Sunday, April 12, 2015

Yanis Varoufakis and Joseph Stiglitz on Greece and the eurozone

Last week, Greek Finance Minister Yanis Varoufakis and Nobel Laureate Joseph Stiglitz did a presentation at a meeting of the Institute for New Economic Thinking (INET) this past week, Yanis Varoufakis and Joseph Stiglitz INETeconomics 04/09/2015:

The presentation is in English. David Jolly reports on it here, Greek Finance Minister Steers Debt Talk His Way New York Times 04/09/2015:

On Thursday, at a conference of economic luminaries, Mr. Varoufakis was working hard to divert the discussion from Greece’s shrinking financial freedom and fears that it might default. (He had a bit of wind at his back with news that Greece on this same day had just met its deadline for repaying a €460 million, or $491 million, loan installment to the International Monetary Fund.)

Rather than concede any Greek missteps, Mr. Varoufakis wanted to assess the flaws of the eurozone that he said had been revealed by the 2008 global meltdown and its aftermath.
He indulges a bit in pop culture analogy here: "Mr. Varoufakis, 54, comes across as a sort of debonair Mr. Spock, a financial Vulcan of the eurozone. Dressed in a dark jacket with his trademark casual, open-collared shirt, he speaks clearly about the currency bloc’s awkward truths, avoiding the jargon and evasiveness that normally characterizes the region’s dreary politics."

I wonder why Varoufakis reminds him of Mr. Spock?

The confrontation between Greece and Angela Merkel's EU can be expected to continue until the summer, when Greece is likely to face the necessity to default on its debt. By all appearances, Merkel really believes in her Herbert Hoover/Heinrich Brüning austerity economics, "ordoliberalism" in the particular doctrine she follows.

Also, her style of dealing with the euro crisis has been to squeeze as many concessions as possible for her austerity position and wait until the last possible moment to take minimal short-term measures to avoid a collapse of the euro zone. It's a very high-risk approach.

Reuters reports, Greek finance ministry hits back at German newspaper report 04/12/2015:

Frankfurter Allgemeine Sonntagszeitung cited participants at last week's meeting as saying that they were disappointed by Athens' lack of movement in its plans, adding that the Greek representative just asked where the money was "like a taxi driver" and insisted his country would soon be bankrupt.

"When the readers of FAS read the minutes of the Euro Working Group meeting the newspaper will have difficulty justifying its headline and the content of its article," the finance ministry said. "Such reports undermine the negotiation and Europe."
Which German conservatives will read as Varoufakis saying to Merkel and her Finance Minister Wolfgang Schäuble: "Bite me, Germany reactionaries!"

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