Grexit Daily News – 28 July 2015


28 July 2015  — Should we all kick Varoufakis while he is down?

Today has been a bad day for Yanis Varoufakis. After the revelation of contingency planning for a parallel currency or IOUs or a Drachma precursor, almost the entirety of international and Greek media have homed in on Yanis. Is this correct and should we pursue Yani now to eliminate him politically or even indict him? There have been some private suits against him already alleging criminal offences.

It should be clear to everyone reading my blog that I am hugely disappointed in Varoufakis and I did state at the time of the Greferendum that we will probably live to see the leadership of the current government brought before a special court at some point in the future, if events led to chaotic Grexit.

Nonetheless, this smells a bit like a witch-hunt and I will tell you why. The opposition has been on Varoufakis case for a while now, and it has been hugely helped by Yanis (and his team’s) habit of branding all dissenters as ‘Internal Troika’. For all the protestations of seeking dialogue, Yanis has done a fair bit of insulting people, rather than engaging with them. Anyway, Syriza members (there have been many today, including ministerial colleagues) turning on Varoufakis too smells of opportunism.

How convenient would it be to marginalise Varoufaki and accuse him of everything, absolving Syriza in general and Tsipras in particular. Even though I do not want to see Varoufaki emerge as a leader of some new anti-austerity coalition, I do not want to see Tsipra emerge as the ‘virgin’ in this sordid affair either. It was Tsipras who went to announce the criminal Greferendum and he is ultimately responsible both for the failed ‘negotiations’ and the chaos that followed the end of the programme and the imposition of capital controls.

If we agree that Varoufakis should not (politically) survive this, we should concede that neither should Tsipras.

Also, special courts and criminal accusations never end well, for anyone. There might be things of a criminal nature Varoufakis is responsible for, predominately due to ignorance and arrogance, but his faults are political and ought to be judged as such.

Anyone old enough to remember the 1989 indictment of Andreas Papandreou to the Special Court should get what I mean.

The country did not come out of the ‘Catharsis’ judicial experiment feeling cleaner.

Let us not be distracted from the serious problems of our economy and country by engaging in another round of ‘court drama’.



Yanis has left the building

elvis out

This blog has become a focal point for criticism of Yanis Varoufakis, ever since things started to take a turn for the strange in March (see here for relevant post). I have followed closely the actions and statements of Yani since the January election (and read his work), frequently posting comments on his blog. I have to say here that I greatly appreciate the fact that Yani’s blog posts critical comments and allows a free(ish) discussion.

In response to one of his latest comments (see here), I posted my disappointment in Yani’s failure to take into account warnings, including my own

Sending Yani open letters does not work. If he hadn’t ignored mine ( ) things would have turned out better for everyone.

This prompted the following response by Dimitris Yannopoulos (Varoufaki’s press officer while he was in office)


I don’t think Yanis ignored it and, given the time of writing (April 2015), your letter was quite topical and poignant – prophetic even.

But your argument made the “dilemma”, arising from the creditors’ refusal to budge, even more untenable than that which Yani thought he faced at the end of June:

“Sign on the dotted line” or brace for catastrophic “Rupture”, which he “didn’t have a mandate for”.

Indeed, you posed the dilemma facing “the people” at that “early” stage, in no less fatalistic terms:
“The people must choose whether to become a German protectorate to maintain a semblance of normality, or to revert to emerging economy norms with living standards akin to 1970s. There are no good choices here, but the choice is not yours to make.”

No wonder the choice you recommended to Yanis in your April “letter”, was almost identical to the cowardly cop-out stance taken by George Papandreou in late November 2011, which, BTW, so enraged the “Merkozy axis” that they swiftly brought up the illegal “Grexit option” for the first time – after publicly vilifying and humiliating GAP at Cannes:

“Sign, live to fight another day and call an election so those who face this horrible choice get to make it”.

In other words, bow to the creditors’ diktat to win their favour and save your hide “to fight another day”. But afterwards, feel free to give Merkozy the “finger” and leave the “horrible choice” to the people whose mandate you had just betrayed with your signature.

BTW, this shows why Tsipras’ decision to go for a referendum on July 5 without signing anything, was the honourable and prudent thing to do, declaring beforehand his intention to resign only in case of a YES vote.

But was that really the dilemma which Yanis confronted back in April, i.e. at “midterm” of the loan agreement’s 4-month extension?

No way. Nevertheless, you’re right, neither he nor Tsipras had a direct mandate for “Rupture” – meaning default and Grexit.

But the question is, did the “other side” in the “negotiation” set-up (the German-led Eurogroup/ECB/IMF Axis) have a mandate – let alone a right – to breach their February 20 Eurogroup Decision and launch an Act of War against Greece, which they actually declared (or “confessed” in no uncertain terms, to test Greek reactions) in mid-March?

They even gave this Hostile Act a name reminiscent of Abu Ghraib and Guantanamo: “Credit Asphyxiation” (by means of multiple ECB/BoG/ELA liquidity caps), threatening Athens with domestic default, slow-motion bank run and ultimately bank closure, i.e. the gradual implosion of the Greek economy that lasted four full months before the ECB resorted to a total ELA liquidity support ban on June 28.

Was there no other moderate, legitimate and timely reaction to such a reckless “crime against humanity”, as Yanis called it, than Sampson’s “Rupture” or a continuation of the negotiation charade?

To make the culprits think twice before bringing an economically ravaged country to its knees, all that was needed was the mere threat of a unanimous Appeal signed by all Greek Parliament MPs as well as Euro-MPs, parliament parties, the Prime Minister, the House Speaker and the Greek President, to their counterparts in the Euro-Parliament, European national parliaments, the European Court of Justice, the International Court at The Hague, the UN General Assembly, the UN Security Council or – why not? – the Self-Righteous Holy German Constitutional Court.

The Appeal would call for an immediate injunction and/or protection from historically unprecedented forms of blackmail against a helpless European nation deprived of all monetary “defense policy” instruments.

The Appeal could also have requested the EZ bailout “negotiations” to be placed under the aegis of any or all of the aforementioned institutions, especially the Conference of European Parliament Presidents that thrice attempted to assume that role but was vetoed each time by EP president Martin Schulz.

Now, thanks to the much maligned audacity of House Speaker Zoe Konstantopoulou, who formally denounced them before a Greek Parliament plenum, neither the Act of War, nor the subsequent Acts of blackmail, ultimatum, coup d’etat or the fresh troika MoU carnage etc. have been irrevocably legitimised by the Greek Assembly – leaving enough room for their summary annulment at a future date.

But their implicit legitimization for no less than four months was a real and major – if not the only – cause of the Greek negotiation failure.

Now, I never much believed various conspiracy theories presenting Varoufakis as a dangerous lunatic surrounded by fanatics. Nonetheless, comments such as the above are forcing me to reconsider.

What do Varoufakis and Yannopoulos think they are dealing with? While the rest of us are trying to think about the future of the country and the survival of the Greek population, Syriza members such as the above seem to be engaged in some sort of exercise in nationalism and ideological blindness.

I have been there Mr Yannopoulos. When I was a young student (in Essex Uni of all places) I used to go to Socialist Worker meetings. I stopped going when it became obvious to me that the creation of a ‘just’ society required the obliteration of the existing society. It seems that Syriza has not escaped the teachings of KNE (Greek communist youth) that society can only be reformed by razing it to the ground.

Yanis Varoufakis will not be the Greek Pol Pot.

Whether the latest reports of fantastical plans to secretly prepare for the drachma are true or not (see the summary by Dixon here), we now know enough to stay clear of Prof. Varoufakis and his comrades in the future.



Grexit Daily News – 23 July 2015


23 July 2015  — “I am become death the destroyer of worlds”

It has been a while since I posted an entry on GrexitDailyNews. I was waiting to see how the agreement on Bailout III will be received internally and externally.

It is safe to say there is little joy and little hope that any resolution to the Greek problem is in sight. I have addressed this in various ways in the last few days, even trying to see things slightly more optimistically (see here).

What I want to focus on today is the apocalyptic effect capital controls are having on the economy. It is needless to say how damaged the economy became since the election, due to the almost total disinterest of the government while it was valiantly negotiating win our ‘enemies’.

Capital controls are killing economic activity. In an environment where manufacturing is entirely dependant on the import of raw materials the inability to make external payments means production has stopped. Weeks after the introduction of controls there is no mechanism in place to authorise payments.

The significantly reduced cash flow and the vertical drop in consumer sentiment are chocking the life of any SME still in operation. Capital controls will stay in place for a long while, as bank balance sheets are significantly impaired. Certainly they cannot be lifted before the banking resolution legislation comes into effect in January. Does anyone seriously think that there will be any solvent businesses left if this keeps up for a few more months?

You know all this already, so why do I bother saying it again? The reason is I am angry. Angry that we keep fighting over VAT increases for the islands and tax cuts for farmers while the economy is dead. Angry that we keep listening to the ‘democratic’ rants of this fiend Kostantopoulou and the soviet nonsense of Lafazanis. Angry that we have to watch Varoufakis become the standard bearer of fantastical revolutions. Angry that we have to watch that dangerous fantasist Kammenos fly around the country spouting nonsense.

When Tsipras caused the uncontrolled bank run that necessitated capital controls by announcing the Greferendum, he became our Oppenheimer, the destroyer of our world.



Liberté Egalite Fraternité and the need for a Guillotine


In all this doom and gloom about the Greek situation it is very difficult to think of a message of hope, something that can offer a better, brighter future for Greece beyond the endless austerity of the Bailouts and the chaotic disintegration of Drachmageddon.

Where could a message of hope come from? It is my belief that accepting failure can lead -at long last- to a change of culture. This sounds a bit like Yoda speak, I agree, yet Greeks have not accepted that our culture, our economy, our political system has failed. And failed we have! I have spent a number of posts on this blog explaining the various ways in which Greece has failed. Let me just offer one anecdote that illustrates everything I tried to convey before.

In 1999 I was a student at the Athens Law School (on Erasmus exchange from the University of Essex where I studied for my degree). During the year I met a lot of “knites” Communist Party youth (like Tsipras used to be at some point). While we studied in a university where stray dogs slept in the lecture theatre, people plastered posters on the blackboard while the lecturer was giving a lecture, kids were selling roses and tissues during the class, we could not access the library without a letter from the lecturer AND where we all studied from the same (provided) texts, the knites were lecturing me on how unlucky I was to be studying in Essex, and that Greek Universities were the best in the world. It is this type of imbecility and wilful blindness that characterises the Greek view of themselves and the world.

Once we accept that we are to blame primarily for our troubles, then we can begin the culture shift that will allow us to belong to Europe. The Europeans do not hate us because we are so clever, have such great history and such nice beaches. Capitalism is rough, but resistance is futile (yes I said it, TINA – Thatcher will be smiling in her grave). We have no friends and no allies left to do pretty much anything, nevermind build a socialist utopia. But what do I mean by a change of culture? We need to start displaying solidarity with each other and get down to work. Work may be along capitalist lines, along the path drawn by the Germans etc, but this is the only way. Have no illusions, the drachma fantasies of Lafazanis and Lapavitsas will require even more work. What does this work entail? To stop trying to be ‘magkes’ (wise guys), to stop trying to game the system, to stop treating those who play by the rules as ‘koroida’ (shmucks).

How does a country with such illustrious legacy of cutting corners, faced with such an impossible mountain of adjustment measures even make a start at reforming? We have no choice but to take one day at a time, and at the danger of sounding like Nick Clegg (who?) we need to accept there are no left or right ideas, there are good and bad ideas. A good idea (from the right, but still good) is the idea of a regulatory guillotine (see here, no relation with the ™ version).

A significant part of the structural measures the lenders want to ‘impose’ on the Greek economy have to do with increasing competitiveness and productivity, and with improving employment. Yet every single measure is met with a wall of resistance from vested interests. Now, don’t get me wrong, vested interests may serve a purpose, they may protect hard won rights. My Union protects my vested interests as an academic. However, many ‘rights’ and interests are so rigid that are sinking the country in favour of small sectional interests. Tsipras even had to promise to liberalise gyms. Gyms you say? That’s right, gyms. In an economy so sclerotic as the Greek one we cannot even take advantage of the gifts nature has given us. We sell 60% of our olive oil to the Italians to package and sell to foreign supermarkets. This does not sound like a great idea.

What does sound like a good idea is to subject EVERY rule and regulation that has to do with services, goods and market access to a regulatory guillotine. The idea is to identify what each rule and every aspect of the bureaucracy is there for. Once the purpose is identified (if there is one) then an assessment will be made as to whether this rule is serving the interests of Greece’s progress. I am not taking the neoliberal view that all and every regulation is bad and ought to be done away with. What I am saying is that we should identify the interests behind the rules and make decisions as to whether their continued protection is in the interests of society as a whole. Should hairdressers be protected? If their continued protection (from competition) serves to maintain employment great, if not, protection should go.

You may argue that all these things were proposed before. Indeed Yorgos Papandreou came armed with a series of similar ideas and failed to implement them. Perhaps this was because PASOK is the big mama of sectional interests (they now defend the rights of farmers against the bailout laws). Still, we need some hope for the ‘modernisation’ (a Simitis concept you may say, but whatever) of the country.

Tsipras and Varoufakis gave hope but reaped havoc. Maybe we can give a chance to ideas in a different direction and see what happens.

dinner de con


Wolfgang Schauble, the hero of the Greek austerity crisis?

What do Drachma lovers have in common with Schaeuble? Perhaps a lot more than you think…

Real-World Economics Review Blog

from Dean Baker

Like many people following the negotiations between Greece and its creditors, I was inclined to see Wolfgang Schauble, Germany’s finance minister, as the villain of the story. After all, Mr. Schauble insisted on severely punitive measures for Greece as a condition for continuing support from the European Central Bank (ECB). He appeared to be the bad cop relative to others in the negotiations, such as German Chancellor Angela Merkel, who was willing to make at least some concessions to keep Greece in the euro. But a more careful analysis arguably leads to the opposite conclusion.

Schauble did not argue for throwing Greece out of the euro simply as a punitive measure, although he quite obviously disapproved of the way Greece had run its budget and its economy. He argued, quite possibly sincerely, that at least a temporary departure from the euro zone would be the best path

View original post 686 more words

On Syriza and ‘Populism’

It is common (as it was in the past) to brand Syriza as populist. In fact it is common to brand as populist every left wing force that comes close to achieving a position of influence. A message that is not ‘orthodox’ or mainstream it seems can only be populist. I participated in this ‘convention’, even though I was consistently critical of orthodoxy. In my 2013 book I wrote:

In the two elections of 2012 a pro-European (presumably pro-austerity) coalition of parties narrowly prevailed because the population feared the consequences of a Grexit more than they hate the austerity programme. During the latter part of 2013 with further evidence of unending recession (and money running out for hard hit consumers) perhaps people begun to feel they have less to lose from a Grexit than initially thought. The main beneficiary of such despair will be the populist left wing Syriza coalition which pledges an end to austerity funded via endless support from the EU, obtained apparently through blackmailing the European institutions with the threat of a disorderly exit from the Eurozone.

I was forced to challenge my pre-conception of Syriza as ‘populist’ after reading Tsakalotos work. He has complained that a blanket accusation of populism serves to avoid discussing the real issues put forward by the left.

laskos&tsak Soundings, 2014, Vol. 57

Influential European public intellectuals such as Jürgen Habermas have in the past fought for the creation of ‘public spaces’ to accompany, and to counterbalance, the common market and monetary union. Habermas has been particularly critical of Europe’s experiments with constitution-making, especially with respect to the Treaty of Lisbon, but more recently has withdrawn to a more conservative stance, perhaps fearing that mass mobilisation in current circumstances can only mean a return of nationalistic and populist currents. Other public intellectuals, such as Etienne Balibar, have insisted that the fight for democracy and against nationalisms within Europe must be based on popular mobilisation; nothing less than the creation of a European people is called for if the hollowing out of democracy is to be reversed. SYRIZA’s strategy, which sought to appeal to labour in both the South and the North, was an attempt to reconnect the left with such a democratic aspiration.

I decided therefore to give Syriza the benefit of a doubt and I argued in 2014 that we should be cautious when using the populist label.

EJLR cover

The financial crisis has reinforced the notion that a financial capitalism disconnected from the real economy and the interests of society is a dangerous and unsustainable development. Alongside this realisation there is a growing perception that the ‘technocracy’ that has been a response to the crisis in many states leads to a progressively less-democratic capitalism which is unsustainable. The cornerstone of technocratic, supposedly apolitical policy making rests on the suggestion that de-politicised economic decision making ensures long term stability and has been critically reinforced by the financial crisis. However, such a move to cement the dis-embeddedness of the economic from the political creates both unmanageable discontent and is self-defeating. Responses to the crisis have been dominated by the desire to erect legal barriers that separate the popular will from economic decision making. The last five years have been dominated by efforts to do the ‘right’ things (from a neoclassical economic perspective) while keeping at bay the ‘populist’ forces of resistance. While we can debate the extent to which the law caused the problem (by its presence, or most likely through its absence), we can agree that the law is much present as part of the solution, but in unanticipated ways. Law is there not in efforts to re-regulate or control markets, but in establishing firewalls between politics and economics. It is surprising that a crisis that shares so much with the Great Depression ended up in causing further desegregation of the economic from the political (with law as the tool), in total opposition to the movement for greater social embeddedness of market processes that was the response in the 1930s. This is not a development to be content with.

What is the result therefore? Is it right to brand Syriza as ‘populist’?

My entire work has been built around the idea of allowing more democratic input into economic decision making. While I never offered any solutions (I admit to that) neither in my examination of Russia’s experience of post-communism, nor in my reflection on the financial and European crises, I consistently argued that a technocratic capitalism that runs on an orthodox auto-pilot is unsustainable and wrong. What would be right (even if we do cannot know what solution the people will choose in advance) would be to offer the people the choice.

If this is what my research led me to, why did I oppose the Greferendum? Wasn’t this an opportunity for the people to choose the nature of their state, the mix of their economy vis-a-vis markets? The answer is that democracy and choice are only possible when the politicians (and in the Greek instance currently this includes Syriza) offer competing visions of a political-economy for people to choose from. If people are asked to choose, but the choices are wholly, or partly, fantasy, then the choice is not democratic, the outcome is populism.

I resisted the call for the Greferendum and I have turned against Syriza because my initial fear (when I was writing the book in 2012) turned out sadly to be correct. Syriza is populist, it offered no alternative to the organisation of the market-state relationship other than a return to the 1980s funded by others. For all the insightful writing of Varoufakis and Tsakalotos, Syriza offered a populist lie, and to add insult to injury, put this lie to a referendum.

Syriza turned out to be both populist and wrong.



PS. Dear Reader, please use the comments section below to offer your thoughts. All comments are accepted, so long as they do not contain links I cannot verify (I am trying to keep users from catching viruses) and do not contain offensive remarks. This blog is an opportunity for me to reflect on my work and to share my thoughts with others. The discussions on the comments pages are the best thing that has come out of writing the blog. Thank you for your contributions.