author.

    1. Sorry for using similar words you did above, but this time it hits the nail:

      Your ramblings are typical Greek smartass comments!

      If you can't support this kind of satire, you should better leave this blog.


    2. Herr Trickler: I am not some random Greek that you can issue instructions to. So kindly desist, or if you cannot control your authoritaran impulses, maybe you should leave this blog.

  23. Very good post, Klaus! Sometimes satire is the most appropriate reaction.

  24. Mr. Kastner,

    I have a proposal which i have had in my mind for some time. I know the possibilities of seeing the light are slim but i want to put it out there.

    One of the problems of Greece that you are well aware of is the issuance of giving receipts of commercial and services sectors. It is a severe problem which i believe if tackled propely would help solve the stablization of the direct tax or VAT's issues once and for all. Rather than continuous hiking of the VAT every so often. Varoufakis properly stated it is not the VAT which is the problem but the tax collection of the VAT. You would agreed that it is a major income for the greek government which is having a great difficult time in checking the market respectively.

    Back in 2009 or 2010, Papacostandinou introduced the returns for receipts. A great system which put the people to collect receipts from all sectors of the greek commercial and services. It put the people and given incentives to the people to request receipts everywhere. Collecting receipts and giving respective returns to the tax payer on the annual tax return. The idea was very good but only partially. Actually it failed quite bad and was completely removed from the table.

    Why it failed? Because although the incentives given for people to collect receipts and gain returns the government had a double "whammy" on their books. The turnover increased in the country but the government had to pay out to the tax payer. Meanwhile from the other side the businesses of the sectors mentioned simply did not put forth their taxes. These direct taxes owed to the government turned to arrears. Hence the government lost direct taxes which were not paid and had to pay out to the people.

    The reason i consider that it was a half solution it in part to what i think Schauble has requested. Direct taxes paid in upfront. This is problematic for businesses as it can not be done but if there was the use of a Cash card this would automate the whole system of the governement to gain all direct taxes asap. This idea was presented by Varoufakis but it was public flogged by the whole greek media (which i do not know why). I believe because it was an out of the box idea which Varoufakis said. Anything Varoufakis says is flogged. I believe the combination of the taxes return to the consumer and an automatic direct tax going into the gorvement would great help the general economy.

    The problem in greece is not the tax levels but the collection. Nobody hears this. The solution is two parts.

    1. Give incentives to all populace to collect receipts so the transactions is formally made.
    2. Formulate an automated system of tax submission by business to pay VAT immediately. Even without cards should a business gain cash which is deposited in an account weekly, the business should be obliged to pay the VAT with a very short time space (every 1-2 weeks). And this would be quite easy with ebanking. It simply needs training.

    If some sort of the above system was made the economy, the everyday economy, would balance and would lead to the reduction of VAT in performing sectors like restaurants, services like doctors and plumblers etc.

    Just an idea to a ailig problem.


    1. I agree that more electronic transactions should be encouraged, and lowwer VAT rates on such would help. But there are many impediments. Here are a few:
      (1) most elderly Greeks are incompetent even with plastic cards, and especially with computers and internet. This requires mass adult education and training classes -- who will pay for these?
      (2) Most elderly Greeks do not have bank cards or even accounts.
      (3) Most small businesses do not accept electronic transactions because the banks and Visa etc charge too much.
      (4) Now, I understand, even supermarkets with the facility are refusing electronic transactions because of their cash flow problems (and maybe fear of the safety of electronic credit in failiing banks)
      (5) Many Greeks fear the tracking of their activities by banks, the State, the secret services, etc. This is a valid fear -- since it is what happens in the UK and most of northern Europe. The state knows everytyhing you do from tracking phones and credit cards.
      (6) Since the tax system has always been so screwed up, informal transactions have never disappeared except for large companies. No small business can surivive without massive reform of the entire operation of taxation, and cash transactions are part of the system.

    2. No one ever has replaced a system overnight, so it is quite natural that the old and new coexist for a long time. Incentives for using electronic transactions - both on the consumer side and the merchant side - will go a long way, and there are many ways to go about them. For example (with the caveat that these are only ideas, not fully thought out proposals): tax credits for merchants, and rewards-style credits for consumers, assuming that under the EU cap for transactions fees this still makes economic sense.

      Whoever can use the new system - great for them and the state. Who cannot - over time there will be fewer and fewer of them, and so the benefits should increase from year to year.

      In my view, convenience and easy incentives are the key here. I disagree that the 2009-2010 system was great. As far as I am concerned, it was completely ridiculous and excessively burdensome on consumers to gather receipts and mail them to the tax office, and just another way of treating a symptom, rather than a root cause of the problem.

      By the way, as far as supermarkets are concerned, didn't it strike anyone as odd and again completely ridiculous that the stores had to maintain a row of card terminals, one *per bank*? This was a few years ago, so I don't know if it has changed since then. It made electronic payments so inconvenient and take up so much time that it simply was not worth it. The final straw that broke the camel's back was when the stores asked me for identification along with the debit card. When I objected, they told me that is was a new policy. *Ugh*. Possession of the card and PIN is good enough for everyone else, why not them?

      It is possible to make electronic transactions go faster than cash transactions, and much more convenient. That is such a low-hanging fruit with so much potential benefit that it really shouldn't matter if the elderly do not adopt it immediately.

  25. To Guest (xenos):
    can you please tell me, why there is so little solidarity amongst the Greeks themselves? The rich Greeks have already brought or still try to bring their money out of the country to save it, before Greece looses the EUR or may crash financally. Is it - from your point of view - ok, that they have done / are doing that? Why do they desert their own mother country at a time, where it needs solidarity from its own people and from the other EU-members? Why shall only the other EU members solve the Greece's problems?
    A second question is, why it is democratic that one of 28 EU-Members decides in a referendum, if the offer of the "institutions" is to be said "yes" or "no"? From my point of view it would be a really democratic act, to aks all the EU-people, if the offer is ok or not.
    What the Greece government had done and still is doing, is - from my point of view - try to dictate their wishes to the rest of the EU. I know, you see it the other way arround, but try to be obvious: The Greek government was not willing to find a compromise, though they had reached a lot of improvements for Greece in all the negotiations of the last 5 months.
    And as long as so many wealthy or rich Greeks are not willing to help their own country are even exploiting the help of the ECB and IWF by taking their money from the Greek banks and transferring it into other countries, I can understand, that the other 27 EU-members dont't want to finance this kind of system any longer. And remember: The EU has already paid a lot to Greek during the last years. This must have an end. And the EU must be able to trust that it has stopped. Then there can be a haircut on debt for Greek and a further auxiliary program. But it needs the cooperation of the whole Greek people and not only the payment of the other EU-Members!

    1. @Anonymous. As I am not a Greek, I feel a little awkward answering your first query. My comment as an outsider who lived in Greece for 17 years (plus prior years of research) is that in the matter of money Greeks are probably no different from Germans or British. Rich people everywhere put themselves before their country: this is part of globalised neoliberalism. It was also evident in earlier decades with some Latin American states, where the socio-economic elites saw themselves as part of the developed world, and acted accordingly with their money. It remains a sad fact of life, and many (poorer) Greeks are very angry about it, especially as much of the money is derived from corruption and political power. One of the aims of Syriza was to address this issue, but they have received no support from the Troika in addressing corruption: as usual, the Troika was concerned only to collect taxes from the poor, since these are the easiest ones to extract.
      As far as referenda are concerned, the whole eurozone is a disaster. The peoples of Europe were never consulted, and Greece has introduced democracy into the European arena. At this moment of near-collapse of the Greek economy, the Greek referendum was analogous to consulting the people about going to war -- rather than a calm discussion about long-term choices. But your question should be addressed to all the EU politicians of the past and present, who have no respect for democratic institutions. At this time, with Greece about to disintegrate into a humanitarian catastrophe, the idea that there can be any consultation of any population is just absurd. But as a general principle, I think the Greek people would agree with you.

      AS for the Greeks not finding a compromise, you are just wrong. The problem is that the Troika did not negotiate honestly and in good faith. They suppressed the technical report of the IMF for 5 months, the report that backs up varouafakis' claim that the economy cannot survive without debt restructuring, simply because the Germans do not want debt restructuring. This is fraud. The report was finally published last week ONLY because the entire world voted against Europe in the IMF governing board -- that is, South America, Asia and the USA. Most of the world considers the Germans to be off their heads in the management of the eurozone crisis: and this is also my view.

      As for extracting money from non-resident rich Greeks, no country does this. The nearest to it is US policy on taxing expatriates. But Greece is not the USA; and there are bilateral tax treaties, European conventions and the non-enforceability of Greek state decisions across the world. No country can do what you suggest, especially with the criminal banking activities of banks in Switzerland, Luxembourg, Channel Islands, etc. You can be sure that a Left government like Syriza wants the super-rich Greeks to pay for Greece -- and it cannot find any easy way.

    2. Anonymous July 7, 10:13 AM:
      You are totally right: Indeed, why is there so little solidarity among the Greeks themselves? You might also have asked: Why are they not paying their taxes? 76 bn Euros of unpaid taxes is the last figure that I have read (more than a quarter of GDP); it may be more in the meantime. Why are they not fighting tax evasion more vigorously? The Lagarde list was handed over five years ago - very little action has been reported on that since then! How is it possible that Greeks keep complaining about social hardship (which evidently does exist), while other European countries with much smaller incomes have obviously managed to care in a better way for their poor?
      And where the hell have all the hundreds of billions gone that were given to Greece - the money from EU structural funds, the debt reductions in the bailouts, all the credits that will probably never be paid back?
      Varoufakis has said on some occasions that too much money was given to Greece. That may be true; creditors should have pulled the plug much earlier

  26. Dear All,

    I would like to request that all read this article.

    Email from Greek Voter With "No Dreams and Nothing to Lose"; Greek 'No' Vote Demographics


    1. Good letter, and I can understand it.
      It reminds me to the German saying "Ich weiß nicht, ob es besser wird, wenn es anders wird. Ich weiß nur, dass es anders werden muss, damit es besser wird." aka "I don't know, if it will get better, when it changes. I just know it has to change to get better."

      I think its good that especially the young generation is ready for new ways as they are the people who have to work it out.
      If it is the way to free the creative energies of the Greeks it may be better than remaining within Euro. Reminding to the early Ninetees: Such new freedom can unleash enormous energies in a people, at least for the first months or years.
      At least it should finish the endless hickhack with other european countries.

      But as you know there will always be collaterals, sometimes very huge ones...

      I suppose it is getting time to speak more about "How to organise a controlled Grexit and avoid an uncontrolled Graccident"

  27. Mr. Kastner,

    Here is another proposal which it is a solution which kills 3 birds with one stone.

    1. Large Public Sector Overbloated.
    2. Improving Efficiency of the Public Without Lay Offs. (Political problem)
    3. Tax Evasion At the Heart.

    Point one is a complaint by troika and they are right. Point two also a complaint but labor laws are set up to protect the people, which is correct by EU moral standards. Point 3 the famous tax evasion of Greece.

    My Idea:

    Take 10-20-50,000 public workers from the areas where they are doing nothing or retarded public work. Shift them directly under the ministry of economics in the special division of SDOE. (Tax authority). They get trained as to make detailed evaluation on all tax returns and also sectors of cross books evaluation from land registry/income tax and wealth. You give them a base pay only with the bonus. The Bonus is that every tax evader caught you will get 1/100 of the amount evaded. To give incentives on chasing the private sector. Such an action cover both points 1 and 2. Point 3. The majority of greeks i would say 70% of them go to accountants to make their annual tax returns. Due to the shear size of workload, only spot checks are made by annual on tax returns. Usually check are made on people who have returns or some high profile people. The tax evadance is almost everywhere. Fudging a tax return is quite easy when the basisi is simple changing a few numbers. So with the extra work force you check almost every tax return. Accountants who are quite good at manipulating numbers and or books of small businesses are and should be the target. 1st offense tf a fudged book or tax return is given the accountant is accountable. with a monetary penalty. 2nd Offense loss of liscense. Plain and simple.

    Put people from public sector with incentives to chase people in the private sector as to force people to declare by the book. The result. Efficiency in Government tax collection, no unemployment coming from the public sector, clarity to the tax system.


    1. Interestingly, that was one of the proposal I had made Varoufakis back in January and about which he got all excited. My focus was more on capable unemployed university graduates than public sector employees because they would likely be more motivated. I called them "the young tigers". They would only be trained to make evaluations; no executive function. Whenever they would find suspicious evidence, they would pass the name on the the executive. I mean it a complete official and publicized project. Unfortunately, Varoufakis converted into what I would call an undercover experiment involving even tourists as undercover agents. Maybe he had misread my paper...

    2. Mr. Kastner,

      Even a better idea with the young tigers, but you do not solve the point 1 problem within my solution. Maybe we can limit this stone two (birds) problems. I like your idea with one exception.

      The young tigers are resposnible to the end for their own projects. Once you have someone of power above them, who with experience knows how to make folders "disappear" then the solution to our problem becomes a bigger problem. Kick backs to public officials.

      An addition to the above. A law which should be implaced immediately. Any tax worker working at SDOE, caught taking kick backs. Immediate encarseration. Jail time.

      I am playing with the idea to make an application to a party.


    3. To add mr. kastner.

      Do you know how many well educated and capable unemployed grad students we have?

      In the private sector we take the cream of the crop and with very efficient costs while the kids gain the knowledge to grow into the future managers etc.

      I have so many ideas and projects and i simply can not get by the fact that there is no action.

      I am sure that the government is so flustered with troika requirements that they have no time for the real problems and real economy.

      If i was prime minister, right now, i would give my cv to schuable and company, tell them to finance me for 6 months to get these ideas in the works. At 6 months i would present and sign a a deal without a bail out but an investment program to our projects. And release a project a month cps. Have teams follow up the progress of each project.

      Now that i am thinking about. Instead of bailouts why can't the eu become direct investors and take cuts from future profits of greek projects which guarantees money return.

      For example: Ellinikos. (Old Greek airport) greek governement sells the largest piece in a form of shares to a private sector. Gain funds up to 80% from the sale. Put that money into debt structuring, while maintaining 10% for greek government future profits and the other 10% to the eu. Future profits.

      I know my ideas on paper sound crude but there are specialists who can work out the small print.

      Incedentally, in my job i litteraly bang out at least 1 good idea a week. Our company (Knock on wood) is doing quite well -minus the lost sales due to this latest crisis.


  28. Mr. Kastner,

    I am seeing various strange "messages" from the market. Just different things i can not detail. Is the eurogroup really about a solution or a discussion on how Greece will leave the euro quietly?


    1. What I have picked up today from all the different media is that the Greek delegation arrived without a proposal, explaining that the proposal would be sent tomorrow. My (Marxist) best friend in Thessaloniki had an explanation. He said Tsakalotos' wife was preparing fried eggs for breakfast and mistakenly spilled all the oil over the proposal. So it has to be re-written. Nothing like Greek humor!

    2. [sarcasm]Maybe the other 18 should send Mr Tsipras a bill for the cost of sending their FinMins to Brussels, I read somewhere he has a Net Worth of €138M - no evidence though.[\sarcasm]

      My interpretation is that the real game is to find someone on whom to pin the blame for a Greek Exit - Draghi, Tsipras, Merkel or Lagarde. IMO the one least likely to be bothered by the vanity of legacy is Merkel.

      I found this BB interview, interesting This May Be Greece's Last Chance: Former Ambassador Ries

      And Charlie Rose's latest show featuring Megan Greene, Ian Bremmer, and Sebastian Mallaby is worth a listen.

      Aside : Montenegro uses the Euro and its not even a member of the EU let alone the EZ, could that be a 'model' for Greece.

    3. Left field whacko idea.

      Why not transfer state assets to the people at 'nominal' value via margin loans, let them sell their shares to 'investors' as and when they see fit; when they sell they would have to repay the margin loans - maybe no capital gains tax .

      The people are more likely to do something useful with windfall profits, like maybe spend on house renovations/maintenance, and buying Greek products, the government would only channel it to their clients.

  29. @ V
    You are a person of good intentions, so let my try to recap some of what I had proposed to Varoufakis back in January. Somewhere in my blog there are articles about each one of them.

    1) Build up a league of 'young tigers' for purposes outlined below. Something equivalent to what the American Peace Corps had been, except with a different mission.
    2) Train the tigers in tax evaluation skills. Provide them with names so that they can do 1 interview per day. If there are 1.000 tigers, that will be 1.000 interviews per day. Or 90.000 interviews per quarter!
    3) Require all anonymous companies to be registered. Require each one of them in writing to reveal their beneficial owner. If they don't reveal names, an annual tax will be applied via encumbering the assets owned by the anonymous company. As the tax liability gets larger and larger, they beneficial owners may appear. If not, they will eventually lose the asset. The tigers can do all the paper work.
    4) Do the same thing with the official and transparent database of EU subsidies. All the names of recipients, amounts, purpose etc. are in the data base. Have the tigers do the checking whether subsidies were paid justifiably.
    6) A couple of years ago, the Bank of Greece revealed that 2010-12, 55.000 transfers were made to foreign accounts. Probably a lot more since then. That would keep a lot of tigers busy for a while...
    7) Lagarde List - same procedure.
    8) Suspicious tax payers - same procedure.
    9) create an obsession with import substitution. If you can get the masses to vote passionately for "no", then you ought to be able to get the masses to passionately broadcast "buy Greek products wherever you can!" Clip the wings of the import lobby.
    10) create an obsession with exports in the same manner. Restaff the Greek Export Promotion Agency with sales managers from private industry in management positions. After all, that ought to be an aggressive sales organization.
    11) staff up an aggressive foreign investment agency. Most countries have that. For example, the Austrian agency is an aggressive unit where the people travel throughout Germany to praise the advantages of investing
    in Austria.
    12) Rename the EU Task Force into "Greek Task Force with EU support". Have the present Task Force report to a Greek at ministerial level who, in turn, should report to the PM to show top priority. The mission of the Task Force has been mentioned frequently (create an efficient and modern administration, etc.).
    13) Design legislation which would make Athens/Thessaloniki extremely attractive places for the establishment of HQ of trading companies. In terms of trading, Greece should become to South Eastern Europe (or Europe altogether) what HongKong used to be to China.
    14) Consider putting selected state assets into a fund where the investors commit to spend at least 20 BEUR to dress up these assets for privatization. If investors can sell assets at a premium over what they paid Greece, that excess should mostly go to Greece.
    15) Implement the McKinsey Plan. Or, if you don't like it, make another plan along the same lines. But make a plan!!!

    And there were a few more which I don't recall right now.

    Varoufakis was totally excited and this was the reason why he offered me a job. These issues were going to be addressed head-on without delay. The plan was already in the making, he said.

    That's the last thing I heard about all that.

    1. By the way, regarding the "young tiger" idea: Schäuble said that Germany offered to Samaras as well as to Tsipras/Varoufakis to send skilled german tax collectors for free to Greece to help collecting Greek taxes.

      He said he did not receive any interested reaction.

      Are tax collectors not welcome?

    2. @Roger. Policy and bureaucracy follow cultural patterns, not universal ones. Anyone who knows Greece well, knows that some of the biggest problems have derived from importing German and French structure and approaches, with no thought as to how they would work in reality. Greek policy needs indigenous solutions, prepared by Greeks in tandem with international experts. Germans bureacrats have no idea how things work in other countries: it is yet another example of how clueless Germany is. There is the arrogant idea (shared by Americans and others) that other countries are just failed or backward versions of Germany (or USA etc).

      Public policy has moved on since the 1970s, which is where Schaeuble seems to live. Nobody can take his stupidities seriously.

    3. Hi guys,
      I am not a lounging, but I am tiger. I am quite not sure how to get involved but i am thinking of looking into the task force if it still exists.
      Roger my man to be honest, I have lived here for 17 years now and I still do not make sense out of things. Other things that Don,t make sense to you I do understand.

      I told my colleagues today that I am interested into looking to go politics or some kind of technocrat behind the seens and they told me two things. One Don,t do it as the public sector is viscious more so than the private sector and 2 should I decide they would all support and vote for me. I will decide and resource. In the meantime I have had a goal for my current company to help reach half a billion turnover and one billion by 2025. But right now it seems far off with this years set back. I am very proud of our corp. All worth while people. Working hard and doing my jib helps create value in Greece meanwhile help boost local suppliers output and knowledge. I am helping only indirectly and feel the need that i have to ho to the core. I have young kids and not sure if I can focus on so many things. I must get involved somehow.

      I hope things are not too late. If we are sent back to the stone ages it will be even harder. My accountant told what am I doing here? Why don't you leave and go back to the USA. I told him my home is where my heart is. And that is in the bedrock of Greece. I would be zombie in life away from here and I would feel guilt forever.

      Seems like the agreement is close. Good signs. Hope tsipras can keep the country long enough to survive. Then we see.

      Mr masters. We / I need you. Should you get a job and need an assistant please contact me please. It would be my honor to learn from you.


    4. Sorry for the above errors, i was typing from my tablet with automatic word corrections. Funny how it change Kastner to Masters. :-)


    5. @ Roger
      The idea of sending German tax collectors to Greece lacks sensitiveness. You can send German and other EU experts to Greece to council the Greeks but no foreigner can do the job for them. Wouldn't be accepted. In fact, the EU Task Force for Greece was exactly for that purpose. And yet, they were not really accepted and rather viewed as part of an occupation force.

  30. Thanks for keeping your sense of humor Klaus, I love story telling with an ironic twist. That a lot of Greeks find it malicious and offending is sad but no surprise. I have not found them to appreciate that any/anything Greek can be in any way amusing.

    1. You're so right. Come on, Greeks, have a laugh too:

      Isn't it great to see Northern Europeans exhibiting the same old sense of humor?

  31. Fact is stranger than fiction. Tsipras intended to lose the referendum.

  32. The spilled oil theory is as good as any I have heard, and more funny. The most malicious being that the FinMin in spite of his name and education can not use a spread sheet.

  33. Too obvious a prank. Try again.