Grexit Daily News – 14 July 2015


14 July 2015  — J’accuse Varoufakis

We have a deal, but we do not have a solution. The Eurozone-Summit has agreed after a marathon session to begin negotiations on a third bailout for Greece yesterday morning. In the ugly events of this weekend, the gloves came off. Schäuble asked openly for what he wanted all along (Grexit), France and Italy admitted that Grexit means Euro-disintegration and Tsipras admitted that he failed. Juncker said there were no winners and no losers in this deal. On the contrary, I would say

There are no winners, only losers

An interesting development has also been the emergence of Prof. Varoufakis as a leader-in-waiting of a revamped anti-austerity/anti-memorandum movement. Varoufakis admitted that he wanted to ‘own’ the OXI of the referendum and push for rupture. He told us that there was some Grexit contingency planning at the ministry. Of course there should have been some contingency planning for a Plan B (or Z), it would be silly to suggest otherwise. The problem is that these admissions negate everything Varoufakis has been telling us so far.

Varoufakis has no claim to the anti-austerity mantle

Varoufakis carries such significant responsibility for the disastrous outcome of this government of horrors of the last 6 months, that the idea of him now emerging as a leader of anti-memorandum protests is an affront to every Greek and every thinking person out there. Not everything is due to Varoufakis of course, and his removal at an earlier point may not have fundamentally changed the trajectory of events. What I am arguing here however is that Varoufakis made things worse and does not deserve to come out of this pretending to be some sort of anti-austerity super hero.


Let us take a short trip down memory lane and revisit the Professor’s achievements. Varoufakis met meet Mario Draghi, the ECB president, in Frankfurt on 4.2.15 hoping to persuade him to maintain liquidity to Greece’s banking sector even after the country’s EU bailout programme was due to expire at the end of February. To avoid squeezing Greece’s already tight liquidity situation any further, Draghi needed to agree with Varoufakis not to pull the plug on Greece by changing the collateral rules. In this Varoufakis failed (see here). You could choose to blame Draghi for this, or you could blame Varoufakis.

After the programme was extended with the Eurogroup 20.2.15 agreement, Varoufakis was supposed to send a list of detailed measures that would allow the completion of the review (ending the second bailout agreement) and permit the disbursement of funds. Varoufakis did indeed send a list of proposals. It was the famous document promising tourist tax inspectors and revenues through the taxation of online gambling (see here). This was not accepted (surprise suprise). Who shall we blame for this? I am thinking Varoufakis.

By Mid-March it was obvious we were heading for an impasse. My impression was that Varoufakis would have to face another Eurogroup showing dire fiscal results. The deflationary-recession dynamic seemed intractable. The inability to seriously fund measures to addresses the humanitarian crisis was already making this trend worse. I presumed that the Eurogroup would respond to this in the usual way, by demanding fiscal consolidation measures including pension and wage reductions. I expected that Varoufakis would pull the nuclear card and threaten a referendum on Grexit. Then either the Germans blink or all hell would break loose (see here). All hell did break loose but later on in July!

On 19 March Tsipras had a leaders meeting (see here) that led to the following realisations:

  1. A significant fiscal gap was developing (primary surplus gone) due to abysmal tax collections and arrears.
  2. There were no money coming from the Bailout Package till an evaluation took place.
  3. Greek commercial banks could not draw liquidity from the ECB to purchase Greek Bonds, as they were no longer accepted as collateral by Draghi.
  4. The Greek commercial banks could not draw ELA liquidity to purchase state Bonds because a) ELA was kept at minimum levels and used to cover losses from a slow motion bank run in progress and b) the ECB was about to formally prevent the BoG from allowing credit lines to be used for the purchase of state bonds.
  5. The interim bailout extension agreement did not allow Greece to use the bank bailout fund for other purposes (meaning for its liquidity needs).
  6. There would be no interim aid or credit lines from the ‘ex’ Troika so long as Greece did not present a package of structural reforms.

By the middle of April, I had lost all hope that a ‘good’ deal could be achieved. I urged Varoufaki to finish this protracted negotiation and sign whatever there was on the table before things got worse. It was vital at that point (see here) to secure the release of the bailout money and after the immediate liquidity problems are addressed, I urged the government to resign and call an election. The reason for an election was that Rupture and Grexit needs to be an explicit choice. 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 were no good choices, but the choice was not Varoufakis’ to make.

There were hints in May that we were heading for a referendum. It turns out that Varoufakis was a supporter of this idea all along. But this referendum was not to be about Euro-membership as one would think (see here). If the referendum would not be about Euro-membership, what would it be on? Alexis Mitropoulos (Parliament’s deputy chair) proposed (in May) a referendum (taking Euro-membership as a given) on whether the Greek public would like continued support from the lenders on their terms, or on Syriza’s terms. Effectively, this is like going to a restaurant and having a poll on whether to pay for your lunch or not. This would be laughable if it were not serious. Mitropoulos’ farcical idea shows why the government was considering a referendum:

A referendum aimed to legitimise rupture and blame the Europeans for the consequences, absolving Syriza.

I said mid-May (see here) that for all the grand rhetoric on Red Lines and Electoral Promises and Mandates, Syriza had managed to back itself into a corner and blackmail itself into submission. Like Mel Brooks’ sheriff, it was threatening to shoot itself in the hope the likes of Schaeuble blink and pay up. They would not, and did not eventually. By that point anyway the liquidity situation had become so critical (see here) that the government had to turn out the pockets of the entire public sector and state sponsored enterprises to get together the funds to pay pensions and public sector salaries. This served to hide the internal default that was taking place. There was anecdotal evidence of state suppliers, contractors, various types of employees going unpaid. While Syriza was preaching against the lenders vowing to default on the ECB and the IMF to protect the Greek workers it was already failing to pay large proportions of people dependant on state disbursements. I wondered, whether it was a good idea to avoid a credit event in May, yet spark a run on the banks if people panic? People did panic of course.

Varoufakis tells us now that he had a team in the Ministry looking at Grexit. Why didn’t he ask Lapavitsas who has been working on the details of a Grexit scenario for years? Perhaps he did not (or is not telling us about it) because as Lapavitsas is bound to have discovered, before Grexit leads to recovery it will entail years of chaos. I kept asking (see here) but got no response: How does the left faction and all those prideful Greeks intend to deal with the effects of Grexit? What will the government do with the banks? How will it buy essentials, how will it pay salaries and pensions post default? It was time to cut the nonsense about Greece’s geopolitical significance and talk specifics. Specifics never appeared.

By mid-June it became clear (after the breakdown of negotiations with creditors) that Athens has planned its strategy taking a page off Abu Bakr al-Baghdadi’s book. The strategy it seems was to blackmail the Europeans by threatening to blow up the Euro. This was less ‘Kougki’ (blowing oneself up, rather than capitulate) and more ISIS, blowing oneself up and everyone around you. The problem was that there would be no happy ever after, rivers of milk and virgins for Greece if this type of grandstanding resulted in a disorderly default and Grexit. I kept saying (see here) that Varoufakis was right to complain that the ‘programme’ was wrong and recessionary. Nonetheless, he was right in his analysis but wrong in his approach. This is not an all or nothing game, a deal would allow improvement in the future. All this kougki nonsense had to stop, I said, unless of course Varoufakis has come to Lapavitsas side and wanted Grexit. His support for the referendum showed that he DID want Grexit.

Varoufakis did manage to do one thing at the end of June. He sent a comprehensive set of measures to the Eurogroup, measures that were rejected by the IMF as being too recessionary (see here)! Why was the package so hard? One could argue that this was because 5 months have been lost haggling, with the result that the economy deteriorated, so that more effort was needed to ensure that the target of a (even reduced) primary surplus is achieved. The end result was that this was a package that was clearly antithetical to what Syriza stands for. A package that could maybe get a deal with the creditors, but it satisfied no-one. Considering Varoufakis comments of the last couple of days, on wonders whether that was a serious proposal, or was it designed to provoke confrontation and a Syriza revolt (as it did)?

On June 26 Tsipras announced his criminal referendum, with the support and encouragement of Varoufakis. This vote was not on Tsipras’ laughable suggestion that we should vote on a non existent, not available, foreign language, unintelligible technical set of documents. The vote was on choosing whether the country should seek its future as part of Europe or whether it should degenerate into some sort of Balkan soviet, run by fanatics and ideologues that set out to exterminate the very people they seek to save. I argued (see here) that

believing Tsipras (about the ‘Greferendum’) is equivalent to joining a cult. You think your pride is winning and your sovereignty is ascertained, while you are being robbed and raped.

I went on TV to decry the farcical referendum and offered a post arguing that (see here) Varoufakis was lying to the people. Greece would not stay in the Euro if the vote is NO. The banking collapse that would follow would necessitate the issuance of IOUs that will fundamentally undermine the country’s position in the Euro. The bank closures were the fault of Mr Tsipras who caused a bank run with his referendum announcement. For Varoufakis, the country’s place in the EU is non-negotiable, yet leaving the EU is the only way to leave the Euro which Varoufakis himself will need to ask for in order to recapitalise the banking system, I said.

The only reason this did not come to pass, was the agreement achieved on Monday. An agreement that is a nightmare for the country, but the only alternative to a chaotic Grexit for which Varoufakis has no preparation at all. Let me reiterate:

Varoufakis did not cause Greece’s problems, but made them worse and risked the destruction of everything. He does not deserve to emerge as the OXI champion of virtue.

The fact that he chose to spend last weekend with his family in Egina, rather than show his face and vote his mind in Parliament further negates any claims to higher-moral ground. I feel personally betrayed by his months in office, believing as I had that he would achieve something sensible and good.

Greeks should listen to Varoufakis no more, he had his chance, he failed us

game over



39 thoughts on “Grexit Daily News – 14 July 2015

    • Bad choices are not treason, and I do not doubt that he had the interests of the country in mind. The problem is that he committed serious errors. He cannot now run some under-cover opposition movement. It is not fair to the country.


      • Obviously it was just a provocation. I found the article about High Treason and there is nothing related to his situation.

        As I wrote in my comment under his post (not approved as all my other comments on his blog): “You, Yanis Varoufakis, became an important icon for thousands of Europeans. You are now in the condition to shake what is wrong with Europe. People look at you as a leader, because you speak straight and do not show yourself accomodating.
        But unfortunately you decide to waste your charisma in a personal crusade against the EU in general and Germany in particular.”
        I don’t know why, but I think he COULD do something really good for Europe, if he wasnt’ mean, of course.


      • Nigel Hamlin says:


        I’m digesting your article (above) – need to re-read it at least one more time. But at this point I would like to observe that it does not seem to be written in the sort of style I would normally expect from someone with the level of academic qualifications and positions that you hold. In fact, in the UK (with which you are familiar, I see) one might describe your style as almost “sensationalist tabloid”!

        Wouldn’t the prevailing situation benefit from rather more intellectual aplomb? If we want sensationalist commentary, we have the politicians and the mainstream press for that! What’s need right now is some serious, in-depth intelligent discussion, not only on what should happen with Greece specifically, but also Europe in general. It all needs fixing properly, at the end of the day.


      • Thank you for your comment. Indeed the language in this blog is informal, as it aspires to communicate with a wider audience. What I am saying in this blog I have also published (in a book) and in articles. These unfortunately are behind paywalls, but free extracts can be found here:


  1. Arek says:

    Putting aside deliberations on the actual crisis development it is crystal clear Greece will never, ever be able to repay its debt unless it is subject to haircut. Simple reprofiling or lowering interest, etc will not help. In this regard Mr Varoufakis is right saying that Greek debt is un-payable and unsustainable. Simply because under no scenario your GDP quantum will be good enough to produce sufficient primary surplus to service debt (principal + interest).

    It is true Greece should have reformed its economy long time ago, this is a major accusation loudly heard everywhere in Europe. But reality is even though you go down this route and comply with all Troika requirements, having Euro as the currency you are doomed, unfortunately. And the reason is a structural inefficiency of the Greek economy, having eternal deficit of current account balance without opportunity to manage your own currency I am afraid all painful reforms you are about to undertake will be in vain.

    I am sorry for you, but as a nation you have become a vicitim of insatiable greed of the banking cartel that framed you into Euro mirrage. A short look at a trade balance by country since Euro introduction make it crystal clear who is the real beneficiary.

    If I were you i would have thought twice before making up my mind what’s ultimately best for my country. Good luck, you will very much need it.


    • Nigel Hamlin says:

      Ah yes, and in that sense at least, it does seem that the IMF are in complete agreement with both you and Yanis – the situation is unsustainable without much greater debt relief. So much so, in fact, that in the circumstances, the IMF will not be able to provide further funding without the issue first being addressed.


      • Arek says:

        You should not have adopted Euro having structural issues with the economy. Assuming your debt is cut to the bone (100% haircut) it is only a matter of time before Greece will have to borrow money to cover its trade deficit. Smart currency devaluation could help for a while, but utlimately debt will start to accrue. This is how it works (I am simplying of course to provide a big picture).

        It is ironic IMF is trying to play a white knight now having had a profound knowledge of the Greek economy structural problems for years.


    • Just to say, on the irony of the IMF “playing the white knight”, it was apparently the case that everyone involved in the weekend’s shenanigans – EUco and the leaders’ summit – KNEW about the IMF’s position on the necessary debt relief levels well before the weekend, yet they all chose not to address the issue despite its rather fundamental nature. Was that because, even having been advised, they didn’t understand, or did they just deliberately choose to ignore it – and if that latter, then why?


      • Arek says:

        Simply because neither EC nor EBC wished to create precedence allowing for debt relief. If this happened Spain, Portugal, Italy and others could be next in the row. That’s the only reason in my opinion. I cannot believe Germany and others did not do the math, it is obvious like a sunrise tomorrow.

        IMF was and will be in a comfortable position as the non-European body. They can play a good cop role in this game of pretending and extending.

        My point is that Euro adoption in Greece should not have happened due to reasons I have already mentioned. Now the milk is spoiled, but Greece still can decide what’s best for its future. I will keep my fingers crossed for you due to invaluable historical heritage and hospitality I experienced while visiting your country. At the end of the day it is all about (at least should be) people not money. The latter you can earn, borrow, mint, issue, steal, whatever……..there are many options. However there are 2 things you cannot by with any money………the health and people’s respect. This not all gold that glitters.


  2. Could someone care to explain in a few words what happened in the last 10 days, probably I am a bit slow and fail to understand.

    From my understanding and the English translated media that I have read I was able to gather that,

    1) The Greeks voted “No” to existing austerity measures and all terms which were being imposed on them for the debt, and gave full support to Tsipras to negotiate Greece out of this debt mess.

    2) However what finally happened on Monday and for which Tsipras was also seemingly happy is he agreed to more difficult terms than of which the people were supporting him against, almost like selling the people’s trust and the authority given to him to negotiate and put the people into a deeper hole.

    Is this the accurate read on the situation in the past 10 days? or this is a misunderstanding of what has been communicated in English print media.


    • I think you have it about right. Tsipras held a referendum on austerity, under the false premise that Euro-membership with a non-austerity option was possible. In this he deceived the Greek people. He then agreed to a much worse deal that was on offer in June, or March, or February. My #GrexitDailyNews posts chronicle what happened


      • Yes, but quite why Tsipras ended up agreeing to the “much worse deal” – and whether or not that deal will actually hold – remain to be seen. In the meantime, we must stop saying that continued Euro-membership without austerity is not possible, when quite clearly it is not only possible, it is mandatory and essential! So it has to be MADE possible – if it means changing rules, then so be it. If nothing else, it’s the identification of this deficiency in the “rules” – along with the raised likelihood of this deficiency, and others, finally being addressed – that seems to be the most valuable outcome of the past weeks.

        One would like to think that was an intention on somebody’s part!


  3. Ben says:

    A very well researched and objectively argued counter-narrative to the ‘All Hail Varoufakis’ mania that is sweeping across Europe’s left.

    Varoufakis’ negotiation strategy was a disaster – he has a lot to answer for. By his own account, he knew from February onwards of Schaeuble’s plan to reinstate fiscal discipline into the Eurozone’s Club Med through Grexit. In THAT light must we judge Varoufakis’ subsequent steps: if anything, his uncompromising, dyed-in-the-wool anti-austerity attitude led to Schaeuble’s stance hardening, making a compromise all but impossible.

    A leader cannot remain ideologically committed to an intellectual position – e.g anti-austerity – when it clashes with a political reality which prevents your position from becoming reality (namely, a power imbalance: Deutschland > Hellas, sorry to break it to you, Greece. Varoufakis had months to push for an alternative outcome, instead he relentlessly marched Greece toward its doom, messiah-like in his conviction, magnetic in his charisma, and fooling an entire nation in the process.

    Shame on him and academics of the Krugman school who excel in ivory towers analyses, but confuse their modelised accounts with the rough and tumble of real world politics.

    Liked by 2 people

    • Ben,

      But what is one supposed to do when those real-world politicians have made such a mess of things from the outset and themselves persist with their vain belief that it can still all be made to work? Which, of course, it cannot. What then if you do happen to be one of those who actually does understand the economic ramifications of the mess, but then even when you explain that to them, the politicians simply dismiss you as someone who “just doesn’t understand how our real-world works”?

      Reminds me of the politicians that say we can’t address the climate change threat if it’s going to have a negative impact on our economy. But if they don’t address it, they won’t any longer HAVE an economy to worry about!

      In any case, it’s nothing more than a hi-jacking of the term. Surely the real-world is the one where truth prevails?


      • Ben says:

        Climate change is a good example of how real political transformations are achieved: not through heroic one-man battles against the odds, but through patient, incremental, hard-won diplomatic negotiations. Just compare how far the US has come since Copenhagen: a deal with China to limit carbon emissions, the deal with Brazil about reforestation, the Keystone XL pipeline (which matters symbolically) stopped… Things CAN change for the better, but it takes canny, savvy political strategy to do so. Obama is in another league from a sanctimonious fool with an over-inflated sense of self importance like Varoufakis. Understand an issue is the arguably easy part, it just takes objective research and honest analysis to arrive at insights into given problems.

        To turn that from theory into practice is the true art of politics. Because politics is all about finding consensus amid a diversity of interests. Some people oppose acting on climate change because of narrow minded selfish misguided views. So do you just attack them publicly? Or do you try to build quiet, behind the scenes coalitions with like-mindeds to try and advance your position through a groundswell effort?

        All Varoufakis did was pander to his own beliefs, making a lot of noise in the process but achieving literally nothing – pretty depressing.

        In the case of the debate about austerity, the limits of what Varoufakis could achieve were given at the outset: since the Eurozone is a monetary but not a fiscal union, the effort to get outright debt relief AGAIN (after 2012 – don’t forget the $100bn haircut then) was always going to be Quixotic. There is no Euro treaty provision for a country to be insolvent: hence Varoufakis was told to stop calling Greece a case of bankruptcy that was being treated as a case of illiquidity. Because a bankrupt Eurozone member state has no place – legally – in the Eurozone. The best he could hope for was to build a quiet, steady coalition of member states to gradually argue for the maturities on Greek debt to be extended. Possibly try to get more structural funds to flow into the country. More ambitious could have been to ask for some kind of Marshall plan support, targeted intervention to bring youth unemployment down etc.

        Politics is the art of the possible. Varoufakis excels at rhetoric, analysis, and little more. I remain unimpressed and fault him for a large portion of the mess Greece is now in. In Q4 2014 Greece was one of the fastest growing European economies, don’t forget that!

        Liked by 1 person

    • Nick A says:

      I think you’re misunderstanding what was actually being negotiated. We’ve already heard what the eventual destination of the Schaeuble plan was – Grexit. The deal on offer can only have been about navigating the route to Grexit in the most advantageous way and planning the time of arrival to have maximum political impact. I think that this is the reason for Varoufakis’ stance in the negotiations; he was basically saying “If you want Grexit I cannot prevent it, but the time is now and I will make it as clear as I can that this was your chioce. Otherwise we can make a deal that returns some semblance of determination to the Greek people”.

      I also think Varoufakis was fundamentally right on the economic arguments, but that meant little without the freedom to put these to the test. Necessarily, the main objective was to either get Schaeuble to show the world that he was holding all the cards, or to change the situation so that this was no longer the case.


  4. VMan says:

    You are correct, In the future when the facts are collected and a total review of the Greek/Euro crisis is completed, History will not be kind to Varoufakis. If you compare the Greek economy in July 2015 to Sept 2014, the difference is frightening, it was estimated that the economy would need an additional €10B for 2015, now that figure is approaching €90B, Plus we will only see the true extend of the real damage to the economy and by extension to the Greek people in the coming months. This figure of 90B will rise as the GDP growth drops and will result in much worse Austerity. Originally Varoufakis was looking for a 30% write down, roughly €100B. Even if this were to happen now it would be negated by the additional lending now required because of Syriza’s collapse of the economy.

    Varoufakis became obsessed with the Overall debt, but this was not the immediate problem, He lead the people of Greece up the garden path and over a cliff. The EFSF debt was not payable for 10 years and the interest rate of 1.5% (same as a AAA country) was not payable for 10 years. The IMF and Trioka said in 2012 if Greece implemented all the targets of the 2nd bailout they would write debt off. The IMF stated if the debt to GDP ratio was not 120% of GDP in 2020 it would reduce it to that figure. Greece’s debt repayments are only approx 2-3% of GDP. The last tranche of the 2nd Bailout was to repay debt which is restructuring. From day 1 they should of accepted the last tranche of bail out 2 and then spent their time renegotiating a total restructure of their debt, pushing it on to the longest possible repayments and then held the Trioka to their 2012 promise. GDP, growth and reform of the Greek economy were the paramount issues not debt sure just look at Japan’s debt.

    The debt problem was the long game and would have been looked at if Greece had over got it’s house in order firstly, no country will ever repay its debts, they’re just recycled. Varoufakis ideology sounds good to the ear but that’s all it does, it does not add up with the facts of the situation or how the real economy and debt markets work. A major mistake was when Syriza got the politicians directly involved with every detail of the talks, Pollicising the situation is always a disaster and tit for tat fighting results. The diplomats/technocrat’s should have been allowed to work out the details first. Syriza lacked specifics when negotiating. And wasted so so much valuable time. I feel sorry for the people of Greece in being fooled by a false prophet. There were no easy solutions from the beginning.
    From the out side looking in, Varoufakis seems to have sociopath traits, I don’t see any stress, worry, or heart felt compassion for the ordinary people and compare this to Tsakalotos.


  5. Peter Smith says:

    iGlinavos old sport,

    I think you need to step back a little and concentrate on the issues and not on the people involved, however much the personalities sway everyone’s emotions.
    I have no doubt about your credentials and reading your blog these past months gives me the impression that:
    1. You are passionate about saving the Greek people further pain. However, whether your recent recommendations will save Greece is another debatable issue.
    2. Obviously, you have a good grasp of the details. However, sometimes it seems to me that you are also just caught up in the theoretical economics & subversive politics rather than to look for some creative solutions.
    3. After such a disastrous outcome (although we have yet to see things all play out to the end), it is human nature to seek out a scapegoat. Resist this temptation.

    I am not Greek but I have overwhelming sympathy for the suffering of the Greeks.

    I also am an avid supporter of Yanis Varoufakis. Like you, I also am critical of some of his errors. I think he needs to rethink his European idealism for one. This goal of his surely wasted some time during these past 5 months, until he realised that tackling the Euro Power elites head on and trying to convince them to do things differently was not going to work.

    I disagree with your analysis of the Referendum. I think it was a masterstroke. Unfortunately, Tsipras & Syriza did not have the courage to use the power that the people gave them to do what by then most intelligent people realised needed to be done. The Greeks, I think, have all the skills, tenacity and determination to rebuild their country. Just give it back to them – 100%. Kick out all the bankers, weed out the slackers and stop believing in the Euro Dream – it does not exist (unless you are one of the privileged elites).

    However, myself and many others it seems, are not ready to consign YV to the scrapheap. There is still much more to come in this “Greek Tragedy”, I believe. And we are going to need all the foot-soldiers we can muster.

    Please reconsider your position re YV. He had the courage to try, and even you will have to admit, we were not able to see in the end where his plans would have led us. Because, either way, Greece is still back to where it was 6 months ago, roughly speaking. What difference will a few more billions in debt make if you can’t repay it anyway?

    Keep up the good debate and continue with the constructive criticism. But ease off on the Yanis-bashing, it’s not going to get us anywhere (unless of course, you are one of “them”).

    Forza Grecia

    Liked by 2 people

  6. One way or the other, Yanis’ blog does not seem to publish my comment, so I give it a (deliberate) try here.
    I do not know if you are familiar with “The next 100 Years” by George Friedman. If not, I recommend you to read it. In it, it becomes clear that politicians have little room to maneuver, if they want to survive. I have great difficulty with the way our European institutions reacted to a.o. the Greek referendum. On the other hand, I am well aware that they have to mind their electorates. In my view there is no conspiracy against Greece. That there are clear differences of opinion of how to solve this crisis and that participants try to convince each other is to be expected. This we see all the time in Europe. The art each time again is to find common ground and to show each other respect, even when one completely differs in opinion. At the end of the day, it is not who is right or wrong, but who is able to gather the most support.
    I understand Yanis’ his anger and frustration, but I think it is misdirected. He should help Tsipras to make most out of this agreement for the Greek people using the abilities and the regard he has. And if an ordinary European citizen like me can help out, e.g. by sharing some of his wealth directly with Greek people in dire needs, he should show us how.

    P.S. I feel a lot of compassion with the ordinary Greek, who has to suffer through this all, and had hoped that the European leaders would have understood the NO-vote as a sign of despair and would at least have found room to promise debt reduction for correctly executed reforms, rather than new debt roll overs.


    • mikenetherlands says:

      At the moment I have the feeling Yani’s blog doesn’t blog publish any comment what he doesn’t like to hear. And what I should like to hear is an answer from Yani’s on this “J’accuse Varoufakis” And not his frustration about Dr. Schäuble.
      I agree, many of use feel a lot of compassion with the ordinary Greek, but the way of handling of this government is real strange. My compleet family was killed in Sobibor, but only the Greeks had to get an compensation because they sufferd more than the others. (I suppose.)


  7. Peter Smith says:

    Hi everyone,

    Do yourself a favour and read the article below. It was written by George Friedman on the Stratfor website. You will also find on the website, George Friedman’s biography, if you have any doubts about his credibility.

    “An Empire Strikes Back: Germany and the Greek Crisis is republished with permission of Stratfor.”

    This article puts forward a theory of how & why Greece has ended up with the current Bailout deal in the form that it is. Even if you don’t fully agree with the analysis, keep this article in mind as we go into the future.

    Liked by 1 person

  8. Peter Smith says:


    After being unable to resist the temptation to contribute to this blog, I salute you for including my contributions, even if it has meant a bit of criticism of your point of view.

    I do not wish to keep advertising other blogs and websites except where their content furthers good debate here. In this spirit……

    Bill Mitchell, is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. And he has a blog – billy blog. His broader subject is Modern Monetary Theory … macroeconomic reality. Today he published what I consider to be a superb article. Naturally, being an academic, the article contains facts & figures to support its basic argument – “A Greek exit could not be more costly than the current path”.

    Again I strongly recommend all bloggers here to read the article linked below. Just to tempt you, here are the last few sentences:


    The question remains: Is being able to have a euro in your pocket worth the sort of sustained income losses outlined above?
    I cannot construct any situation where you could possible answer yes to that question.
    In one news report (Source) – an unnamed European Commission official was quoted as saying:
    No one wants to see a North Korea in south-eastern Europe
    No, that would conflict with the ‘North Korean-like’ installation in Brussels, Frankfurt and Washington.
    An exit is not rocket science. But it surely is better than the future that Greece is facing under the conditions that now appear to forming the latest bailout options.”

    Bill says “spread the word”, so here goes:

    Liked by 1 person

    • LeaNder says:

      You know what, Peter, you can tell him that. Strictly it is a truism. we are all sociopaths. Doesn’t the world know already?


  9. Robert Browne says:

    The problem is that the first and secnd bailout entailed gross violations of “trust” the same trust that Germany and Ireland’s finance minister Noonan feigned was lost by Greeks wanting a workable deal and then by daring to consult the Greek people.

    There have been no “negotiations” between Greece over the last few months only staring down the barrel of a gun with Schauble on the other end and he of all people should know what happens when triggers are pulled with the bitterness of 1990 still fulminating and spewing forth in mountains of pure vindictiveness. Where Greece have gone wrong is they should have had a plan “B” they should have recongised that all the “negotiations” was just game playing so that the crushing defeat would be even more crusing. The so called “agreement” or terms of surrender, has completely undermined the IMF, it has destroyed whatever semblance of confidence and/or pride people had in the European project. Greece has been destroyed in WWII by German tanks and now again by Germany using totalatarian, fascist monetray policies, to crush a small defencless country. What happens next depends on whether there are any countries left in Europe that even pretend to be democracies. All countries that have any pride in themselves should immediately get out of this grotesquery called the EU. Varoufakis will be proved right as the Euro disintegrates what has happened in Greece has not been lost on Italy and Spain and they are not going to take this lying down.


  10. Yulek says:

    Well, I would rather wonder, if Tsipras and Varoufakis could held responsible for criminal negligence at least. They have neither prepared for Grexit nor for the crisis that is now happening. This is a direct result of their negligence. Just because someone is smart enough to make it in to the highest levels of government does not mean they are not to be held responsible for their mistakes. But that is a Greek internal problem.


    • Peter Smith says:

      Ha! Ha! Ha! Yulek… got to be kidding.
      A politician being held accountable for something? Especially for a catastrophe like this.
      Tell me when & where this has ever happened in Europe.

      Anyway, Tsipras & Varoufakis never really did anything wrong or negligent. They tried to get for the Greek people what their party, Syriza promised to do for them before the general elections and what the people, in turn, voted them into power to do. When it became obvious that this desired result was not going to be achieved easily or not at all, the Greek people were asked again. Austerity the Troika way….Yes or No! The people responded. NO to austerity, the Troika way.

      But by this time, the Troika (the Eurozone, IMF & ECB) had piled so much pressure onto Tsipras and his close advisors that they panicked & decided to surrender. Varoufakis resigned in disagreement with their decision and the rest you know.

      Tsipras had only two choices, both with severe disadvantages. Austerity in the Euro (and the country continuing in a slow death spiral) or Austerity outside of the Euro (but with the chance to rebuild the country as a sovereign nation, in full control of its destiny). He has chosen the first option or maybe he just tossed a coin. Either way, the poor Greek people are still going to suffer.

      Now it is up to the Greek nation to judge its leaders, the democratic way. Support them, if they have done right or vote them out of power. Isn’t that the way its supposed to be done these days!!


      • Yulek says:

        When was a politician held accountable last time, hmm, a good question. Can’t recall such a case.
        I think the time of holding politicians accountable is coming back, especially with parties like Golden Dawn, or angry mob with pitchforks and torches.

        Tsipras and Varoufakis were negligent. They did not stockpile medication for example, how many people had health problems because of that? I am sure there were a lot of other things they should have prepared for and did not. As usual people paid the price.

        They also did not foresee the possibility of German politicians to behave in such manner to the bitter end. They should have had the legislation and the necessary amount of new drachma for Grexit from Eurozone. They did not.

        They simply had no contingency planning going on. In case of ruling a country that is a clear cut case of criminal negligence. And while I am not a Greek, I think, that Tsipras may pay dearly for this. If not today, then some time later.

        Tsipras had to cave in, he had no other plan. Had he not caved, the end result would be a near complete destruction of the Greek State.

        Grexit at this point was a better choice, since it gave a resolution to the problem. Prolonging the stupid self destructive policy misnamed “austerity” and racking up more debt in the process will only guarantee, that we all will be back to this little play sooner, rather than later. Grexit will happen, the only question is “when?”.


  11. LeaNder says:

    Let’s get out the pop corn, this is starting to get interesting:

    Exclusive: Yanis Varoufakis opens up about his five month battle to save Greece

    “The referendum of 5 July has also been rapidly forgotten. It was preemptively dismissed by the Eurozone, and many people saw it as a farce – a sideshow that offered a false choice and created false hope, and was only going to ruin Tsipras when he later signed the deal he was campaigning against. As Schäuble supposedly said, elections cannot be allowed to change anything. But Varoufakis believes that it could have changed everything. On the night of the referendum he had a plan, Tsipras just never quite agreed to it.

    The Eurozone can dictate terms to Greece because it is no longer fearful of a Grexit. It is convinced that its banks are now protected if Greek banks default. But Varoufakis thought that he still had some leverage: once the ECB forced Greece’s banks to close, he could act unilaterally.

    He said he spent the past month warning the Greek cabinet that the ECB would close Greece’s banks to force a deal. When they did, he was prepared to do three things: issue euro-denominated IOUs; apply a “haircut” to the bonds Greek issued to the ECB in 2012, reducing Greece’s debt; and seize control of the Bank of Greece from the ECB.”

    Yanis reminds me of my friends the pop musicians when I was a teen. They said it like it had to be said. European lefties unit and fight for the complete erasure of Greek debts? This usually triggers responses on the right. Already in 2010 these bail-out Euro-skeptics created their own new party over here in Germany, which meanwhile has been taken over over by the neo-right anti-immigration crowd.

    His narrative is easy, we “vermin” Germans, as one contributor on Yanis’ blog likes to call us, created the Greek crisis underhandedly by pulling the strings in the Euro-zone. Forcing Greece deeper and deeper into despair while profiting of it via interests, I guess.

    Here is the counter-narrative presented slide-wise by Aristides Hatzis:

    Greece at a crossroads: What is at stake, and what to expect”

    The truth is somewhere in between.

    no preview, can I use html tags here?


    • Html tags are ok, but sometimes links get spammed. This is why some reader comments never appear. I would prefer you tell us the name of the source, and we can google it.


      • LeaNder says:

        Seemed to work quite well. To my surprise in fact. No preview. 😉 May I try it again?

        One of my favorite “pop-academics”, no harm meant. Not bad really.Slavoj Žižek on Greece: This is a chance for Europe to awaken

        There had to be both ideological and precedural clashes between Varoufakis and Schäuble, absolutely no doubt.

        The link below in the transcript of the full Varoufakis interview does not work for me. I have to take a closer look at his 70s watershed. The start of the culture war from my perspective.

        Egalitarianism’s latest foe: a critical review of Thomas Piketty’s Capital in the Twenty-Frist Century Yanis Varoufakis, 2014

        Is there any chance to get a closer look into the extricates of Germany’s entanglement and guilt in these bailouts. Ideally from someone that can cut across the lines of the argument.

        I basically supported it in 2010, but didn’t really grasp the scope. There were multitudes of dissenters not only in Merkel’s party the CDU/CSU camp, some prominent FDP (Free Democrats = neoliberal by now) at the time. So yes, they already agreed with him then.


  12. Peter Smith says:

    iGlinavos, you devil!

    I have just seen one of your blog posts on Paul Mason’s blog. Perhaps you missed the following article:

    It is an excellent counter argument to your headline article above.

    Like all of your readers here, his followers provide a high standard of support and counter-argument that is always worth reading. Those of you who have not read any of his stuff – check it out. It is well worth the read and will broaden your outlook & knowledge on the subjects he covers (mainly Greece at the moment).


  13. Peter Smith says:


    You must be getting tired of reading my two pence worth and, if I am becoming a pest, you can always cut me off. But, if not, here are some thoughts that have come to mind tonight.

    As I sit here, following The Guardian’s live coverage of the unfolding events in Greece, it became too nerve-wracking to wait for the next snippet of “news” and I had to break away to try to settle my nervousness. I have ended up paging back on your blog, right to the very beginning. What a revelation it revealed, how far we have come, how much things have changed and many of us have changed too. Do you remember this?

    “A win for Syriza in Greece is a win for rational economic policies in Europe

    Greece tonight has rejected the orthodoxy of austerity and shows the way to a better future for all in Europe.

    To appreciate the importance of Syriza’s victory see the collection of results above. From the humble beginnings of 4+% to nearing 40% (according to estimates at the time of writing) is a triumph for Tsipras and also a total condemnation of austerity and retrenchment.

    Let us hope that Europe will see this result as an opportunity for a change of course.

    January 25, 2015”

    What wonderful idealism! What great hope for a better future!
    I felt the same way and I am sure Yanis Varoufakis did too.

    As you know, I am not Greek. But you should have heard me shout for joy when I heard that Syriza had won the election. The ordinary people of Europe, in Spain, Italy and even in Germany, sensed a new spirit sweeping us along and leading us to a better future for ALL in Europe. And Greece would lead the way.

    You are an expert in law. Yanis is an expert in economics. And there are many others who put forward credible suggestions. Intellectually, all of your arguments are sound and your facts are correct. You back up your proposals with extensive research. You engage your critics with logical debate. You explore and understand the legal framework that governs all of the issues. You leave nothing untouched in your search for the best outcome. But you cannot convince those, who have the power to change things, that your case has some merit. In fact, the law is flaunted, the economics are ignored and worse, when you dare mention the democratic process, you are laughed at.

    Did we expect this? At an intellectual level I think not. We treated our peers as our equals. We gave them credit for the positions that they held and the power that they wielded. And when they laughed in our faces, we were only a little surprised…maybe they just did not hear us the first time round. So we repeated our story. And again. And again.

    So what went wrong?

    Many things, I suppose and the analysis will go on for a long time. Despite the failure (so far) to reverse the economic catastrophe of Greece, some important things have also been gained.

    The European Dream, embodied in the old EU & Euro framework is dead or is slowly dying. I also believed in it once, but I am now willing to hammer a nail into its coffin.

    And that is where I think we must start…….forget about saving Europe. Lets start by saving Greece!. Lets stop turning on one another. We, who were once comrades-in-arms, must remuster our troops. We must learn from our past mistakes, but we must move onwards, together.

    Today, we are the cusp of the most crucial time in Europe since WW2. Today is the day when Greeks in particular and Europeans in general must make the hardest of choices. Because that choice will determine the sort of future they will get for themselves and many generations to come.


  14. My view on this, if my suspicion is right, and Mr Schaeuble does not really want to negotiate, but Grexit, all alternative better negotiation attempts would have led to the same result.

    The other negotiating side is not acting in good faith, ultimately. That started with Draghi closing down on liquidity from day one. You say V could have achieved a better negotiation with Draghi. The point is really, that the provision of liquidity should not be subject to negotiation at all.

    THe ECB should just provide liquidity through the Greek commercial banks to buy government bonds. Period. The ECB should not be able to tell commercial banks what they can or cannot really do. If they want to buy Greek government bonds, instead of bonds of company xyz, why not. They are private sector companies, nobody should interfere in their decision-making.

    You can state you other arguments if you like, that V could have got better agreements.

    Ultimately not, no matter what he would have done.

    The other parties do not act in good faith either. See the Slovak finance minister tweet talking of the crushiong of the “Greek Spring” (referencing Prague Spring) on Monday, since deleted. (Copolla blog on Forbes you can still see it.)

    See what an ex IMF guy has to say about the IMF in this, not acting in good faith.

    So, if that is true, the other side only pretending to be negotiating, something V claims as well, of course, plus closing down liquidity to the banking sector, while talking up Grexit (especially after referendum has been announced) then this is not a negotiation.

    This is war.

    Or, as Naked Capitalist blog called it.

    I rest my case.


    • Peter Smith says:


      Where are you?

      We are going to have move on shortly…..much happening all around and quite difficult to keep up to date sometimes. What’s next on your mind?

      I was sad to see that you got a bit of a rough ride on Yanis’s blog yesterday from some of the commenters. Based on their previous contributions, I would have expected a lot better from some of them. Maybe the scenes in the Greek parliament yesterday just overwhelmed them as it did me. As you are well aware from my earlier comments here, that is exactly the kind of attitude I am trying to discourage…it just does not help the Greek cause. Time is just not our side and I sense that things on the Greek streets and the lives of the people there are hanging on a knife’s edge.

      As you know, I am on a crusade to rally the troops. In that spirit, I see that Eurogate101 has joined in here. I can see that he is modest but I must point you and your followers also to his blog:

      Now we are really starting to get somewhere, raising the discourse to a practical & positive level. Although the Greeks continue to suffer and the Greek economy remains in a mess, there is no shortage of support out here and it is growing. Reading as widely as I can, I sense a definite shift in the air.

      Harnessing the power of the internet, this ensures that the groundswell of ideas will continue to be debated and this, hopefully will be the catalyst towards a credible plan developing that will also give courage & hope to the doubtful & undecided.


  15. LeaNder says:

    Iannos, if I get this right? Notice my real name is Barbara, as a Greek you may realize what that means, I am a barbarian, pretty close in name to Yanis daughter, if I get this correctly, Xenia.

    Notice I may have wasted another nonstop 48 hours without sleep to figure out who Varoufakis is, and what serious complaints he has.But it left me me with the rather real impression that he may ride high on the wave of the Greek crisis only,. Yanis no doubt handles his blog via some type of PR aware company, I don’t blame him, given his prominence, but I also have to admit, over the last two decades I was rarely censored, almost never in fact

    In the end I ended here. ‘You know it?

    What would really be needed, was a huge program to recruit all the sensitive Greek expats, and we have quite a few over here too, apparently to control the bureaucrats in controll for the EU.

    Are you aware of any recommendations Vanis made in this context, workable offers? I didn’t find any.

    Besides,I wish you well.


  16. LeaNder says:

    If you don’t mind, Iannos, I would like to drop here all my comments that sure are not published on Yanis blog:

    Here I am responding to this::

    I doubt I will be published but nevertheless.

    Personally I find that privatization in the current Greece content is the worst possible answer. I also objected heavily to the Treuhand deals, which on the surface where meant to allow a continuity for employes by supposedly alluring investors but in fact may well have only allured the vultures. The German East, by the way has been a great recruitment place for the West German neo-Nazis, if I do not call them what I usually do: the neo-right.

    On the other hand I would like to understand, what at this point in time I would like to call the Great-German-Surplus-Conspiracy in Europe that Yanis propagates.

    I am doing my very best with rather limited economical knowledge, but nevertheless, I would like to know how I am mistaken to wonder how Yanis coming from the left, at least he claims to come from there, can treat speculation in pretty much the same way as I heard before as some-type of economical sanitary force is necessary to keep the market “clean”. I may assume wrongly, no doubt, that they would prefer privatization as a good for the larger public even in the US.

    And this public good is only endangered by German “nationalist interests”? Or since Germany does not turn? I would appreciate the pages 271 to 280, by the way.

    “The problem was that speculators, with George Soros the better known amongst them, could see that the currency pegs of the ERM/EMS were unsustainable given the pressures on the balance of payments of Germany’s European partners. So they bet massively against it, until the EMS broke down. At that point the Bundesbank understood that nothing short of a currency union will allow it to see its grand plan through. It was a gamble. And it came with a sizeable psychological cost, given the voluntary abandonment of the DM. But it was deemed essential given the greater ‘good’ to be had from turning the RoE into the economic zone onto which Germany’s shifted the burden of its adjustment, thus allowing German oligopolistic multinationals to maintain ad infinitum their net exports (of goods and production units) to the rest of the world.”

    I also would very much appreciate to what extend Yanis surrenders to an Athens coinage I really love without having ascertained its meaning so far: “ergodicity”, and the politics of vagueness to remain in the larger profit game. I understand that today it is not so easy to succeed as Tiresias. What I wonder a bit about if game theory dictates vagueness while poltical intent over the ages dictates clear opponent. Never mind that Greece attempted a Querfront as we call it over here in Germany in English apparently called the Third Way. Which, I have to admit I find slightly fascist.

    And yes, I needed a couple of beers to be able to stand Yanis type of egodicity, or his look out of support concerning scapegoats in his desire to divide between good versus evil. Yanis a member of the Axis of Good?


  17. LeaNder says:

    I do not check the rest, yes this guy starts to make me really, really angry:

    current Greece content

    content meant context.


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