Red Eric

Here's a transcript of an interview Varoufakis gave to El Pais about some aspects of the past few months - makes interesting reading, in my opinion.

In conversation with El Pais (Claudi Pérez), the complete (long) transcript | Yanis Varoufakis

Garbatellamike

it is very interesting Eric indeed......

i think Varoufakis is much better at writing interesting articles than being a finance minister so maybe he should stick to what he is good at in the future - i.e. writing abstract and esoteric articles in the press that might be mildly interesting.

On a positive note I see that Greece has taken a step forward from his completely disastrous stewardship of the economy with the reopening of the stock exchange. Small steps to repair the huge damage caused by 5 months of inept posturing - so lucky for the poor elements of Greek society that Tipsy finally sacked him - still lots to do and unfortunately they are saddled with more extend and pretend but at least Varoufakis can do no further damage if he is merely writing articles that next to no one reads...

InVinoVeritas

Red Eric

How could anybody pretend that the Greek economy has been under the stewardship of the Greek government during the past 5 months? Or that the damage done to it wasn't done before?

Ok, they lost a gamble - the gamble being that they might actually get a negotiated settlement that would minimise the losses to the lenders and enable Greece to get back on its feet. But it had to be given a go, or they'd have ended up with more of the same (as, indeed, they have but they did try).

I don't know what is going to be imposed if there is a deal at the end of this but I'll bet my bottom dollar that the "poor elements of Greek society", for whose plight all history re-writers are now wringing their hands in pretend concern in order to blame Varoufakis, will remain in extremely precarious circumstances. As indeed they were before the start of all this and would have remained under any agreement that could have been struck - this government was trying to change that, amongst other things. What they now get (amongst all the other crap) is an order to rescind a "solidarity tax" on the wealthiest and remove a pension supplement from the poorest pensioners.

If the months of so-called negotiations and their denouement did nothing else, at least they will have exposed the bailouts more widely for what they are and opened up a future debate on the legitimacy of the actions of the creditors. Varoufakis' predictions / warnings are there for all to see, should they care to take notice and there are plenty on all sides who think he was right on the substance of what he has been saying all along. I, for one, would rather see a eurozone that admits and addresses the faults of the single currency in a spirit of co-operation and development than one hell-bent on punishing "transgressors". A good start to that might have been to budge a few millimeters in a deal with Greece.

InVinoVeritas

Perhaps the fact that the Greek economy had been showing good signs of recovery before the Tsipras/Varoufakis double-act came on the scene. Now it is in free-fall. And please don't say the the EZ was running the show - that is just possibly true before the change of government but defintely was not the case after Syriza came to power.

bigglesworth

Germany would never have allowed that Eric. What would that have said to France? And Italy. And....

Still, the game ain't over till the fat lady sings. Greece needs €100bn debt relief as permanent depression looms - Telegraph
I am not as positive as some, but believe this will unravel before the end of the year. Possibly before the end of the summer.

InVinoVeritas

The most important currency is confidence and there's not much of that left. Throwing billions at a country which is always for looking for easy options is simply not tenable.

bigglesworth

Well I agree IVV, but France has always been a law unto itself!

Red Eric

The Greek economy most definitely wasn't showing signs of recovery before the current coalition took power. That was an illusion created by the effects of drastic and indiscriminate cuts combined with tax increases and non-payment of suppliers, which, short-term returned a primary surplus but which, once the effects fully registered, pushed the economy deeper into recession. That government fell in attempting to impose more of the same on a population that could by then clearly see it wasn't working.



The incoming government never stood a chance. They didn't have proper figures to work from - in fact when they took over they didn't even have computers, light bulbs or toilet paper in the Ministries. I don't know whether it's traditional for an outgoing Greek government to ensure the newcomers can't do their necessities but that's what happened in January. Then they had to deal with the immediate removal of the 11bn bank recapitalisation fund, which they had obviously included in their calculations, leaving them reliant on the ECB for bank liquidity and a copy of Ekathimerini to wipe their bottoms on. The ECB promptly suspended the waiver, meaning bank liquidity came at a much higher price through ELA (cue gleeful chorus from all sides re: "concentration ogf minds"). When they finally got accurate figures of the real state of the Greek finances, not surprisingly there was a yawning gap between the previously reported figures and the reality.

Their first month in office was spent fighting deadlines to get an interim agreement but far from being allowed to get on with things after that, they found their hands further tied by instructions not to alter anything budget-wise until an entire package was agreed - followed by several months of stonewalling by the creditors to ensure such agreement was never reached. All under a ban of silence on airing their proposals and with the threat that altering the budget or releasing details of negotiations would bring discussions to an immediate close. The Greeks complied with their side of the bargain - the creditors constantly leaked and accused the Greeks of not coming up with "credible reforms".


Still reckon the Greek government had free reign?

InVinoVeritas

Well actually GDP went up 1.7% in Q3/2014 which your argument fails to address.

As for missing computers (actually it was a missing wi-fi code), light bulbs and toilet paper I think you'll find this was at the Prime Minister's official residence so maybe Samaras was just a bit miffed that Syriza got into power on the basis of empty promises. I must say when I rented a Greek villa there wasn't any toilet paper either so this is probably normal.

Red Eric

Interesting article - thanks Biggles. Funnily enough, it seems to be saying an awful lot of what you-know-who has been saying for some long time now. What is it you mean by "unravel", though?

Here is something from that article I find particularly and worryingly pertinent to Portugal, with its agreed primary surples and budgetary limits :
There is no flexibility left the next time a bit of financial turbulence hits. The economy is even more vulnerable to shocks than it was pre-bailout. There's nothing much left to privatise (as if privatisations pay any bills anyway, which they don't), wages have been held down in the name of increasing "competitiveness" (but at the same time hitting government receipts) and public expenditure cut to the bone. Without continual growth on an unprecedented scale or debt restructuring, more expenditure cuts and tax increases are inevitable, as is the result of such measures during recessions.

Garbatellamike

You don't have to pretend Eric the facts speak for themselves:

Banks closed
Stock Exchange closed
58 SMEs a day closed
Trust gone with everyone
A primary surplus faked
and lots of posturing and abuse

You score this as 5 months of success for Varoufakis - interesting take and I have to confess that I find it difficult to share your analysis on this.

If he hadn't started lying and reneging from day 1 and actually tried to negotiate and produce realistic and verifiable proposals it might have been different but abusive posturing was apparently his critical success factor.

At least Tipsy has changed course and followed the democratic will of the Greek people to remain in the Euro instead of trying to engineer a disorderly grexit, which appears to be your idol's solution....

He had his 5 minutes of fame and now like most other Z list celebrities can return to obscurity - a moron on a motorbike not the Messiah - sorry to tell you.

Maybe1day

When I was last in the UK (2007) in Reading, there wasn't any toilet paper or light bulbs in the guest house room !

Red Eric

What happens if you take deflation out of the equation that gives that figure?

InVinoVeritas

But it's GDP, Eric. It's like the sales revenue of a company. Deflation, by which I think you mean austerity cut-backs, only affects the budget surplus which is like the profit and loss of a company.