Yanis Varoufakis: The Euro Has Never Been More Problematic [video] • Hacker News Board

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

#21

Post by AnimalMuppet » Wed, Dec 26, 2018, 5:21 AM UTC

mcny wrote: post #19

skywhopper wrote: post #15

Earlier quoted context omitted.

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 t…

> How do we make things work here in the US?

By being one country as well as one currency region.

That's not just a glib answer. The US can use federal financial transfers to help, say, Mississippi. But the EU can't use direct financial transfers to help Greece, because EU rules (IIUC) don't allow it, and Germany (for example) wouldn't put up with being taxed to pay for it even if the rules allowed it.

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

#22

Post by Analemma_ » Wed, Dec 26, 2018, 5:25 AM UTC

mcny wrote: post #19

skywhopper wrote: post #15

Earlier quoted context omitted.

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 t…

The way we make it work in the US is with federalism and huge ongoing cash transfers (poorer states get way more money out of the federal government than they pay into it). Each of these alone are politically toxic in Europe, never mind both of them together; hence the increasingly widespread sense that the Euro is doomed in the long run.

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

#23

Post by AnimalMuppet » Wed, Dec 26, 2018, 5:27 AM UTC

richardknop wrote: post #17

coldtea wrote: post #5

Earlier quoted context omitted.

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), eve…

Greece wouldn't have been punished, either, except that they were also asking for help at the same time. At least, I don't think they would have...

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

#24

Post by [deleted] » Wed, Dec 26, 2018, 5:42 AM UTC

mcny wrote: post #19

skywhopper wrote: post #15

Earlier quoted context omitted.

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 t…

[deleted]

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

#25

Post by mcny » Wed, Dec 26, 2018, 5:53 AM UTC

AnimalMuppet wrote: post #21

mcny wrote: post #19

Earlier quoted context omitted.

>> 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 t…

> How do we make things work here in the US? By being one country as well as one currency region. That's not just a glib answer. The US can use federal financial transfers to help, say, Mississippi. But the EU can't use direct financial transfers to help Greece, because EU rules (IIUC) don't allow it, and Germany (for example) wouldn't put up with being taxed to pay for it even if the rules allowed it.

Thank you for the reply. I knew I was missing something.

> Germany (for example) wouldn't put up with it even if the rules allowed it.

It makes sense. I have a lot of respect for Germany but there's probably some limit to how much they can make miracles happen. The nineties wasn't that long ago and my understanding is Germany has invested a lot in Eastern part of Germany over the last two or three decades. I'd be apprehensive about pouring money into Greece if there's no common identity between Greece and Germany that instinctively reassured me that if there was some tragedy in Germany, there wouldn't be "foreign aid" from Greece but rather the same disaster relief as Greece would offer itself.

My understanding though is that the common identity is still rather weak. I'm not just poking at the French. Seems like all Europeans think of themselves as Brits, Spaniards, Italian, or bla bla bla before they think of themselves as European. I think I listened to someone argue that the EU is not a country and never will be based on how the Constitution behind less preamble:

>> HIS MAJESTY THE KING OF THE BELGIANS, THE PRESIDENT OF THE CZECH REPUBLIC, HER MAJESTY THE QUEEN OF DENMARK, ...

I think they tried to argue that the EU is somehow superior and more modern compared to these United States of America. I don't know much about the Eurozone but I'm very optimistic because I don't see any other way Europe doing any better than barely surviving if it did not unite.

More importantly, I think the stupid and nostalgic old people will die at some point.

> Just over 70% of 18 to 24-year-olds who voted in the referendum backed Remain, four major academic and commercial polls conducted shortly after the ballot agree, with just under 30% backing Leave.

> In contrast, only 40% of those aged 65 and over supported Remain, while 60% placed their cross against Leave.

https://www.bbc.com/news/uk-politics-45098550

I am optimistic, for what it is worth.

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

#26

Post by polotics » Wed, Dec 26, 2018, 6:43 AM UTC

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)?

Can you specify where you hear him be condescending? Also no bashing of Germany in there, unless you see describing specific mechanisms by which german banks profited from the Greeks, as bashing Germany.

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

#27

Post by cinquemb » Wed, Dec 26, 2018, 7:07 AM UTC

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…

The thing is, he might be pragmatic in his assessment of the situation, but when people press him for solutions (not of the pro Euro, not of the pro "Fascist inc intl" variety) he starts listing things out like people aren't already trying to invest in them as if they will be sure bets, while at the same time saying he doesn't know what the future will hold politically.

Idk, long otm calls on BundGreenInc Intl (esp since the Euro and EU has been sold as being "long europe" the past two decades, its a crowded trade), doesn't seem as much as a sure bet as selling those otm calls and using the proceeds to long deep otm puts on grasshopper trash… but everyone in the mean time will write you off as someone who wants to bring death, destruction and chaos to europe if you don't join in on their crowded trade that people aren't even buying now (because they're buying more of "Fascist inc intl" as he admits).

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

#28

Post by geezerjay » Wed, Dec 26, 2018, 7:34 AM UTC

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…

> 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.

That statement is patently wrong in many ways.

Greece asked the EU and the IMF for help as their long accounting con finally blew in the greek state's face.

Greece benefitted from a huge debt pardon which vanished about half of the nation's sovereign debt.

The emergency loans that Greece asked for were well below market rate and, more importantly, were actually accomplishable, as back then no one in the world wanted to loan billions th a bankrupt state.

And finally defaulting on debt would be disastrous to Greece. Greek governments were piling >10% deficits that were financed through loan after loan. If Greece defaulted then their access to credit would be cut immediately as no one in the world would be willing to lend them the billions they needed and risk not getting their money back. That meant Greece would be forced to cut their >10% deficit overnight, including also the effect of a major recession that would eclipse the one they actually had to endure. If the soft multi-year transition to self sustainable spending provided by the IMF/ECB/EU emergency loans and bailout program was harsh, what would a radical spending cut made overnight be?

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

#29

Post by addicted » Wed, Dec 26, 2018, 7:42 AM UTC

AnimalMuppet wrote: post #23

richardknop wrote: post #17

Earlier quoted context omitted.

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), eve…

Greece wouldn't have been punished, either, except that they were also asking for help at the same time. At least, I don't think they would have...

The biggest reason the EU needed to be stringent with Greece, according to my Greek friends, was that insane levels of corruption in Greek governments meant the government was almost incapable of collecting taxes. Apparently there was a popular video about an area in Athens where the people paid almost no taxes, but an overhead view showed houses with swimming pools.

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

#30

Post by geezerjay » Wed, Dec 26, 2018, 7:49 AM UTC

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…

> I think it’s the exact opposite. He’s speaking from the experience of being in the Eurogroup and negotiating directly with Germany.

The man is a fraud who believed that throwing veiled and not so veiled accusations of naziism at Germany in specific and the EU in general was a reasonable course of action. He is a delusional attention-seeker who had a self-destructive legacy in his stint as head of greece's finances who decided to quit immediately before the result of his actions blew up in Greece's face just to personally avoid being held accountable for his actions.