Valve Economist Yanis Varoufakis Appointed Finance Minister of Greece

> Tangentially, what is the main reason for all the protest against the EU

Austerity measures hit workers the hardest -- the people most responsible for creating economic wealth. To them, the EU is trying to take wealth and opportunity from the already-suffering average person to balance for mistakes and losses made by leaders and other nations. And the punishments have been pretty severe. I'm confident the level of austerity measures, if they faced the American people, would not go over peacefully (assuming we had much of a social net left to give up at this point).

Ahm, no. That's absolutely not true. As a prominent example of German Help, here is the history of the Siemens scandal[1][3]. Also, German's choice for PM when Papandreou quit, was Loukas Papademos. It's the guy who in 2001 acted as a bridge between Goldman Sachs and Greece to false statistics and allow Greece into the EUR. Isn't a kind of strange choice? There are many more situations (military equipment, MAN, etc.) where the German government actively undermined Greece.

Germany, unfortunately, is seen as the arch-enemy along with Brussels in Greece. After 6 years of austerity measures and governments who followed policies dictated by the troika (ECB, IMF, EU but mainly it's Germany) we rank #1 in Europe in suicides, the economy is worse then ever and the public debt has gone up instead of down. At this point many Greeks don't care what a Grexit would bring because they already trespassed the point X of "caring". They are already poor by all means.

That said, it's true again that Germany flushed billions of EU in saving the Greek economy. But almost all of that money was used to keep foreign banks happy by paying high yield Greek bonds owned by German and French banks mainly. The rest of the money was flushed to Greek banks owned by heavily corrupted bankers (e.g. Latsis - Eurobank). Even in situations of small banks like ProtonBank[2] were kept because declared of "national interest" (Ev. Venizelou - Leader of PASOK former Finance Minister and Vice-President) and thus bailed-out in the sound of millions while some pensions went as down as 350 EUR/month at the same time.

So to make a long story half-long: The German government is an extreme supporter of the old, highly corrupt, heavily bribed (by many german corporations) Greek government which doesn't make sense. Merkel is crying home for the Greman tax-payer when indirectly the only thing she really did was just handing money indirectly from the German taxpayer to the German banks via Greece (with huge interests). Truth is that given the results, Germans were more than happy to vote Merkel, so in a strictly political her policy was extremely successful. The only problem is that now all over Europe there is a strong anti-German feeling: Italy (M5S), Spain (Podemos), UKIP (Farage), France (LePen). So give it another ~ 2 years and Greece will be the least of Germany's problem.

Now the real problem Germany and EU is facing is this: If they bailout Greece, they must bail-out Italy and Spain too. Maybe France will follow. But the Greek debt is small so it can be done, if there's political will and a sort of promise that Greeks won't fuck up their economy again anytime soon! But for Italy it's a different matter, if Italy and Spain require a cut oh well... I'm not sure it's even possible mathematically speaking. On the other hand mathematics was never a part of economics, it's mostly politics. There are logistical ways (e.g. the EU buys bonds from failed states and hides them in a locker room for eternity at a very low rate which the countries could start paying God-knows-when...) to bypass this, but the problems are at the level of politics mostly. If Merkel concedes now, the opposition inside Germany will literally trash her and she will not be able to come up with answers, since the story of the poor Greek who spends more than he could afford is the one she choose a couple of years ago.

Sorry the long answer! Jesus I didn't realise I produced so many chars :-P

[1] http://en.wikipedia.org/wiki/Siemens_Greek_bribery_scandal

[2] http://www.reuters.com/article/2012/01/12/us-greece-proton-i...

[3] https://anestis.quora.com/Links-to-credible-sources-about-Gr... <-- link shared by user @realunreal a couple of posts up. Summaries very well my points in the first paragraph!

This is on the money, and you might be interested in this essay, "the tyranny of structurelessness": http://www.jofreeman.com/joreen/tyranny.htm

Germany is a nation that has benefited enormously from a single currency (according to my understanding).

A large source of currency fluctuations are trade imbalances. If a country exports more than it imports, its currency appreciates. If it imports more than it exports, it depreciates. For example, if USA imports from the UK are bigger than it's exports to the UK, then USA will be buying GBP with USD (on average), so the value of GBP will go up relative to USD. This would in turn make UK products more expensive to Americans, so they would buy them less, correcting the trade imbalance.

If Greece, Italy, Spain etc. still had their own currencies, they could simply depreciate them (actually, it would happen naturally, as a consequence of trade imbalance) and so reduce their debt in real terms (similar to what has happened to Iceland). If Greece's currency would depreciate, imports would be more expensive for Greeks, so they would import (spend) less, while Greek exports would be cheaper worldwide, so they would export (earn) more.

Conversely, Germany's currency would appreciate, again because of trade imbalances (they export more than they import).

Because of EURO, this hasn't happened, and won't happen - the trade balances are averaged, making Germany's currency (EUR) less valuable than it should be, and Greece's currency (again EUR) more valuable than it should be. This benefits Germany, because it can sell its cars cheaper, but isn't helping Greece, because Greek olive oil and tourism experiences are more expensive than they should be.

The short-term solution is for Germany to admit this advantage and help the under-performing countries (by giving them money, not just loans, and correcting the trade imbalances this way). In the long term, a single currency should lead to a single fiscal government (like in the US).

Maybe he didn't read closely enough his thoughts. Actually, Varoufakis from his twitter account said that since there is this post around[1] by our beloved Berlinese internet-economist TechieChan he didn't had to analyze BTC any further.

A couple of points he made are:

* He believes that the BTC market can be manipulated by big players easily. * Having a central bank regulating your economy is a good thing, because you know to whom point the finger when shit hits the fan. * He understands that liberals like the perception of freedom that bitcoin gives but it's ultimately false.

All points which I share and believe although I have bought and sold BTC in the past. These are not insights really, these are elementary economics. It's strange that programmers who understand algorithms and cryptography can not wrap their around these things. It always amazed me, I can't explain it :-/

[1] http://www.techiechan.com/?p=1954