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Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

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Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#11

Post by mc32 »

turtlecloud wrote: post #10
mc32 wrote: post #6

Earlier quoted context omitted.

From a Greek perspective, he's not wrong. Germany forced Greece's hand and made them take out a loans they could not pay rather then let them default on their loans as many bankrupt countries are wont to do. Now, sure, Germany had the upper hand knowing that While Syriza had passed a referendum to default that they did not have the heart for it and the Germans called their bluff. In retrospect, Greece would have prob…

That’s the same as from the American playbook. Just read “Confessions of an Economic Hitman”. Why is it ok for America to use these tactics on Latin America yet reprehensible when China does the same? Isn’t this just the pot calling the kettle black?

Are you talking IMF stuff or things the US did back way back when? Is it okay now because the US did it? Just because Stalin in the past starved millions, does that make it okay for the Ukraine, if it desired to do so, or anyone else? Your point is tangential.

Regardless, I was only pointing out that what Germany did to Greece was similar to what China does now to many countries. I'm simply comparing one policy to another. You're the one implying condemnation for China.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#12

Post by JumpCrisscross »

MsMowz wrote: post #8
l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

>All this Germany bashing and his constant condescending remarks remove a tad of his credibility I think it’s the exact opposite. He’s speaking from the experience of being in the Eurogroup and negotiating directly with Germany. Anything he has to say on the matter is far more credible than any of the pro-Euro claims made by people who have no skin in the game. >Is there anyone here on HN who has further reading advi…

> He’s speaking from the experience of being in the Eurogroup and negotiating directly with Germany. Anything he has to say on the matter is far more credible than any of the pro-Euro claims made by people who have no skin in the game.

By that metric, the German finance minister's claims are also the gospel truth on the situation. "Skin in the game" helps when one can affect future outcomes. It aligns incentives. It does nothing for the accuracy of a primary source defending past decisions.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#13

Post by cmrdporcupine »

beerlord wrote: post #9

Why didn't he print some New Drachma when he was Finance Minister of Greece then?

That's where things were headed until he resigned after Tsipiras made it clear they would ignore the results of the 2015 referendum.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#14

Post by fro0116 »

turtlecloud wrote: post #10
mc32 wrote: post #6

Earlier quoted context omitted.

From a Greek perspective, he's not wrong. Germany forced Greece's hand and made them take out a loans they could not pay rather then let them default on their loans as many bankrupt countries are wont to do. Now, sure, Germany had the upper hand knowing that While Syriza had passed a referendum to default that they did not have the heart for it and the Germans called their bluff. In retrospect, Greece would have prob…

That’s the same as from the American playbook. Just read “Confessions of an Economic Hitman”. Why is it ok for America to use these tactics on Latin America yet reprehensible when China does the same? Isn’t this just the pot calling the kettle black?

I don't see how this is relevant to the discussion at hand. I don't recall seeing any mention of the US in the above comments. Nor any connotations suggesting that it was OK for America to do the same.

Even if this wasn't completely off-topic, I'd still recommend reading up on whataboutism to understand why this post was not making a substantive argument: https://en.wikipedia.org/wiki/Whataboutism

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#15

Post by skywhopper »

l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

Not direct malice, but naive over-optimism gone a little too far, perhaps. Krugman has written and spoken a lot about this in a way that's accessible to the interested layman. Search for "krugman optimal currency area", or see https://krugman.blogs.nytimes.com/2012/06/24/revenge-of-the-....

The point is that there are definitely economic benefits to the simplicity and low-overhead of currency union among equal and near-equal partners, but when economic conditions vary greatly between regions (or more correctly, when economic conditions change differently over time in various regions), there can be a greater benefit to having different currencies that can trade at different levels against each other to assist in the proper valuation of resources in either region.

There's no 100% right answer, and national boundaries are not necessarily the "optimal" borders for currency areas, but obviously there are practical issues to weigh as well.

So I think it's obviously wrong to say "the Euro is bad". It's a great thing for France and Germany and Belgium and the Netherlands and several other countries in the Eurozone. But expanding the Euro to Greece maybe was a bit too far.

That said, the EU could do a lot via policy to make up for the problems caused by the imbalance of economic conditions between Greece and Germany, but ... they aren't doing nearly enough.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#17

Post by richardknop »

coldtea wrote: post #5
l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

Well, Germany used the Euro and their influence on the ECB as a strategic weapon to boost their own economy and exports (as opposed to treating the Eurozone as a union). They also blatantly disregarded EU's and their own rules (e.g. regarding deficits) when it was for their own benefit. There are people who, while adults, still believe in unicorns, and tooth fairies, and big nation states with huge national industrie…

All big countries disregard EU rules. France has been disregarding rules a lot more and never gets punished according to EU law. Small countries in Eastern Europe get picked on for violating the same stuff France / Italy / Germany violate. So that system has no credibility if not all countries are treated equally.

Your point about deficits (Maastricht Treaty and other EU regulations after the crises that passed), everybody ignores that but only small countries every get in trouble for it. And when it comes to deficits, Germany is actually one of lesser offenders compared to others.

Also, it has been known for a long time that an agreement when EU was being formed was made and areas of influence setup. Germany was promised to get leading influence in ECB in exchange for basically turning Deutsche Mark into Euro and allowing the whole continent to use the German currency. French got full control of the IMF, for example, and also EU parliament being located partly in Strasbourg plus more influence in some other core EU bodies outside of ECB.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#18

Post by r00fus »

neffy wrote: post #7
l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

It´s complicated. To believe that the Euro is malice by design you would need to believe that current Macro Economics - which most economists are happy to agree is deeply flawed - is not only deeply flawed but is deliberately flawed and promulagated by a bunch of people who know it´s flawed and actually do understand the system well enough to do so maliciously. To which the only response is seriously, have you met th…

Aren’t those “people “ the heads of multinational financial institutions like Goldman Sachs?

Almost every EU country has someone from GS in their leadership structure over the years.

They simply engineered an arbitrage situation...

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#19

Post by mcny »

skywhopper wrote: post #15
l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

Not direct malice, but naive over-optimism gone a little too far, perhaps. Krugman has written and spoken a lot about this in a way that's accessible to the interested layman. Search for "krugman optimal currency area", or see https://krugman.blogs.nytimes.com/2012/06/24/revenge-of-the-... . The point is that there are definitely economic benefits to the simplicity and low-overhead of currency union among equal and n…

>> The point is that there are definitely economic benefits to the simplicity and low-overhead of currency union among equal and near-equal partners, but when economic conditions vary greatly between regions (or more correctly, when economic conditions change differently over time in various regions), there can be a greater benefit to having different currencies that can trade at different levels against each other to assist in the proper valuation of resources in either region.

How do we make things work here in the US?

>> So I think it's obviously wrong to say "the Euro is bad". It's a great thing for France and Germany and Belgium and the Netherlands and several other countries in the Eurozone. But expanding the Euro to Greece maybe was a bit too far.

I don't know how Greece would have been better off with Drachma. I mean Drachma is still convertible currency, no? Greece isn't Zimbabwe. They can't just print money, can they?

Maybe this is naive but I don't understand how currency matters unless you have some weird third world level conversion control.

Re: Yanis Varoufakis: The Euro Has Never Been More Problematic [video]

#20

Post by richardknop »

mc32 wrote: post #6
l4u532 wrote: post #3

All this Germany bashing and his constant condescending remarks remove a tad of his credibility, which is unfortunate when making such audacious claims. Is there anyone here on HN who has further reading advice on these claims (E.g that the € is malice by design)?

From a Greek perspective, he's not wrong. Germany forced Greece's hand and made them take out a loans they could not pay rather then let them default on their loans as many bankrupt countries are wont to do. Now, sure, Germany had the upper hand knowing that While Syriza had passed a referendum to default that they did not have the heart for it and the Germans called their bluff. In retrospect, Greece would have prob…

Nobody forced Greece to take loans they could not repay. That's a revisionist history. Greece had a choice to turn down the bailout and instead default on their debts. They knew they would not be able to continue using Euro if they did default so they instead deciding they'd prefer to stay in the Eurozone and took the money.
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