Varoufakis: How much did I cost?

Yanis Varoufakis is on the defense. Answering to a host of critics who accuse him of a destructive negotiation process with Greece’s lenders (among them, even his former Premier and friend, Alexis Tsipras, who admitted that while adding considerable momentum to the negotiations in the beginning, Varoufakis consequently became a ‘sinker’ for the Syriza-led government), Varoufakis just wrote a letter explaining how much he really cost the Greek people.

And how much is that? Yes, you’ve guessed it right! According to Varoufakis himself, the cost of his negotiation shenanigans amounts to… zero!

The full article is published in the Greek newspaper EFSYN. Below, you can find my translation of the excerpt available online. It’s definitely worth a read. But, whether one loves or hates Varoufakis, one thing is for sure: his arguments have become increasingly sloppier and his rhetoric more populist than ever before.

 

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Greek government’s post-Eurogroup nonpaper

Shortly after the Eurogroup meeting, the Greek government released a non-paper (labeled as an “Informal Briefing”) imprinting the atmosphere of the Eurogroup talks, as well as the steps forward with the new ESM agreement. The nonpaper is interesting, as it shows an evident change in rhetoric from the one utilized up until now by the Syriza-led government.

You can find the original (in Greek), here. Below, you can read my own (quick) translation of the non-paper.

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New nonpaper by the Greek government, slamming EC President Juncker

The Greek government just released another nonpaper (in the same day!), this time hitting on statements made by President of the European Commission, Jean-Claude Juncker. You can find the original (in Greek) here, and the translated version below.

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Syriza’s Communist Faction call for rupture

The Communist Faction of SYRIZA has initiated a signature-collecting campaign among the many members of the party. In a text to be submitted in the Central Committee of the party on the upcoming weekend (23-24 May) – in the form of a referendum – the Communist Faction is asking from the SYRIZA-led government to “stop paying the lenders-blackmailers” and to “implement the true popular mandate” on which SYRIZA campaigned, and eventually got elected.

Below, you can find a translated version of the text, that has been already signed by 150 members of SYRIZA. The members who have already signed the text hail from different parts of Greece (some are even stationed abroad), and will be asking for the support of all factions within SYRIZA during the weekend.

An important thing to be noted here is the fact that there is no prominent MP or  MEP signing the document, at the moment. It is a small part of SYRIZA’s membership asking for a more radical stance from the government towards the finale of the negotiations.  Nevertheless, coupled with the “call for rupture” by many prominent members of the Political Secretariat and the Central Committee of SYRIZA that was made just yesterday, this only puts added pressure on many MPs and cabinet members that are already contemplating of breaking with the more moderate line that the government seems to be following. (And I say *seems* here, because, given the way the negotiations have played out until today, and considering the recent comments made by Varoufakis and two spokesmen of SYRIZA, it becomes increasingly apparent that the Greek government is taking its haphazard bluff until the very end.)

In any case, here is the Greek version of the Communist Faction’s document, which includes a link to the signatures collected thus far. Right below, you can find the translated version of the text (minus the 150 names). It is a fascinating call for rupture (once again).

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The warlike statement of Syriza’s Political Secretariat

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Statement by the Political Secretariat of Syriza [14 May 2015]

From the first moment that this government was established, it became clear – both domestically, and abroad – that the mandate given by the Greek people is binding and comprises of a compass in the negotiations.

The red lines of the government are red lines of the Greek people, expressing the interests of the workers, self-employed, pensioners, farmers, and the youth. They expressed the need for the country to enter a new path of growth, with social justice and redistribution of wealth at its core. 

The insistence of the lenders in implementing the MoU program of the Samaras’s government, creating an asphyxiating stranglehold of political pressures and financial asphyxiation in the country, comes in direct contrast to the notion of democracy and popular sovereignty in Europe. It expresses the obsessive fixation to austerity that deconstructs the welfare state, the oligarchic direction of European affairs in closed rooms that are unaffected by the will of the people, [and] which pave the way to the rise of the extreme right in Europe.

These requirements cannot be accepted. They cannot be accepted by the Greek people who fought all these past years in order to put an end to the criminal policies of the Memoranda. They cannot be accepted by the people of Europe and by the progressive societies and political powers, who fight for a Europe of solidarity and Democracy. 

The citizens of Greece and Europe are not passive consumers of 8 o’clock news, on the contrary, we believe that they can be co-stars in a negotiation that concerns the common fate of all of us, in the scale of Europe and the world.

SYRIZA will take any possible initiative to inform the Greek people, but also the European people. In every city, in every neighborhood and workplace, but also in all countries of Europe, the MPs, MEPs, and members of SYRIZA will come together with [other] members of SYRIZA and forces of solidarity [towards the party] in a wide mobilization call for the win of democracy and of dignity.

Now is the time for the people themselves to enter the battle. 

We will win.

Original text (in Greek) can be found here.

Photo: Sofokleousin

What Varoufakis said in The Economist conference

Earlier today, Yanis Varoufakis, the Greek Finance Minister, gave the Keynote address to the “19th Economist Roundtable with the Government of Greece”. The topic of the two-day conference is: “Europe: The Comeback? Greece: How Resilient?”

While I could not find a video-taped version of the entire speech by the Minister of Finance, I landed on a video uploaded by Enikos.gr, which contains the better chunk of his speech. It seems that Varoufakis’s comments caused quite a stir earlier today, which led to an angry, official announcement by the Ministry of Finance. (See the end of this post)

As per usual, and given the fuzz created by his comments, I decided to transcribe the video of Varoufakis’s speech. Of course, it is incomplete (I begin at 3:05 of the video above, when V begins to talk about the really interesting stuff, and stop at the end of the video – and not at the end of Varoufakis’s speech). If I find the full video, I’ll make sure to provide a complete translation later on.

Segment of Varoufakis’s Speech at the 19th Roundtable with the Government of Greece [Starting at 3:05 of the video above]

… They often ask me – and I reply in the following way – why we have not finished the negotiation yet: it is because – and I speak personally – as a Minister of Finance, I will refuse to put my signature in such a package [deal] that, from a macro-dynamic perspective, is not dynamically consistent. These numbers do not tie with each other. Because, if I place my signature [in such an agreement], I will be yet another Minister of Finance that signs a medium-term program of fiscal adjustment, which he knows cannot work. And it can be proven mathematically that it does not work!

Unfortunately, on the other side, there is an understanding of this. But at the same time, there are political limitations in accepting it. When they tell you in the corridors and with closed doors that “you are right! But how can I pass this from my parliament?” you understand that we have a problem of consistency of those things that need to be done in order to have the comeback [of Greece, or Europe], and those things that can pass from the parliaments. And here, I will agree with Mr. Letta, that it is an issue of governing Europe. We know it very well that Europe does not have the structure of governance that is required in order to solve such disputes.

But since I want to focus and give more time, as I said earlier, for the discussion – I also have to go to the parliament, and answer four relevant questions today at 11:00 – I will tell you very quickly what I think must be the basis of a solution. Of an agreement-solution, so that the comeback can happen.

The first [thing that is needed], I explained: a dynamically consistent fiscal framework, a medium-term program of fiscal adjustment that has coherence, logic, [and] consistency – domestic and through time.

The second – and let us be clear here – even with divine inspiration and intervention, with someone pressing a button and making our debt vanish, the problem of growth would not have been solved. It would have been helped, but not solved. You know that better than I do.

Why? Our government is determined not to have again primary deficits. But an economy that is on a ‘Great Depression’ – it is not the same as what we call ‘great depression’ in Greek – with such low economic activity, with labour markets that are weathered, and without banking trust, and [even] with primary surpluses from the government, the question is: where will the growth-momentum come from?

It is clear that state assets must be utilized. And here comes the question of what does it mean to utilize state assets. Obviously, I do not mean a fire-sale. I do not mean selling them off in minimum prices – money that you take and throw it in the bottomless barrel of a non-sustainable debt. For us, the utilization of state assets must contain a reasonable mix. On the one hand, of privatizations; in parallel, the state must maintain an equity stake, which will be used as an asset that – together with other assets, primarily of real estate – after the reform on proprietary rights over those assets occurs, they can be integrated in a new development bank that can use them as guarantees, and in coordination with the European Investment Bank (EIB), to leverage them with the goal of creating a flow of investments in the private sector.

And you know, this leveraging via such an investment package that will use the EIB could also be connected with Mr. Draghi’s Quantitative Easing (QE), given that it has already been decided by Mr. Draghi that the ECB will purchase in the secondary market bonds by the EIB.

With the stocks of this development bank to have been conveyed to the insurance funds, as compensatory benefits, as compensation, for the large decrease in their capitalization with the PSI in 2012. And whatever profits this development bank has – or at least, its dividends – could go to the insurance funds. With a parallel reduction – a drastic reduction – of the early retirements and a restructuring of the management of the insurance funds.

At the same time, the banking system must be uncooped from red loans. There is no country in the world where the banking system – and particularly, a banking system which has been re-capitalized by the little the Greek people had, through an enormous loan from our partners…

Nevertheless, the banking system has huge percentage of non-performing loans (NPLs). If we do not find a way to manage those, there is no chance that the banking system will perform the job that it has to do. This is why a company to manage those NPLs must be created – a bank stressed asset management agency, if you will – in coordination with the Hellenic Financial Stability Fund (HFSF). Why does this pillow of the HFSF exist? It exists in order to help the capitalization of the banks.

The capitalization of the banks – to which the Greek people contributed from what little it had – right now loses [and] withers because of the red loans. Obviously, we must do something about that. I have discussed it with my counterparts in France, Spain, Germany, and in Finland with NAMA; and it is clear that there are things that can happen, must happen, but they also need to be part of the negotiation.

In the beginning, I talked about the dynamically consistent fiscal framework that must not begin from 2020 and, moving backwards, decide today what the primary surplus is going to be now. But this means that if we do it properly, and have a coherent fiscal framework, in 2020 the debt is going to be much higher than what the target was. The reason is that it is not sustainable, ladies and gentlemen. Truth to be told, it is time for all of us to say publicly what we say in private. To put it simply, and with a euphemism: the Greek debt must be re-designed.

To give you an example. I am not talking about a haircut! ‘Haircut’ is a bad word, and we have forgotten about it. Even in 2012, we did not call it a ‘haircut’ but a ‘private sector involvement’ or ‘initiative’, something like that. In Europe we are great at producing euphemisms. A few more investments would be more useful [however].

Let me give you an example. In July or August, the Ministry of Finance is going to be called to borrow 6 to 7 more billion euros from our partners, in some way, in order to repay the bonds from the SMP program that was created by Mr. Trichet back in 2010-2011, which are withheld by the European Central Bank (ECB). The remaining amount of those bonds is 27 billion euros, which will have to be repaid in the next months and years, very soon. These bonds – and this is very simple – should be send to the distant future. This is crystal clear. And I think it is also crystal clear to the people of the ECB. Of course, the ECB right now has the great agony of how to continue with the QE against a Bundesbank that is quite negative and hostile. That’s why any discussion about haircutting these bonds of 27bn euros comprises, if you will, [is] a red …

 

Unfortunately, the video is cut right at the best part. I will update the post once I find a full version. After creating considerable confusion in the international community by his comments [or at least, the way his comments were communicated via journalistic channels], Varoufakis issued the following statement through the Greek Ministry of Finance. (via Manos Giakoumis)

MinFin Announcement1

 

Pre-Election Digest #2: Top Greek Articles to Read Before You Vote [In Greek]

  1. Αναζητώντας το Δημοσιονομικό ΚΤΕΟ, της Αντιγόνης Λυμπεράκη | Η Καθημερινή, 18 Ιαν 2015
  2. Πως η Γερμανία είναι ο μεγάλος ευνοημένος της Ευρωζώνης, του Παύλου Ελευθεριάδη | tvxs.gr, 18 Ιαν 2015
  3. Ένα μνημόνιο επειγόντως!, του Τάσου Τέλλογλου | Protagon.gr, 18 Ιαν 2015
  4. Ο καρδιοπαθής και ο παχύσαρκος, του Στάθη Ν. Καλύβα | Η Καθημερινή, 18 Ιαν 2015
  5. Παπανδρέου υπέρ δημοψηφίσματος – διαπραγματευτικού όπλου για Ελληνικό σχέδιο, της Ειρήνης Κωστάκη | VouliWatch.gr, 18 Iαν 2015
  6. Μπροστά στην κάλπη, του Γιώργου Παγουλάτου | Η Καθημερινή, 18 Ιαν 2015
  7. Οι Ελληνικές εκλογές αφορμή για αλλαγές στην Ευρώπη, του Γ. Αγγέλη | Capital.gr, 18 Ιαν 2015
  8. Τα “δυο συν ένα” σενάρια μετά τις εκλογές, του Κωστή Π. Παπαδιόχου | H Καθημερινή, 18 Iαν 2015
  9. Η ώρα του Μουντζούρη, του Σακελλάρη Σκουμπουρδή | Athens Voice, 16 Ιαν 2015
  10. Η παγίδα Τσίπρα και που οδηγεί, του Αθανάσιου Χ. Παπανδρόπουλου | European Business Review, 14 Ιαν 2015