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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Tsipras’s nonpaper slamming SYRIZA dissenters

The Greek government released the following non-paper earlier today. After the warning shot towards the dissenters of the Left Platform, this time Prime Minister Tsipras uses even harsher words to slam on those MPs that still consider dissenting in tomorrow’s parliamentary vote involving the next set of prior actions.

Tsipras goes as far as warning SYRIZA MPs that “they should not hide behind the security of [his] own signature.” It is definitely an important non-paper, and it creates an even stronger indication that the PM is more than ready to clash with the radical parts of his coalition if they continue opposing him and the agreement [perhaps some stronger actions to be expected, other than merely changing the formation of his cabinet].

You can find the original version of the non-paper here. Below, you can find my own translation.

 

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Tsipras’s warning shot to the Left Platform (non paper)

Last night, the Greek government released a non-paper through which Prime Minister Alexis Tsipras issues a ‘warning shot’ towards the Left Platform of his party, after 32 SYRIZA MPs (most of which belong to the Left Platform) rejected the new bailout deal brought forth in the parliament.

You can find the original document non paper (in Greek) here, and a translated version below.

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The nonpaper by the Greek government on the Bank Holiday

Earlier today, the Greek government issued a nonpaper that provides answers to what they call as ‘FAQs’ relating to the short-term Bank Holiday imposed, starting today, in the country. You can find the original (in Greek) here, and my  translated version below.

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Game of Ultimatums: The nonpaper of the Greek government

Earlier today, the Greek government issued a nonpaper targetted towards the institutions. The nonpaper provides, once again, the well-established (by now) red lines of the Greek government, as well as a scathing attack towards IMF representative Gerry Rice, and an attempt to portray the institutions as having vast differences between them. You can find a copy of the original here. Below, read the translated version.

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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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Call for “rupture now” by the Political Secretariat & Central Committee of Syriza

rrproject

Prominent members of the Central Committee and the Political Secretariat of Syriza are preparing an event for tomorrow, Tuesday 19 of May. Speakers and participants in the event include: Antonis Davellos (SYRIZA Political Secretariat), John Millios (SYRIZA Central Committee), Sofi Papadogianni (SYRIZA Political Secretariat), Panos Lambrou (SYRIZA Political Secretariat), George Sapounas (SYRIZA Central Committee).

Quoting from the event description, as well as the title of the invitation-pamphlet, the message of the event seems quite clear: “the only way out [of the impasse] is the choice of rupture with the lenders.”  

Read the announcement for the event below.

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The speech of Alexis Tsipras at the Economist Conference

Tsiprandreou

The Greek Prime Minister, Alexis Tsipras, delivered a very interesting speech at the Annual Conference event of the Economist in Athens. You can find the original speech, in Greek, here. You can find the translated version from the Office of the Prime Minister, here. Or you can read my own translation right below.

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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