Economics

Новое соглашение для Греции

Apr 23, 2015 Yanis Varoufakis

АФИНЫ – Три месяца переговоров между правительством Греции и нашими европейскими и международными партнерами позволили значительно сблизить позиции по поводу шагов, необходимых для преодоления нескольких лет экономического кризиса и для устойчивого восстановления экономики Греции. Но они пока еще не привели к соглашению. Почему? Какие шаги нужны для появления жизнеспособной и взаимно согласованной программы реформ?

Мы и наши партнеры согласны уже по многим вопросам. Греческая налоговая система нуждается в обновлении, а органы по сбору доходов должны быть освобождены от политического и корпоративного давления. Пенсионная система больна. Кредитная система экономики разрушена. Рынок труда опустошен кризисом и очень сегментирован, а рост производительности замер. Государственное управление нуждается в срочной модернизации, а государственные ресурсы надо использовать более эффективно. Бесчисленные барьеры мешают созданию новых компаний. Конкуренция на товарном рынке излишне ограничена. А неравенство достигло возмутительных уровней, препятствуя объединению общества ради важных реформ.

Несмотря на этот консенсус, для соглашения о новой модели развития Греции надо преодолеть два препятствия. Во-первых, мы должны достичь согласия в подходах к бюджетной консолидации Греции. Во-вторых, нам необходима всеобъемлющая, согласованная всеми сторонами программа реформ, которая будет обеспечивать реализацию данного плана консолидации, и которая вселит уверенность в греческое общество.

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.

As a registered user, you can enjoy more PS content every month – for free.

Already have an account? Log in

Secure your copy of PS Quarterly: The Year Ahead 2023

Our annual fourth-quarter magazine is here, and available only to Digital Plus and Premium subscribers. Subscribe to Digital Plus today, and save $15.

Subscribe Now

new comment has been posted. new comments have been posted.

0 Comments on this paragraph, 61 Comments on this article

Marco Saba Jun 22, 2016

This may help to understand the framework of Mr Varoufakis piece: Institutional formations and the Anglo-Americanization of local auditing practices: The case of Greece http://www.sciencedirect.com/science/article/pii/S0155998215300089
A new reply to this comment has been posted.
Martin Hopman May 13, 2015

Keynes is absolutely right.Germany is the main destructing factor to the emu.
A new reply to this comment has been posted.
John Maynard jr. Keynes Apr 29, 2015

Dear Mr. Varoufakis,

I agree on much of what you say. But I think there is one essential mistake.
What's destabilizing the emu is Germany's systematic surplus orientation and the very low costs - one could call it wage dumping. Wages have been unbound from productivity development with tools like reducing employment protection, wage rises below or just up to inflation rate and a massive expansion of atypical underpayed employment sector.
This led to a artificially high competitiveness resulting in destroying other countrie's export economy.
Even though Greece has faced enormous cuts and faces in my opinion a social desaster the greek economies competitiveness is still lower than Germany's.
Why don't you emphasise much more that Germany is destabilizing the eurozone with it's enourmous surpluses and competitiveness at cost of german laborours and european neighbours.
Germany hat to move too by raising wages or reanimating public investment.
- Eva Vogelsang Apr 30, 2015
  
  I think, you don't know about what you are talking. Germany has one of the highest wage lvl in Europe. The reason why germany has such a big balance surplus is, that the quality of the goods is betterand the productivity of the labour is higher than in other countries. And the weak Euro is certainly a reason, but not for the export to the Euro-ccountries. It is easy to make other people responsible the own failure.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Andre X Apr 28, 2015

As a Dutchman I don't like the tone of Greece at all. To me it is very arrogant making a big party on the cost of others. Like in many countries of Europe we had our austerity package and still we gave our money to Greece which could have been spend much better for health care for elderly or education in our country. Instead we spend it on Greece. I think that is time for Greece to leave the Eurozone. According to my view the Greek behave like spoiled kids. The current Greek crisis should have been used for a revolution to fight tax evasion and to privatize state enterprises in such a way that Greece would be able to reinvent itself. Unfortunately Greek politics believe the temptations of Russia, if they are yourr friends why not join them? Introduce the Rubel instead of Euro! Will this bring any better? I don't think so, even Russians are clever enough not spend their last currency on you lazy and arrogant Greek.
Wake up and get to work!
A new reply to this comment has been posted.
Farid Novin Apr 27, 2015

In today's topsy-turvy world of negative yields on one third of short- and long-term sovereign bonds in the euro area, mountainous and rising debts with $600 trillion of toxic assets, and a seemingly unlimited supply of QEs, one should find Yanis' request for 'a new deal for Greece' quite rational... and indeed why not! Let's like anyone else kick the can down the road for few more blocks and see if it would disappear somehow by itself.

This is a world in which a year after March 2014 -- that is after IMF’s great discovery that ‘too big to fail’ is altogether different from ‘too important to fail’ and after alerting the world that: “Banks deemed ‘too important to fail’ borrow at lower rates, take bigger risks,” and after recommending that: ”Policymakers should aim to remove this advantage to protect taxpayers,” in a press conference on April this year Mr Viñals of IMF announced that weaker or less important banks are advised to either merge or get out of the market, i.e. smaller banks should become bigger, or rather less important banks should become more important. Then why not to strive to have ‘too important debt to default’? That could be part of 'a new deal for Greece'.
A new reply to this comment has been posted.
M M Apr 27, 2015

Yanis, You are doing fine......The fact that they joined forces against you on Friday.....says it all. Time is of the essence though. Other world economies are far ahead of Greece. Whatever plans (strategic or otherwise) your government intends to introduce must take into account the development of the human resources. Reforming the civil service is imperative. They are the "engine" of the economy (rather than laying them off, let them act as profit centres instead of cost centres, thereby encouraging them to play a significant role in boosting growth into the economy) and as such they will no longer form part of the technical discussions / cost calculations that are currently taking place. Maximise the use of IT but do not allow the old practices to get into it. Re-engineering / Managing an economy, any economy is never easy, but Greece is fortunate enough to rely on more than one economy, it will be up to you to extract the maximum “potential” out of these economies. Also there are many tested and well proven examples in the advanced economies that one can explore and may wish to adopt. You need to consider the setting up of Think Tanks consisting of people with real credibility and international exposure, to support the efforts of your government. You must encourage entrepreneurship and partnerships. Try to involve / attract the Greek diaspora through genuine and credible proposals. Part of the excessive interest charges that the so-called partners have been earning from Greece must be claimed and channelled back into Greece and invested in the economy through new and economically viable projects. The citizens of Greece must play a greater part in saving their country. Offer them incentives to invest in their own economy, such as especially designed interest bearing bonds. Awareness road shows with a clear road map may be required for this purpose. Do not antagonise them. One cannot change a culture overnight. The Greek people, especially the new generation, are not short of ideas and are well qualified. Instead of other countries benefiting from them, let Greece do!
A new reply to this comment has been posted.
Fernando Saldanha Apr 27, 2015

"None of this means that common ground cannot be achieved immediately." says Mr. Varoufakis after a long list of criticisms of everything his negotiating counterparts have proposed. His behavior is just too provocative, insulting I would say. No wonder Tsipras dumped him. Beggars cannot afford to be insolent.
A new reply to this comment has been posted.
M M Apr 27, 2015

Yanis...Keep up the good work. The obstacles put in front of you and of Greece were to be expected. The forces to the right within the EU/EZ cannot agree on anything between them, let alone between them and Greece and regrettably the same can be said of the so called left! Today the population in Europe are not stupid, they understand very well. One added credit to you, you managed to unite all of them, albeit against you, something that no one has ever managed to do before. Regrettably, the media bias against Greece and their democratically elected representatives is there due to the biased / engineered / paid journalism.. It would be nice to see a mechanism in place to expose the funding parties behind these paid agents (so called journalists), because one thing is for sure, they are anything but journalists... Excellent article and excellent work. Everyone is behind you...
A new reply to this comment has been posted.
Ernest Jack Apr 27, 2015

Yanis is often so impassioned with acnient Greek mythology, and his own sense of intellectual prowress, that while he tried to school us on the lesson of the Minotaur, he fogot all about the story of Icarus.
A new reply to this comment has been posted.
Robert Carter Apr 27, 2015

His Comment "If this means that the debt-to-GDP ratio will be higher than 120% in 2020, we devise smart ways to rationalize, re-profile, or restructure the debt – keeping in mind the aim of maximizing the effective present value that will be returned to Greece’s creditors." Suggests 'rationalize' con politically by rhetoric so others accept our bad judgement calls. Otherwise I find Varoufakus missing just 1 point Viz., as one of the oldest Empires of the World they really shouldn't keep getting into such messes as to need debt relief. Meaning they ignore Austerity even in sectors like waste and laziness of workers, and over reliance on stimulus directed to the sin causes to repeat century after century. Cry for help and rely on World kindhearted suckers for easy money.
A new reply to this comment has been posted.
jagjeet sinha Apr 26, 2015

When Detroit fails, it's citizens are free to move to California or Chicago or wherever.
When Greece fails, although on paper EU permits free mobility, in reality 11 million cannot migrate to Brussels or Berlin.
The Union has to then be responsible to ensure INVESTMENT EQUALIZATION - that ensures balanced economics.
Given multiple languages, each such region needs its economic machine to be firing away to achieve balanced economics.
Otherwise FREE MIGRATION is the natural response - in say America Australia Britain Canada.
The Economic Masterminds should have built this mechanism from inception - never mind it is never too late.
Because if the Union is not prepared to bite this bullet now, tomorrow there will be more 'Greeces'.
When Private Capital is unwilling to balance the economics, PUBLIC INVESTMENTS need to correct the imbalances.
So that the Sum of Private and Public Capital does not allow any more 'Greeces' to arise.
Instead of a QE regime that is being implemented, it is perhaps time to create a Eurobond funded PUBLIC INVESTMENT program.
Am not sure the ECB is equipped with powers to create such solutions - within the ambit of EU rules as they exist.
Nevertheless, hate to see Greece's predicament - have really enjoyed Greece every time we have visited.
Wish speedy recuperation from the current state of Greece's economic health.
A new reply to this comment has been posted.
Charles Warden Apr 26, 2015

Once again a great strategy voiced in a weak sales pitch! The rest of Europe does not wake in the morning worrying about Greece surviving as part of the European zone. European countries, not surprisingly, worry about their country first and about Greece mainly in what it's exit will do to them, the Euro, and the associated impact on financal markets. Mr. Varoufakis if you want persuade European countries to accept your approach for Greece you must address their domestic concerns, problems they wake in the morning worrying about: their own unemployment, economic growth, pension reform, bank solvency, balance of payments and trade, fiscal policy, etc. Show them how keeping Greece in the Eurozone and how a strategy that promotes recovery and growth in Greece is good for their own economic growth and progress. Then you will have a successful sales pitch and a possible sale.
A new reply to this comment has been posted.
george sos Apr 26, 2015

In conclusion ,lets say it by its name.Corruption in greece runs in all levels of society and no matter how honest and how intelligent the members of government are,tyo stay in their places they've got to satisfy the needs of these corrupt greeks,who got used to easy money .Not every greek is like that.Half suffer at this time.But there is a half that actually hasn't felt a thing.This is the truth about greece and its reforms.If we are to built a new state ,rooted on honest,law abiding individuals who d not look how to cheat the system,and when we enforce the law by creating strong agencies that would be clear of any potential for corruption,if we built a new justice system without the old corrupt generation of judges,if we....forget it ...its not going to happen....Thats the truth.The "new" will be just a revamped old.Same lazy non producing state paid people in the same positions running a country to the wall....all for their own profit and because there is no social cohesion ,no care for the neighbour ,no interest to live in a civilised society.Jungle is what they are used to by now the greeks...Trtust me i am greek...i know what i m talking about...
yes there are hard working people in greece.But not many.not rich....as for the young,forget it,no hope from a generation brought up equipped only to be employee of some multinational .We need change in so many levels that it seems improbable that any of them will actually be effective or influence the outcome .we are doomed i tells ya!:)
so much for reforms....what reforms,we need to burn it down and built it from scratch man!!
A new reply to this comment has been posted.
Peter Tremulis Apr 26, 2015

Yanis, Since Greece cannot print money like the US, the traditional path to prosperity through continued negotiations with the "Troika" is quite limited for Greece without new sources of currency. I suggest not making the reform of internal pension and banking policies dependent on a comprehensive restructuring deal with the Eurozone since it will not come the way you want it too under the present circumstances. Instead, shop the world capital markets and bring Larry Summers with you to see who is willing to purchase your outstanding soverign debt (at a likley discount to face value) with the least number of strings attached so you can implement your internal pension and banking reform plans on your terms. The discount will roughly equate to the first round of QE you will need the Troika to agree to cover with new capital. Reforming pension and banking programs now will open up Greece to this potential source of funding as entreprenurial capital is always seeking an opportunity for reasonable returns. Think of it as "Crowd Funding" on a rather large scale. Don't forget to register your offering with the SEC here in the US. Under US Financial Regulatory Reform Rules, the vehicle would still be considered a Security Instrument. With the recent interest and level of investment in some of the Greek Money Center Banks from Global Private Equity Funds and Asset Management Firms, you have a bigger opportunity here than you might otherwise think. By raising capital from the Gobal Equity Firms and Asset Management firms, you would be able to fashion your own version of the Treasury here in the US and commence a "swap" of new instruments to swap the ailing commercial bank debts on existing Greek real estate which is now non-performing and slowing down the velocity of money within the country. This form of self-help will allow the commercial debt markets to restart themselves, albeit it at lower debt levels. To cover shortfalls, include provisions in your work-out with the Eurozone that they will also agree to allow you to assign to the Troika the bad bank debt that Greece will take back through this swap process and get to agree to hold it indefinitely. This will then become the second bit of negotiation with the Troika to enable this second round of QE funding since you will then have more Euros to inject into the Greek banking system to 1) stabilize the banks and 2) commence conservative lending programs. This is essentially what the US has done to avoid radical currency devaluations which remains the essential unanswered question as to how sustainable the current US recovery really is. But again, if need be, we in the US can commence another round of QE if the capital impellers begin again to slow in 2015. Currency creation is the oxygen that any engine needs to run when the capital environment is clogged with too much carbon dioxide as was the situation in the US not too long ago and remains so in Greece today. Of course, the carbon dioxide is bottled up on the Fed's balance sheet but that is a discusson for another day. If Greece can assume the role of the Treasury for the Eurozone and convince the Troika to play the role of the Federal Reserve to allow the first round of Euro QE to deploy in Greece as a pilot program, then I think you have won a real victory for Greece and perhaps enabled the Euro to survive along side the Dollar as a "managed" global currency. This is the model of "deficit spending" which has been the main fiscal/monetary tool of the US Economy Policy as envisioned by Hamilton and then implemented during the turn of the last century by Morgan, Brown Brothers, Kuhn-Loeb and Seligman following successive crashes. We haven't eliminated the crashes, but we have found a way to deal with them so the economy at large remains a viable social and financial benefit to the population at large an a smallish group of capitalists who underwrite the venture.

New economy businesses are needed in Greece along with the educational resouces to allow Greece to compete with China, Japan, the US, Germany and India in getting it share of tech, manufacturing and entertainment jobs which should help to replace the sectors currently loosing employment due to global changes in trade patterns, ie internet. So a wirelessly connected country should be added to the list of items that should get priority funding for the first round of QE mentioned above. Data is the fuel that when combined with Currency in the economic engine of Greece creates profit potential which can then catalyze the carbon dioxide (debt) in your system. Focus on creating automotive, high-tech and entertainment industries in Greece to start.

Hope this helps provide the perspective you may be lacking and the tools needed to finalize your negotiations on behalf of the Greek people. Reach out of you need/want any clarifications.
A new reply to this comment has been posted.
george sos Apr 26, 2015

not to mention the value of the state owned assets that ,if properly managed ,can produce profit ,but have indeed been left to rot on purpose so that at the right time (the time for the "reforms" they will manage to buy (steal) cheaply..
PS:Thank god we have an honest government and not the servants we use to have as government.The greek assets wouldnt have lasted much longer the reform!!:):)
A new reply to this comment has been posted.
Enrique Titos Apr 26, 2015

The Greece problem will not be resolved by the Greeks. Previous and current governments have showed inability to commit with challenges derived from Euro introduction, have lied to Europe and and world, and more importantly, to their people promising the unthinkable. Greece deserves an opportunity, but with a technocrat government who understand and executes the reforms at pace that Greece consolidation and competitiveness requires. Europe will support that course, and the greek people will benefit in the long term. There are no quick routes to long term prosperity
A new reply to this comment has been posted.
Rod Ruger Apr 26, 2015

It is too late. Greek politicians (U.S. politicians, too) have dug too deep a hole. The solution for Greece is to exit the EU, declare bankruptcy, talk straight facts to Greek citizens, endure the resulting civil unrest (which will not be pretty), eliminate about 90% of government, put retirees under 75 back to real work, write an economic constitution, and start over. Greek citizens will have to pay for what their politicians have done (purchased votes with handouts – just what our own politicians have done and continue to do).
A new reply to this comment has been posted.
Philip Karuman Apr 26, 2015

You had the good life, generous pensions and welfare more than many other nations for decades and now you want no backward induction! You got to be kidding! Just drop out of the Euro, work harder, be more competitive, cut welfare, spending and start saving like everybody else and pay back your debts like all of us!
A new reply to this comment has been posted.
Miron Ely Apr 26, 2015

I think that Greece will never recover and be able to pay its debt,so it is better to exit the Euro for this generation.
Its geographic diversity ,many isolated islands,etc.does not allow the authorities to collect real taxes from population.
So we have a situation where the Govt. pays benefits to the folks but collects much less.
On top of this ,being close to Turkey,where the taxation is Levant type,namely non existent,many Greek islanders probably live
on contraband items and supplies from Turkey instead of EU .
It is an impossible mission.
Greeks must exit the Euro,learn the harsh cosequences of their mistakes and after 20 years to re-mary the Euro zone as a mature
person.
The effect on the Euro will be also positive.
A new reply to this comment has been posted.
Eusebio Manuel Vestias pecurto vestias Apr 26, 2015

the government of Greece created atmosphere of hope to the Greek people but unfortunately your environmental this become a wyth in Greece to Greece has to comply with the watering of the Euro with the reforms to tax cub red tape and easing their labor market
A new reply to this comment has been posted.
Padelis Loupos Apr 26, 2015

Magka, mazepse ta kai esu kai o tsiprakos kai ante sto kalo. Arketa paiksate me tin Ellada
A new reply to this comment has been posted.
John Brian Shannon Apr 25, 2015

Hi Yanis,

I appreciate your thoughtful, well-laid-out and apparently heartfelt essay on the present economic moment in Greece.

The solution for Greece (and any nation, organization, or family unit) is stunningly simple; 'Spend less than you make.'

Imagine if Greece had followed that advice all along. It would've been Greece bailing out other EZ nations and Greece would've been the banker of first resort in Europe and MENA all these years.

I understand that the present problems have been decades in the making, and suddenly switching to 'spend less than you make' is not going to solve that mountain of accumulated debt, nor will it fix the structural problems in the Greek economy to which you've alluded.

But it couldn't hurt.

It seems that future lenders and present creditors need to feel some level of assurance that their money is safe, that it will be paid back at some point, and that they are not simply throwing their money away -- because Greece's problems are too large to fix or the political will is not there to tackle the roots of the problems, or that Greeks won't agree with the solutions proposed by the government.

If you can't give those assurances, then they have no business lending Greece any more money. (IMHO)
If you can't give those assurances, then you have no business asking for more money. (IMHO)

Good faith is the essence of all relationships and loans between governments isn't any different. If lenders feel secure, then they will lend the money. If they don't -- every excuse in the world will be used to delay such lending until an appropriate level of comfort is reached.

This appears to be what the restrictions on Greek policy were/are about. Not enough confidence in a very new government, nor with the previous Greek government.

If you can prove that you have a sustainable economic plan, one that has a real chance of success, and have demonstrated good faith and hit most of your targets, then those restrictions should one-by-one disappear over the course of 12 months.

I can't stress it enough... When Greek government revenues exceed Greek government expenditures, and that continues every year for the foreseeable future -- the problem is solved. It's just a matter of time.

That would show true fiscal discipline, demonstrate excellent good faith, and commitment to your goals of placing the Greek economy on a sound footing.

At that point, there should be few, if any, restrictions imposed by lenders except for the normal caveats.

>>'Spending less than you make' is everything... and everything else is a detail. (Including proposed or pending structural reforms)<<

Let me say it a different way; If the Greek government is spending less than it makes on an ongoing basis -- how the Greek government arrives at that slightly surplus budget is nobody's business.

That's right. If you're running a balanced budget or a slight surplus, there should be no interference at all by lenders of any sort, including the EZ nations, the ECB, or any other lender in regards to the policies of the Greek government -- and that means ALL GREEK POLICIES, ALL THE TIME -- until such times as the Greek government returns to deficit financing.

Many people, myself included, want Greece to succeed and want to assist in the return to economic and social stability of Greece.

With the greatest respect, I suggest that you need to a) continue to explain the Greek situation as well as you've done here at ProSyn and other media, b) to run slightly surplus budgets every year, c) to continue to show good faith -- and to reject any conditions by lenders as long as you are doing a, b, and c, as above. (Except for the normal lending conditions and caveats that every government accepts, of course)

As always, very best regards, JBS
A new reply to this comment has been posted.
Leo Kolivakis Apr 25, 2015

"The pension system is ailing." I would say the Greek pension system is on the verge of collapse. The jobs crisis doesn't help but an even bigger problem is the total lack of proper governance surrounding Greek pensions. Instead of creating something akin to the Canada Pension Plan Investment Board, Greece has allowed their pensions to slowly wither away, much like its economy which is in desperate need of major reforms. Of course, the biggest problem in Greece remains its grossly over-bloated public sector which Syriza will fight for tooth and nail until its leaders are forced to implement drastic cuts (one way or another, cuts are coming, especially if Greece leaves the euro and goes back to the drachma). Mr. Varoufakis knows this. Tsipras knows this. They are playing a dangerous game with no leverage. Greeks are only fooling themselves if they can't see past Syriza's dangerous lies. It's time for Greeks to take responsibility for years of economic failure and finally bring their economy into the 21st century by implementing much needed reforms to make it more competitive and open to foreign investors. Varoufakis laments that Greece needs a new deal but he fails to see the world has its own problems to deal with and if Greece doesn't reform, it will be left out, or worse, thrown back into the Dark Ages.

Leo Kolivakis

Publisher of Pension a Pulse blog.
A new reply to this comment has been posted.
Marc Willemsen Apr 25, 2015

Dear mr. Varoufakis,

I very much appreciate 'The Austerity Trap' of mr Liu. But it is an article of an (very talented and hard working !) undergraduate student in sociology. Not some report of senior researchers with equal talent and far more experience. It bothers me that you use it as you do.

The other thing that really bothers me is that - when I read this correctly - you have not made any move towards 'the institutions'. Of course you want to rationalize the pension system etc. But I want to read about ideas that you think will work for Greece that are not supported by 'the institutions'. And why they should work.

I'm from The Netherlands and - of course - influenced by the culture in my country. Which is like that of Germany. But I'm trying to understand your position, Greece's position. And I'm failing. I need a lot more information
A new reply to this comment has been posted.
Margaret Bowker Apr 25, 2015

Firstly, we knew the 24th wasn't going to be decision day, but there appears to have been some progress and lots of frustration. We don't know what the progress amounts to, but I'm hoping it was at least, as suggested in the media, on primary surpluses, since I'm with Yanis Varoufakis on this: backward induction should be ditched. And while we're on the subject why aren't end of meeting statements produced? If this goes badly wrong, it affects a lot of people and they have a right to know how big the differences are and the likelihood of failure. Progress reports should be issued at regular intervals over the next 20 days until the meeting on May 11. Both sides need to co-operate and make it happen.
A new reply to this comment has been posted.
failedevolution failedevolution Apr 25, 2015

Increasing probability for a big European "collision" through Grexit

http://bit.ly/1O1zH4A
A new reply to this comment has been posted.
vasileios kostarides Apr 25, 2015

Yeah right the troika made them 'all wrong, however tell us mr. Varoufakis what you is your new development paradigm for Greece and what you discussed with Mr. Soros recently and why. Or do you prefere to silence by talking too much.
A new reply to this comment has been posted.
Aale Hanse Apr 25, 2015

Dear Yanis and the Greek people,
I wish you well in you endeavours to proceed in the current problem and onwards. One thing I would like you to do is dispel this feeling I have that the time before the crunch everyone was having a good time not thinking of the ramifications of the behaviour exhibited by all and sundry. Of course now that most realise what went wrong you want to avoid the time for pain and reflection (some call austerity).

The big problem with global austerity this time round is it is not being shared by all due to the inequality factor and of course it is those in power who are usually the ones to reflect and alter things to suit. So until they share the pain no reflection will occur.
A new reply to this comment has been posted.
Anand Lobo Apr 24, 2015

Dear Mr. Varoufakis,
The Great and historic nation of Greece has given the world some of the greatest Thinkers of all time. The Greek crisis is deep and systemic and needs an 'Outside the Box' approach instead of pure austerity which has apparently not worked very well.
So thinking 'outside the box':
1. Consider converting 50% of current Euro debt into "Preferred Equity" in Greek Industry and National Institutions!. Yes, this means that Europeans will actually get own a part of this great and historical nation, but owning a part of Greece will be more attractive to them than owning Greek Govt Bonds. No doubt the Preferred Equity should have appropriate conditions attached to it relating to ownership, transfer, payback and redemption. However, converting debt to equity will help to partially reduce the crushing burden of interest payments on the Greek people.
2. The Preferred Equity could provide a suitable "Dividend return" to holders from the 5th year onwards, but should be redeemable only after the 15th year, if equity holders wish to redeem. Owning Equity will give Europeans a sense of stake in the future of Greece while also giving a realistic time for Greek economy to get back on its feet.
3. For balance 50% of Euro Debt, a clear repayment plan should be negotiated to pay down the balance amount over 10 years, and a suitable plan of action for wide ranging reforms launched and pursued, something which your govt is already committed to doing.
4. At same time, Greek govt should float Greek "Resurgent Govt Bonds" in USD and Euro which should be open only to Greek Citizens (resident and non-resident) with a tenure of 8 to 10 yrs and with a ROI of at least 5% ( a few percentage points above the best USD rate available). This will attract the huge amount of Greek money being currently held offshore back to Greece. It will also give resident and non-resident Greeks a feeling of National pride that they are re-building the nation. The demand for these USD / Euro Govt Bonds will reverse the current flight of capital from Greece.
5. Introduce a maximum limit on overseas remittance by Greek citizens, and encourage them to investment in Greek Govt bonds and in Greek companies.
6. Consider selling at least 25% to 40% of the Govt's stake in Greek Public Sector companies to Resident and Non-resident Greek citizens and Foreign investors to bring in new money. I am certain private individuals from the US, Europe, China, India and the Gulf States would find Greece an acceptable long term investment.
Best wishes
A new reply to this comment has been posted.
dan baur Apr 24, 2015

You got zero credibility. Greece's best hope is to adopt German leadership.
- Alisdair Hamilton-Wilkes Apr 28, 2015
  
  Dan Baur,
  You sound like a rather nationalistic German. Not sure how well you know your history but Greece was under German leadership in the past.
  
  Sadly it didn’t work out as well as you seem to be implying it might.
  A new reply to this comment has been posted.
- dan baur Apr 25, 2015
  
  Socialism without OPM (other people's money) is laughable.
  A new reply to this comment has been posted.
- dan baur Apr 25, 2015
  
  ...and now we got Plan B - Syriza has zero credibility as it should.
  A new reply to this comment has been posted.
- catherine adractas Apr 25, 2015
  
  You are out of your mind !!!
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Per Kurowski Apr 24, 2015

The most urgent reform Greece needs, is to get rid of Basel Committee’s bank regulations, those which discriminate against the fair access to bank credit of the “risky” SMEs and entrepreneurs, those who most can help to dig Greece out of the hole.

http://subprimeregulations.blogspot.com/2015/02/ecb-imf-unbelievable-greeces-memorandum.html

http://teawithft.blogspot.com/2015/04/europe-allow-your-banks-to-function.html
A new reply to this comment has been posted.
MIPR Greece Apr 24, 2015

For prosperity in Greece, the Greece ministers' first priority is to build trust and confidence with all stakeholders. To build trust and confidence, Greece ministers must make transparency and accountability of government finances their most important reform. And, the starting point for transparency and accountability in Greece is accurate government financial information obtained through international public sector accounting standards and audits. To learn more suggest studying the material at www.mostimportantreform.info.

Minister Varoufakis please answer these five important questions:
#1. Was 2013 Greece net debt under international accounting standards 18% of GDP and approximately 1/4 of EU post-programme countries?

#2. Was 2013 Greece cash interest expense approximately 3.8% of revenue and 1/3 of EU post programme countries?

#3. Does Greece receive approximately €7 billion per year in EU annual funds and has Greece avoided net debt of over €160 billion by receiving “free” EU annual funds since 1996?

#4. Is the opportunity cost of misguided financial management by the Greece government €35 billion to €45+ billion since 2012?

#5. If Greece primary balance as a % of GDP equaled the highest of EU post-programme countries through 2017, would net debt remain approximately 18% of GDP?
A new reply to this comment has been posted.
john zac Apr 24, 2015

I will begin with Foucault, "The strategic adversary is fascism... the fascism in us all, in our heads and in our everyday behavior, the fascism that causes us to love power, to desire the very thing that dominates and exploits us."
You came in with an attitude that you knew better. You flaunted a style that you felt was superior to your adversaries. You were never humble. You did not exhibit leadership. You did not win any arguments. So in short---YOU FAILED.
- catherine adractas Apr 25, 2015
  
  Why can anyone be humbled to dictators who run EU?
  Actually Dr. Varoufakis is a very humbled man, polite, good listener and very knowledgeable. Negotiations hasn't finished yet so how come you tell him that he ...failed? You either a lousy ,jealous economist or an EU puppet .Whatever you do remember the Greek saying "γλωττα μη προτρεχετω της διανοιας"
  Google it !
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Luca Grande Apr 24, 2015

Dear Yanis,
what is your interest in trying to reach an agreement with the people you said you wouldn’t have compromised with (the Brussel’s Group)? Any agreement with them will come at a perpetual cost of accepting their conditions. And do you seriously believe that your plan of reforms will allow Greece to prosper in the future within the Eurozone? I thought Syrza had a clear mandate from your people to default on public debt, exit the Euro and work hard toward a seriously deep structural reform of the country. Independently.
A new reply to this comment has been posted.
Ernest Jack Apr 24, 2015

Yanis

In the media it seems the US and EU are saying you are failing to present a properly costed set of proposals. That has been their main driving criticism, which is that your need to show how your numbers work. If you fail to deliver this you will have little sympathy from anyone as this would be considered recalcitrant, incompetent, or negligent beyond reason at this stage of the game. Prove them wrong! Please!
- Con Cit Apr 24, 2015
  
  Yanis..I think Ernest Jack has a most intelligent point. Your theories sound good, but they have to be backed up with real numbers that show they will work. This seems to the biggest sticking point in your negotiations, your partners need real Greece fiscal data, showing past numbers and future projections, presented by you, that show your methods are sound and will work. You must present these in a friendly and convincing way, and answer all questions they may have. Bankers are convinced by numbers and sound approaches, and agreements can be reached if you spent quality time with them going over the fiscal details and projected outcome of your solution to the Greek crisis..
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Markus Distelberger Apr 24, 2015

"Our task is to convince our partners that our undertakings are strategic, rather than tactical, and that our logic is sound. Their task is to let go of an approach that has failed."
Dear Varoufakis, I am really enthusiastic about your new approach. But please don´t define what the task of the other side is. That will only create more problems and unwillingness to understand. Please stay at your side of the street.
Wouldn´t be better to concentrate on Greece alone without missionaryzing the other Euro - Zone states? And work also for a plan B when Euro-Zone will not fulfill "their task to let go of an approach that has failed."
A new reply to this comment has been posted.
Philippe D. Grosjean Apr 24, 2015

Yanis, I believe it is now urgent to bring the "Modest Proposal for Resolving the Eurozone Crisis" that you drafted with James K. Galbraith and Stuart Holland, on the negotiation table with the Troika. Make the implementation of this "Modest Proposal" a sine qua non condition for any concessions acceptable by the Greek Government.
A new reply to this comment has been posted.
Gerry Hofman Apr 24, 2015

While I accept there is free movement of people and capital in the EU and therefore repatriating lost funds may be impossible, I do think that past politicians must be held to account for the mess they have created with their criminally negligent policies. There must come a time when they can be named and shamed and their heads put on the block.
A new reply to this comment has been posted.
Viveka Unstuffed Apr 24, 2015

Alexander attacked Persia, but I do not know about this now... due to high peak mountains it would be good to look at the Swiss model, as people cooperate well there and there is a high level of mutual trust between regions. Or any other consolidated country with high peeks between regions. Commonly agrees reform.... each region has it's own specialty and people know how to extract wealth out of their soil. It has been historically hard in Greece, but agriculture is what it is today. ;)
A new reply to this comment has been posted.
Milos V. Apr 24, 2015

Dear Yanis,

Try your best to conduct the needed reforms withing the Greece and default on all of the debts taken by previous governments.
That is the only possible way out that could lead into Greece being stable country
A new reply to this comment has been posted.
Curtis Carpenter Apr 24, 2015

Perhaps there is a third hurdle that must be overcome: agreeing in advance on the consequences should the next "commonly agreed reform agenda" be abandoned. And a fourth: how is the burden to be shared by the Greek people?

I ask again: what sacrifices have been made by the 1000 wealthiest Greeks?
A new reply to this comment has been posted.
Ernest Jack Apr 24, 2015

Yanis,

At this stage of the game, we would all love to see a Grand Deal that settles your debt sustainability issues and makes Greece an honest member of the EU. If your plan is for a United States of Europe, why not be the first of the "states" to offer its budget and numbers to your european peers and seed some fiscal sovereignty in this agreement. Agree on a 10 year primary fiscal surplus but have the budget sent for final approval. Show some true solidarity to the cause you profess is in the interest of a better Europe. Win for Greece, but also win something for the European cause by leading the fiscal unity drive.
A new reply to this comment has been posted.
King Kong Apr 24, 2015

Just ask for more money.

Greece is so small. How can you expect Greece can recover faster than the rest of countries in Europe?

Better put more effort to reform.

The politics was real bad. Wanted to lead Ireland, Portugal, Italy and Spain to step up the anti-austerity campaign right after the election. Also, Tsipras' first gesture was to visit WW2 memorial politically.

New election, or claim you have been financial minister for 5 months in your CV.
A new reply to this comment has been posted.
Brent Beach Apr 24, 2015

The failure of the Austerity Model is becoming clear across Europe. Public support has not yet declined enough to break the control the model has over the minds of most EU politicians. Still, support falls as the days, weeks, months pass.
Almost all adherents to the old paradigm will invent excuse after excuse to continue to believe the old and not believe the new - see comments here for examples.
In order to break the hold of the existing austerity paradigm, you must have a new paradigm in place, fully explained as to how it solves existing problems.
To improve credibility of the new paradigm it must has widespread support - publicly acknowledged. Opinion leaders across the EU who support the new plan must be found and convinced to sign on in a very public way.
Perhaps Greece's best hope is to survive long enough that Greece is still viable when the paradigm change happens.
The tipping point may be closer than many realize.
A new reply to this comment has been posted.
Peter Schneider Apr 23, 2015

Just one simple question: Why should you believe a Greek politician? I don't have any indication to do so. They entered the union without meeting the required criteria, they faked their statistics year after year - so why should they now start to tell the truth? This would be very surprising indeed. So my verdict on this article is: not credible, just promising heaven and earth as always.
- Peter Schneider Apr 24, 2015
  
  The German politicians I don't believe either. Before the introduction of the euro they told us that no member state would guarantee for the debt of another and that the central bank would not finance bankrupt states. The law and the treaties were installed to protect the people but now that both have been broken there is no protection by the law any longer and the reigning elites rule arbitrarily and not bound by parliaments or treaties.
  A new reply to this comment has been posted.
- Walter Gingery Apr 24, 2015
  
  Why not pose the same question to the Germans: Have they really, truly changed since the Nazi era? (I would say 'Yes.')
  
  Yours is a genuine question, but the difficulty is, that we won't know unless we give them a reasonable chance to prove themselves.
  I think that it is worth the risk.
  A new reply to this comment has been posted.
A new reply to this comment has been posted.
Judith Meyer Apr 23, 2015

Sadly, the politicians in other European countries are less interested in whether their solutions work or don't work, whether they cause distress in Greece or not. What they are most concerned about are their own political future and the future of their sister parties in other European nations.

For this future, what's most important is that SYRIZA looks like it lost. It doesn't actually have to lose, but it has to look like it lost, like "we made them see reason". Without that perception, a) restructuring agreements with Greece will cost them a lot of votes and b) populist movements in other countries will be strengthened.

So far, the SYRIZA government has had to agree to an incredible amount of concessions - I'm especially thinking of the February agreement - but due to their own PR, if you ask the person on the street, they still think that SYRIZA was the winner of that. Additionally, Greek politicians have always adopted strong winner attitudes, including Mr Varoufakis himself saying just a week ago that a Grexit is not to worry because it would hurt Europe more than Greece. While SYRIZA is "winning" in PR (but losing in terms of saving Greece), European politicians cannot make reasonable concessions as a matter of political self-preservation. In my opinion, SYRIZA should hurry to start "losing" in PR but winning in terms of getting concessions and saving Greece.
A new reply to this comment has been posted.
Michael Public Apr 23, 2015

I can see you are genuine in your attempt to fix your country, but let me paint a picture: imagine the country as a man overboard trying to stay afloat alongside a boat. But the people on the boat all have life insurance policies on your life. So instead of throwing you a flotation device they give a millstone painted like a flotation device which you place around your neck. Now you are truly at risk of drowning, but instead of throwing off the millstone you enter into negotiations to swim twice as hard so you can receive a 2nd millstone.
A new reply to this comment has been posted.

https://prosyn.org/JZomnGwru

Новое соглашение для Греции

Secure your copy of PS Quarterly: The Year Ahead 2023

New Comment

Contact us

Log in/Register

Новое соглашение для Греции

Secure your copy of PS Quarterly: The Year Ahead 2023

Edit Newsletter Preferences

Set up Notification