Tuesday, February 03, 2015

Greece to the austerity Troika: Go away!

Now that Greece's new government led by Prime Minister Alexis Tsipras' and his SYRIZA party, with the formidable Yanis Varoufakis as Finance Minister, is off to a running start in its push to renegotiate its debt position and its general relations with the EU, there is what looks like a flood of articles on Greece to someone who has been following it for a while.

Varoufakis is still posting at his blog, as he said he would just after he accepted the appointment. In this one, A question of respect (or lack thereof)… – the Greek veto over Russia that never was 01/29/2015, he addresses a propaganda point austerity advocates used against the Tsipras government, that it was about to become a Russian ally, or something to that effect:

On the first day in our ministries, the power of the media to distort hit me again. The world’s press was full of reports on how the SYRIZA government’s first foreign policy ‘move’ was to veto fresh sanctions on Russia. Now, I am not qualified to speak on foreign affairs but, nonetheless, I must share this with you at a personal level. Our Foreign Minister, Nikos Kotzias, briefed us that on his first day at the job he heard in the news bulletins that the EU had approved new sanctions on Russia unanimously. The problem was that he, and the new Greek government, were never asked! So, clearly, the issue was not whether our new government agrees or not with fresh sanctions on Russia. The issue is whether our view can be taken for granted without even being told of what it is! From my perspective, even though (let me state it again) I am certainly not qualified to speak on foreign affairs, this is all about a question of respect for our national sovereignty. Could journalists the world over try to draw this important distinction between protesting our being neglected from protesting the sanctions themselves? Or is this too complicated?
Wolfgang Münchau (Spiegel Online ) comments that one moment in Varoufakis' week-long career as Finance Minister "ist schon jetzt ein Video-Klassiker der Eurokrise" ("Is already a video classic of the euro crisis"). His link is to this story, Dijsselbloem: “You just killed Troika” – Varoufakis “WOW!” Keep Talking Greece 01/30/2015. Jeroen Dijsselbloem, Finance Minster of the Netherlands and President of the Eurogroup, came to Athens last week and held a press conference with Varoufakis:

The joint press conference was concluding, when Greek Finance Minister Yanis Varoufakis droped a last bombshell. “…and with this if you want – and according to European Parliament – flimsily-constructed committee we have no aim to cooperate. Thank you.” Varoufakis was referring to the famous Troika, the country’s official creditors consisting of the European Union, the International Monetary Fund and the European Central Bank..

After concluding with a “Thank you” Varoufakis gives the word to Eurogroup Chief Jeroen Dijsselbloem, who wants to hear the translation first. Then he takes off the ear phones, he stands up and sets to leave. An enforced-looking shaking of hands delays the departure of the Dutch FinMin.
newsIT.gr Η στιγμή αμηχανίας

Former German Foreign Minister Joschka Fischer, who has generally been supportive of Merkel's austerity regime and for neoliberal policies more generally in the eurozone, is being nominally supportive of Greece's anti-austerity moves. In A Greek Burial for German Austerity Project Syndicate 01/30/2015, he writes:

Warnings of a severe political backlash went unheeded. Shadowed by Germany’s deep-seated inflation taboo, Chancellor Angela Merkel’s government stubbornly insisted that the pain of austerity was essential to economic recovery; the EU had little choice but to go along. Now, with Greece’s voters having driven out their country’s exhausted and corrupt elite in favor of a party that has vowed to end austerity, the backlash has arrived. ...

Though no one can say what a Greek default would mean for the euro, it would certainly entail risks to the currency’s continued existence. Just as surely, the mega-disaster that might result from a eurozone breakup would not spare Germany.
But Fischer seems to be parsing his words carefully. He does not call directly here for the debt relief Greece needs. He talks in general about the need for "infrastructure investment," which even austerity advocates have been conceding for months. Size matters when it comes to infrastructure investment being able to have the needed effect in stimulating eurozone economies. But it's good to see that he also seems to be calling, as Paul Krugman does, for increased infrastructure spending and even increased public debt in Germany as a way to stimulate the overall eurozone.