Yanis Varoufakis opens up about his five month battle to save Greece • Hacker News Board

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#81

Post by parasubvert » Tue, Jul 14, 2015, 1:52 PM UTC

roel_v wrote: post #57

theseatoms wrote: post #19

For those who are just catching up, I found the following article enlightening on the Greece situation: http://www.pragcap.com/greece ..especially the following line: - The EMU is a single currency system just like the USA is. The reason the USA works and the EMU doesn’t is because the USA has a system of rebalancing whereby poor states get more federal funding than wealthy states.

Yes, because when California almost went bankrupt in 2012 all they had to do was call Pennsylvania, who then promptly wrote a check for 1/2 of California's GDP, and then said a few years later, when California still hadn't fixed its ridiculous retirement fund shortfalls, 'Nah you know what, you have nice beaches we visit every now and then, let's call it even.' Oh no wait, they didn't - and the amount of federal fund…

It isn't up to the individual states. The Feds can and do keep various states afloat through a variety of transfer institutions. Texas in the 1980s had to get a bailout of over 30% of its GDP due to the Savings and Loan crisis and resulting (ahem) debt forgiveness by the FDIC. New York certainly got a massive injection from the Central Bank during the fall of Long Term Capital Management. Mississippi and Alabama have been net benefitors from taxpayers in other states via entitlement programs for a generation now.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#82

Post by roel_v » Tue, Jul 14, 2015, 1:53 PM UTC

andy_ppp wrote: post #53

roel_v wrote: post #41

Earlier quoted context omitted.

"True and honest"? Are we reading the same article? He sounds like a bitter extremist who doesn't know how to control himself in order to reach a certain goal, but instead like either a petulant child or an autistic person (depending on the day of the week, it seems) can only repeat 'the Greeks voted for no extra cuts yet stay in the Euro so we should get it' (no shit? and I'd like a pony) and 'my economics paper say…

You sound pretty bitter yourself. I find it strangely Kafkaesque the way each country has their own vested interests in destroying Greece. We know absolutely that they will not pay this money back (and as a price Europe is destroying their country and seizing assets, a coup of kinds). I think they should go bankrupt - and the banks will be falling over themselves to lend them money again! It's amazing that 90% of the…

Well, if the Greeks would agree with your idea, they'd do it, don't you think? And if they'd really think they'd be better off leaving the Euro, they would, no? Instead, they are willing to accept drastic measures, and even Varoufakis has all eyes set on staying in the Euro zone, even if only in a farcical way (his 'we'll issue Euro-denominated bonds ourselves even if the ECB cuts us out' fantasy).

The way I see it, they want to stay in the Euro no matter what. Everybody saying 'leave the Euro' seems to know better for them than they do?

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#83

Post by justaaron » Tue, Jul 14, 2015, 1:53 PM UTC

jwr wrote: post #47

Reading all these heated discussions on HN, I find them to be extremely polarized ("good Germany/bad Germany") and missing the essential component: Greece is not a country that can sustainably live without working hard. Why do so few people mention that almost 75 percent of Greek pensioners retire before the age of 61? While I do think debt relief is a necessary tool, I also believe that we should hear much more abou…

because this is a red herring, likely not true, and besides the point: the point is that the 5 years of austerity, privatizations, and privations have ruined the Greek economy, made it impossible to achieve the surplus goals mandated, and basically ensured that there will be no way to exit the debt. further application of the same medicine is stupid, unless you are TRYING to destroy and divide-up Greece, hence the metaphors discussed. A constructive economic policy needs to replace austerity as the Eurogroup medicine for economies like Greece, as we can see that it doesn't work. There is also the issue that you seem to be unaware of how the actual situation has progressed over the last decade, the last 3 Greek governments, the surpluses achieved in a short period of time during attempted reforms, the negative effects of privatization, capital flight, etc. There is also the issue of you thinking that German or other EU taxpayers are being asked to bail out Greece. The ECB run the Greek central banks. Those banks have gotten over 1/3 of all bailout assets for recapitalization goals. Interest earned on Greek money is being held by the ECB. The Greek people didn't need any of this to live. They grow more food than you do in Germany, and the entire economic game was set-up in Benelux, Germany, France, etc, anyway, and the Greek economy was never at their level in the first place, and so a common currency was filled with lots of German Submarine deals etc. Look at your auto industry. I live in Portugal. We don't make any cars here anymore, except so-called-German-ones (VW) or French ones. The profit chain always leads back up north. We are just the dummies making your olive oil. If the Eurogroup wishes to defend their senseless actions, they will of course suggest that you, the bloc taxpayers, are on the hook. If you are smart enough to see through their attempts to divide, you will see that the bloc IS paying for all of this clowning around, all of the time, and that the problem is related to the general European banking sector's relationship with international finance, the ECB & national-bank relations not being linked to any public policy we can meaningfully democratically participate in, wolf-like behavior of groups like the IMF, and I'm sorry to say the Eurogroup, and their economic interests etc...

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#84

Post by msandford » Tue, Jul 14, 2015, 1:54 PM UTC

MrBuddyCasino wrote: post #56

Mikeb85 wrote: post #35

Earlier quoted context omitted.

And this response shows that you know nothing about economics or finance. > do something again the blatant corruption, burocratie and tax evasion Corruption and tax evasion are an economic problem, not a moral one. People decide whether or not to pay taxes based on many factors - convenience, value, habit, punishment, etc... In a 'developing' economy, like Greece, if there's a history of not paying taxes, you need to…

> Corruption and tax evasion are an economic problem, not a moral one. Not true. The Greek state has traditionally been seen as an enemy of the citizen and something to take advantage of. This is due to the muchtar system established hundreds of years ago by the Osman empire, establishing clientilism. E.g. Estonia is much better on all these metrics, but income levels are similar or below Greece. > Greece did not spe…

> New York and California have comparatively high tax rates, enormous housing costs and expensive wages. They seem to be doing just fine. Also see Germany, Austria, Switzerland and all of the Scandinavian countries.

These places all have other things going for them, though.

Why don't you move to a small town in Nebraska and pay all the Federal and State taxes as well as a 20% income tax, 10% property tax, 20% sales tax, etc. Oh, because you want something for your tax money? Hmmmm.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#85

Post by agumonkey » Tue, Jul 14, 2015, 1:54 PM UTC

calibraxis wrote: post #79

junto wrote: post #72

Earlier quoted context omitted.

To be fair, the vast majority of the bailouts have gone to paying back debts. Those debts were held with corporate German and foreign banks. And here is the kicker; Those debts are now held by the ECB, which, is not supposed to be a lender of last resort, but now has become one by default. The corporate banks are now safe and have extricated themselves from the risky position they found themselves in 5 years ago. The…

Yes, Varoufakis mentioned: "Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone." ( http://yanisvaroufakis.eu/2015/07/11/behind-germanys-refusal... ) A bit like nuking Japan was the first shot in US's Cold War against USSR. (But fortunate…

I find it frightening that someone in their government tries to pull such strings to enforce economic views.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#86

Post by parasubvert » Tue, Jul 14, 2015, 1:56 PM UTC

CurtHagenlocher wrote: post #67

lhnz wrote: post #23

Does this mean that Democratic countries that are part of the Euro are rendered unable to listen to the wishes of their citizens and must instead act as despots on behalf of Germany? If so, I don't see this ending well.

Every borrower of money has to come to terms with the lender, or there will be no money.

Never had this been true in history. Bankruptcy and debt forgiveness have happened regularly through history. And if those don't happen, usually revolution or war is a consequence.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#87

Post by RobertoG » Tue, Jul 14, 2015, 1:58 PM UTC

roel_v wrote: post #57

theseatoms wrote: post #19

For those who are just catching up, I found the following article enlightening on the Greece situation: http://www.pragcap.com/greece ..especially the following line: - The EMU is a single currency system just like the USA is. The reason the USA works and the EMU doesn’t is because the USA has a system of rebalancing whereby poor states get more federal funding than wealthy states.

Yes, because when California almost went bankrupt in 2012 all they had to do was call Pennsylvania, who then promptly wrote a check for 1/2 of California's GDP, and then said a few years later, when California still hadn't fixed its ridiculous retirement fund shortfalls, 'Nah you know what, you have nice beaches we visit every now and then, let's call it even.' Oh no wait, they didn't - and the amount of federal fund…

When California goes bankrupt the federal government spend more money in California. This is automatic. This doesn't happen in the Euro area. In fact, the opposite happens: Brussels force the country to spend less.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#88

Post by diego_moita » Tue, Jul 14, 2015, 1:59 PM UTC

Disclaimer: my parents are Portuguese and I visit Portugal regularly.

I understand his feelings, I don't understand his reasoning.

I understand his feelings because there is a lot of unfairness going on: big economies (e.g.: France, Italy) are treated with more leniency and tolerance than small economies (e.g.: Portugal, Spain), simply because they're far more important to EU. It is humiliating and Greece should feel it even worse.

I don't understand his reasoning because for the indebted countries there are only 2 objective choices: it is the EU way or the highway. The EU simply can't accept that Greek voters just decide to quit the treatment but remain in the Eurozone because the voters of Portugal, Spain, Italy and other countries would do just the same. It would have been the end of Eurozone.

Varoufakis and Syriza should have started a Grexit strategy from the early beginning. They didn't, so Germany saw they were bluffing and won the game.

Greece lost because Varoufakis didn't understand what was at stake.

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#89

Post by taliesinb » Tue, Jul 14, 2015, 2:00 PM UTC

sandstrom wrote: post #49

While I agree with some of Varoufakis ideas (e.g. that Greece may be better of leaving the Euro, since internal devaluations are hard), he doesn't portray the other side objectively. Many of the suggested improvements are objectively sound, e.g. property taxes, tax collection in general, normalized VAT, reducing government corruption and red-tape, removing various monopolies, etc. Greece is the most corrupt country i…

> Many of the suggested improvements are objectively sound, e.g. property taxes, tax collection in general, normalized VAT, reducing government corruption and red-tape, removing various monopolies, etc.

Those have been proposed by Syriza itself, but that hardly matters because the disagreement is not actually about economic policy, at all.

The salient features of the Eurogroup deal are things like: "give us $50 billion of your airports, bridges, government land, tourist attractions, etc, but at today's Depression-era prices". Shock doctrine stuff.

And: "take far more severe austerity, for the chance to negotiate another bailout you need to pay us back for the previous bailout, without debt relief being on the table, despite your population rejecting this option in the very recent past, despite the IMF concluding the current debt load is clearly massively unsustainable". Make that sound reasonable, please.

> It's been ~5 years since the first bailout, yet Greece haven't made much progress.

Could it be that the collapse of 25% of Greek GDP under the last 5 years of austerity demonstrates that more austerity isn't the answer? Some economist wise cracked that prescribing austerity for a country in a depression† is like trying to cure a sick patient with regular beatings.

† the worst depression of a modern state since the 1930s, incidentally.

> No wonder Germans get tired bankrolling all of Greece.

Hah, those generous German tax-payers. But wait, aren't they really bailing out German and French banks, at least indirectly, after the ECB gobbled up all that toxic peripheral debt that is was the predictable outcome of wild trade imbalances in an ill-thought-out monetary union? What fraction of Greek bailout money was just recycled into paying back the IMF and ECB? Do you know?

Do you know how loan sharks operate?

Here's an alternate perspective to jar you out of your slumber:

https://foreignpolicy.com/2015/02/20/its-time-to-kick-german...

Re: Yanis Varoufakis opens up about his five month battle to save Greece

#90

Post by Mikeb85 » Tue, Jul 14, 2015, 2:01 PM UTC

roel_v wrote: post #82

andy_ppp wrote: post #53

Earlier quoted context omitted.

You sound pretty bitter yourself. I find it strangely Kafkaesque the way each country has their own vested interests in destroying Greece. We know absolutely that they will not pay this money back (and as a price Europe is destroying their country and seizing assets, a coup of kinds). I think they should go bankrupt - and the banks will be falling over themselves to lend them money again! It's amazing that 90% of the…

Well, if the Greeks would agree with your idea, they'd do it, don't you think? And if they'd really think they'd be better off leaving the Euro, they would, no? Instead, they are willing to accept drastic measures, and even Varoufakis has all eyes set on staying in the Euro zone, even if only in a farcical way (his 'we'll issue Euro-denominated bonds ourselves even if the ECB cuts us out' fantasy). The way I see it,…

The problem is that while Greece is better off leaving the Euro, individual Greeks that already have savings would be worse off if their savings were converted to drachmas.

Seeing as how Syriza was elected by a populist movement, they could just as easily be deposed by the same populism, and a lot of people (especially those who are already retired or nearing retirement age) would be upset if they lost a large chunk of their savings.

But yes, economically, the drachma is better for Greece. Especially for younger Greeks who have little to no savings, and wouldn't be hurt by a devaluing currency, but would stand to gain from increased employment.