German Chancellor Angela Merkel welcomes French President Emmanuel Macron

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Об отрицании Европы

Jun 28, 2018 Yanis Varoufakis

АФИНЫ – Истеблишмент Европы наслаждается двумя свежими новостями, которые имели бы огромное значение, если бы были правдивы хоть отчасти: конец долгового кризиса в Греции и франко-немецкая договорённость о перестройке еврозоны. К сожалению, оба сообщения стали очередным доказательством наличия у истеблишмента Евросоюза потрясающего таланта – никогда не упускать возможности упустить возможность.

Совершенно не случайно оба объявления были сделаны на одной и той же неделе. Греческий долговой взрыв в 2010 году стал отвратительным симптомом ошибок в устройстве еврозоны. Именно поэтому он вызвал эффект домино на всём континенте. Сохраняющаяся неплатежеспособность Греции является результатом глубоких разногласий внутри франко-немецкой оси по поводу плана перестройке еврозоны. Пока три президента Франции и один и тот же канцлер Германии никак не могли договориться об институциональных изменениях, которые бы сделали еврозону более устойчивой, Грецию просили тихо истекать кровью.

В 2015 году греки устроили бунт, который истеблишмент Европы безжалостно подавил. Ни Брексит, ни постепенная делегитимизация ЕС в глазах европейских избирателей не смогли убедить истеблишмент изменить свой курс. Избрание президентом Франции Эммануэля Макрона казалось последней надеждой на достижение нового соглашения между Берлином и Парижем, которое необходимо, чтобы не допустить провоцирования задыхающейся Италией нового – и на этот раз смертельного – эффекта домино.

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Joulie benoit Jul 1, 2018

To B Rosenfeld
L’analyse de Varoufakis est beaucoup trop théorique.
La Grèce n’est pas les USA, leur capacité d’exportation est très faible.
Donc une forte dévaluation ferait beaucoup de perdants et peu de gagnants.
Seuls les professionnels du tourisme seraient gagnants.
Une dévaluation de 40% amputerait le pouvoir d’achat d’une grande majorité de Grecs, les plus faibles seraient durement touchés...

Varoufakis' analysis is far too theoretical.
Greece is not the USA, their export capacity is very low.
So a strong devaluation would make a lot of losers and few winners.
Only tourism professionals would win.
A devaluation of 40% would cut the purchasing power of a large majority of Greeks, the weakest would be hit hard ...
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Barry Rosenfeld Jul 1, 2018

OK, let's assume that Prof. Varoufakis is 100% correct. The real question, then, is what's next? If the government in which he was Finance Minister is agreeing to the conditions, what to do? Start a new party that promises much, but won't deliver? End participation in the Euro and threaten to join Britain as part of the former EU Club?

The Greek government did not understand the implications of surrendering its control over its national currency and joining what is, in effect a Gold Standard regime. Had the borrowed funds been in Drachma denominated currency, allocating it to social expenditures would have led to a passive devaluation. This, in itself would have increased the Greek trade balance by making Greek exports cheaper and imports to Greece more expensive. It would have ensured that the people of Greece would have had sovereignty over the decisions and their results of their government.

As Prof. Rodrik has pointed out quite clearly, rules established by int'l governing bodies are not necessarily compatible with democracy. Greece can only re-establish democracy by a Referendum that clearly accepts what the current government has accepted for the next two generations, or instructs the government to exit the Euro and establish a national currency and a plan for reconstruction and development of the national economy.
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Wim Roffel Jul 1, 2018

Varoufakis loses me when he argues for things like a common budget and guarantees. The best that would result in is that the periphery of the eurozone turns into a big East Germany - a permanently depressed region caught in a web of rules from its condescending big brother.
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Per Kurowski Jun 29, 2018

The Eurozone certainly has design fault, but “the Greek debt implosion, back in 2010, was the ugly symptom of” serious bank regulation flaws. The outlandish 0% risk weight assigned to Greece, doomed it to excessive public debt.
https://teawithft.blogspot.com/2018/04/the-severity-of-greeces-financial.html
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vivek iyer Jun 29, 2018

Debt gives rise to a crisis when borrowed money is wasted. That's why there was a Greek debt crisis. Its ending simply means that we believe that the EU won't be enabling Greece's addiction to borrowing money, wasting it, and then demanding all previous debt should be written off so that Greece can continue to borrow money and waste it.

The Eurozone budget could, in theory, redistribute hysteresis related gains from having gone in too low but there is no reason to believe that Merkel has endorsed any such thing.

Italy, like Greece, borrowed money and wasted it. Ultimately, it is the Italian saver who will pay for this profligacy. Other countries have learnt the lesson that borrowing is only a good idea if one is investing wisely. Improving allocative efficiency is all that matters.
- Alex Aslanidis Jun 29, 2018
  
  Nonsense.
  
  Greece entered the Eurozone with 110%/ GDP public-debt. That (meaningless when Greece was on the drachma) debt was re-denominated in euros overnight. The structure of the Eurozone meant that Greece would have to rollover that debt through the markets, not through it's central-bank as it once did. It was just a matter of time, when the first international crisis hit (as it did in 2008), when Greece would be unable to service it's debt because of the markets' tantrums, and because the ECB refuses (thanks to the Germans) to act like a proper central-bank.
  
  Nothing to do with wasted money, everything to do with the flawed design of the Eurozone.
  - vivek iyer Jun 29, 2018
    
    Greece came in at too high a valuation in the belief that lower real interest rates would compensate for the redenomination of their debt. If they had improved ease of doing business and aggressively repositioned themselves as a financial/IT & shipping hub, then its continued borrowing would have more than paid for itself. However, as with Italy, there is a lot of evidence that investment funds were misallocated. No doubt some German firms used unethical and illegal means and this contributed to the problem. Still, this was scarcely an inevitable outcome.
    
    Had Greece not joined the Euro, they would have had higher real interest rates and also Greek savers would not have gained a Pigou type windfall in terms of the re-denomination of their drachma holdings as Euros at a premium.
    
    Suppose Greece had kept out of the Euro, but made its Central Bank independent and legally bound to pursue price stability. Then, real interest rates would have been a bit lower and currency risk, but not volatility, would have ffallen. Since the same result would be gained by joining the Euro, but with even lower real interest rates, it was rational for Greeks to join. It should be remembered that, even fifteen years ago, most people thought Greek economists and statesmen were smarter (they were certainly better educated) than average. True, there was a lot of opacity regarding the business environment- but people thought that the Greeks knew how to pick winners and back them to become regional, or even international, behemoths.
    
    Even very corrupt countries can borrow and invest profitably and thus end up with a declining debt to Income ratio. Greece and Italy weren't making sensible investment decisions. The Greek economy began to stall even before the crisis precisely for this reason.
    A new reply to this comment has been posted.
  - vivek iyer Jun 29, 2018
    
    Greece came in at too high a valuation in the belief that lower real interest rates would compensate for the redenomination of their debt. If they had improved ease of doing business and aggressively repositioned themselves as a financial/IT & shipping hub, then its continued borrowing would have more than paid for itself. However, as with Italy, there is a lot of evidence that investment funds were misallocated. No doubt some German firms used unethical and illegal means and this contributed to the problem. Still, this was scarcely an inevitable outcome.
    
    Had Greece not joined the Euro, they would have had higher real interest rates and also Greek savers would not have gained a Pigou type windfall in terms of the re-denomination of their drachma holdings as Euros at a premium.
    
    Suppose Greece had kept out of the Euro, but made its Central Bank independent and legally bound to pursue price stability. Then, real interest rates would have been a bit lower and currency risk, but not volatility, would have ffallen. Since the same result would be gained by joining the Euro, but with even lower real interest rates, it was rational for Greeks to join. It should be remembered that, even fifteen years ago, most people thought Greek economists and statesmen were smarter (they were certainly better educated) than average. True, there was a lot of opacity regarding the business environment- but people thought that the Greeks knew how to pick winners and back them to become regional, or even international, behemoths.
    
    Even very corrupt countries can borrow and invest profitably and thus end up with a declining debt to Income ratio. Greece and Italy weren't making sensible investment decisions. The Greek economy began to stall even before the crisis precisely for this reason.
    A new reply to this comment has been posted.
  - vivek iyer Jun 29, 2018
    
    Greece came in at too high a valuation in the belief that lower real interest rates would compensate for the redenomination of their debt. If they had improved ease of doing business and aggressively repositioned themselves as a financial/IT & shipping hub, then its continued borrowing would have more than paid for itself. However, as with Italy, there is a lot of evidence that investment funds were misallocated. No doubt some German firms used unethical and illegal means and this contributed to the problem. Still, this was scarcely an inevitable outcome.
    
    Had Greece not joined the Euro, they would have had higher real interest rates and also Greek savers would not have gained a Pigou type windfall in terms of the re-denomination of their drachma holdings as Euros at a premium.
    
    Suppose Greece had kept out of the Euro, but made its Central Bank independent and legally bound to pursue price stability. Then, real interest rates would have been a bit lower and currency risk, but not volatility, would have ffallen. Since the same result would be gained by joining the Euro, but with even lower real interest rates, it was rational for Greeks to join. It should be remembered that, even fifteen years ago, most people thought Greek economists and statesmen were smarter (they were certainly better educated) than average. True, there was a lot of opacity regarding the business environment- but people thought that the Greeks knew how to pick winners and back them to become regional, or even international, behemoths.
    
    Even very corrupt countries can borrow and invest profitably and thus end up with a declining debt to Income ratio. Greece and Italy weren't making sensible investment decisions. The Greek economy began to stall even before the crisis precisely for this reason.
    A new reply to this comment has been posted.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Peter Schaeffer Jun 28, 2018

Wolfgang Münchau wrote

"Some revolutions could have been avoided if the old guard had only refrained from provocation. There is no proof of a “let them eat cake” incident. But this is the kind of thing Marie Antoinette could have said. It rings true. The Bourbons were hard to beat as the quintessential out of touch establishment. They have competition now."

As it turns out, he wasn't writing about Macro and Merkel. However, he certainly, could have been.
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Об отрицании Европы

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