Yves here. Yanis just posted an interview with ABC (Australia’s BBC) which describes how Greece cannot be salvaged. Its fate will be determined at the eurozone level, and its possible outcomes range from bad to awful. You can watch the conversation here. Transcript below:
LEIGH SALES, PRESENTER: Joining us now from Athens is the Greek economist Yanis Varoufakis.
The obvious question is: what happens now?
YANIS VAROUFAKIS, ECONOMICS, ATHENS UNIVERSITY: Well, the derailment of the train that is the eurozone, which started with Greece and then other carriages started leaving the tracks sequentially – Ireland, Portugal, now Spain – is continuing. And yesterday’s vote is not going to change that at all. All exuberance and celebrations are completely and utterly misplaced. I’m afraid that the eurozone and Europe is continuing along the path of the last two years of a cascade of errors, a comedy of errors. Just look at Spain, what is happening there today. Look at what is happening in Italy. Unless the logic or what passes as logic in the European approach to this crisis alters and alters fast, very soon the eurozone will be history.
LEIGH SALES: Well, let’s stick with the big picture for the moment before we drill down into Greece. What do you think could happen then to avert that disaster as you see it?
YANIS VAROUFAKIS: I’m sorry, I didn’t hear you because there’s a lot of noise – could you repeat that question?
LEIGH SALES: I will. What do you think needs to happen to avert the disaster as you see it?
YANIS VAROUFAKIS: Three things, the very simple steps that need to be taken. Look, in Europe, whether it’s Greece or Spain, what we have now is we have insolvent banks that are in a deadly embrace with insolvent states. So, the states get – borrow money from the centre of Europe in order to give to the banks and banks borrow to give to the state and both banks and states are sort of locked into a deadly embrace with another sinking very fast. So what we need to do is we need to break this nexus between insolvent banks and insolvent states. So, the way to do this is to unify the banking system, to Europeanise it in the European Union and have it being funded directly not through national governments. That’s a very simple step, but it’s a step it seems too far for the European Union.
Secondly what you need is a mutualisation, a kind of common debt, like in Australia we have, you know, the Federal Government having its own debt over and above states. And thirdly we need an investment policy which runs throughout the eurozone. Because you have a secondly currency area, you need to have an investment strategy, a recycling mechanism for the whole thing. Unless we have these things, and Germany doesn’t want to have these things, I’m afraid there is absolutely nothing to avert the continuation of this slow motion derailment.
LEIGH SALES: Just to go back to Greece specifically, the politicians in Greece couldn’t even agree on the terms of a televised debate during the election campaign. How are they going to compromise on measures to fix the Greek economy?
YANIS VAROUFAKIS: They cannot fix the Greek economy. The Greek economy is finished. The Greek economy is in a great, great depression. The growing social economy is in its long, long winter of discontent. There is no power, no force within the Greek economy, with Greek society that can avert – it’s like – imagine if we were in Ohio in 1931 and we were to ask: what can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.
LEIGH SALES: So what then happens to Greece?
YANIS VAROUFAKIS: It depends on what happens in the eurozone. Just like what happened in Ohio depended of the rise of President Roosevelt and the New Deal, unless we have a new deal for Europe, Greece is not going to get a chance. Now it doesn’t mean that if Europe fix itself, Greece will fix itself. It’s a necessary condition that the eurozone finds a rational plan for itself. It’s not a sufficient condition. Europe may fix itself and Greece, being so flimsy and malignant, may still have huge problems and never recover. But until and unless the eurozone finds a rational plan for stopping this train wreck throughout the European Union, throughout the eurozone, Greece has no chance at all.
LEIGH SALES: I read some statistics today that seven out of 10 Greeks want to emigrate. How would you describe the national mood there?
YANIS VAROUFAKIS: This is a our Great Depression. Not only in an economic sense, but also in a psychological sense. Greeks are in a catatonic state. One moment, in a state of rage, another, this is a typical case of manic depression. There are no prospects. There is no light at the end of the tunnel. There are sacrifices, but nobody gets a feeling that these are sacrifices that take the form of some kind of investment in turning the corner. This is the problem when you are stuck in a eurozone which is really badly designed, which is collapsing and which does not give opportunities to its flimsier parts to escape through some kind of redemptive crisis.
LEIGH SALES: Yanis Varoufakis, we can hear how noisy it is there. Thank you very much for making the time to speak to us tonight.
YANIS VAROUFAKIS: Thank you.
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I don’t get why he appears to be implicitly endorsing the view that Greece cannot leave the Eurozone.
He made quite a solid case a few weeks ago about how bad it would be for Greece to leave and go back to the drachma. Its not such a workable plan as it might be in other places. I don’t think I could find the post, but I believe it was here on NC if someone else knows where to find it.
http://yanisvaroufakis.eu/2012/05/16/weisbrot-and-krugman-are-wrong-greece-cannot-pull-off-an-argentina/#more-2171
Basically saying that a return to the drachma is A NEW CURRENCY, rather than the devaluation that occured in Argentina, and thus quite problematic
I guess that he prefers a reform that makes the eurozone viable rather than a collapse. He fails to aknowledge that the longer this situation is maintained the worse for Greece and the rest of GIPSIs.
I agree and understand that it would be preferable to reform the Eurozone.
Unfortunately, it has become abundantly clear that it will not happen, at least not for Greece. It’s just delaying the inevitable.
The only way that the EU, or the US, will be saved is a forced debt write down. The debt of the private and public sector is beyond the ability to repay. The state would have to step in and do finance as a public utility, as Yves has called for. It would be costly, cause some of the smaller deposites of the crumbling banks would have to be protected. In other words, it would require the elites to take on finance and for radical changes to the structure of the economic system in these countries. Not going to happen any time soon. It is almost certain that the EU will break up and the US will have a lost generation. The people who created this mess, and this includes most economics departments in the West, should be made to pay for what they have done. Nothing that has happened since the crash, nothing leading into the crash, had to happen. It happened because of decisions, going back decades, by those in power. Choices were made. The result is the the older generations are telling the young folk of today to drop dead and creditors are willing to destroy the real economies of country after country in order to be made whole. Whatever worked to build up the working and middle classes will be drained of their resources and eventually eliminated, there is no investment in the future and sacrifice by older generations, young people can basically rot.
The economic system though isn’t any different now than it was in the 70’s. The only difference is that the guns were turned on so called developing countries then. These neoliberal policies were forced on these countries, they were pillaged, weighed down with debt, forced to rely on foreign capital and inequaitable trade structures. If the $hit hit the fan, as it did in Latin America in the early 80’s with the debt crisis, the states would turn to selling off the public domain. The people in the West didn’t care because that theft was funneled back here. Some of the loot was given to the working and middle classes. So what did anyone here care that these savage free market policies were destroying these poor countries and people?
Well, now the guns are turned on us and what do you know, people notice how immoral and unfair the free market system is. Isn’t fun to have your pensions raided is it? Isn’t fun to see the public domain sold off to parasitic banks after THEY cause economic collapse, is it? Or to have your country and government weighed down in debt, to have your economies financialized and privatized to the benefit of a group of crooked insiders.
I just wonder, if we could wave a wand and go back to the good old days, if we could go back to robbing the poor countries blind and if that loot were more equitably shared, would workers here forget the true nature of the system? I would bet many would. I don’t think we will move on to any alternatives until people are willing to see the system for what it is and they feel compelled to put in place alternatives.
A rational, inexorably intelligent argument for rethinking of our financialized, bankrupt “economy”–straight from the heart….Thanks!
Greece has a big problem that comes from behind: it does not have an economy worth mentioning it. It has the shipping business (always more of a mafioso money-making scheme than any real kind of industry), it has tourism and it has little more.
It can leave the euro by means of a socialist revolution only (if the EU and NATO would allow it, which they will not). Such a revolution would be a bit “pol-potian” almost by need because a need is to recover the quite forgotten Greek agriculture and also to rescue or even create out of the blue a national industry in order to go autarchic, which is the only thing they can do out of the Eurozone.
But worry not: Turkey would fly a plane 12.01 miles (est.) offshore of some Greek island and create a crisis bad enough to impede any attempt of Greek real independence.
Leaving the euro without a radical socialist intervention would mean catastrophic hyper-inflation and an even worse collapse. Some devaluing (= inflation) is surely good an necessary but hyper-inflation would be equivalent to being within the Eurozone without any advantage derived from the euro.
Hence Greece will only leave the euro under a Red government and, even then, almost by force. And such government is at least many months away in time, assuming the worse ingovernability scenarios that the current ministerial crisis could led us to susupect (ND crumbling from inside, ha!)
Greece cannot leave the euro in a way that works. Not within a Capitalist frame that “respects” acquired debt and private property. It needs a Socialist frame that builds on respect of a very different kind: respect for the Greek People.
I always admire the depth of your knowledge, Maju–and generally your opinions. But a return to agriculture and shelter does not have to be Pol Potian, or even socialist in conventional production cooperative terms. It’s a quite natural environmental turn; see the Via Campesina and the Nyeleni Declaration: http://www.nyeleni.org/spip.php?article290. World’s biggest social movement, with 150 million farmers right under our noses and the west and almost all liberals blissfully unaware.
Read elsewhere that “devaluation” doesn’t help small countries, because cross-border trade dominates small-country economies. Maybe that’s why Yanis doesn’t consider leaving the Euro.
Problem with Greece is that it’s a tourism and agriculture-based economy and has practically exportable, value-added manufacturing.
Greek tourism and agriculture require lots of petrochemicals and other imports.
Income from a boost cheap-Drachma-fueled tourism is a bith of a wash if those same tourists need to be hauled around the in boats fueled by imported oil on islands that need coal or fuel oil to generate electricity.
There’s a longer (and more emotional) cover of the situation the Greeks are in,and his economist’s mea culpa. http://yanisvaroufakis.eu/2012/06/24/and-the-good-ship-greece-sails-on-letter-to-an-italian-colleague/
is not new …but the good think is GR acceped now..AND the bad think is there jet waiting from EUZ because knew EU have problem but don’t knew GR is one diffrent problem from EU . thinking all together (you know some time the ball take all front) this is in mental of Greek politices and other institutuion BAD HEEEE.. GR HAVE TO WORK VERY HART in mentality first ..structure politice +economic ..nothing is eazy but nothing is impossibility..noone wanted (rithmisiss) ma ..logical is first rithmisis after help here is big mistake GER MERCEL..NOT GOOD PLAN for GR and others country” WORD DEAL ”WAS AND IS NECCESSERY…for every step ..
thank you
donna, your comment brings back the image of the Last Helicopter above the American Embassy in Viet Nam. Wonder why.
Also the image of chaos before the Brits/Yanks got away in the Last Plane on the tarmac in Weir’s film, “The Year of Living Dangerously.” Wonder why.
The 1920-1921 downturn in the US was much greater than the Greek economy is experiencing now. How was it that the US economy recovered in 18 months from a massive downtown when intervention was minimal?
1920-1921… The Depression that economists want to forget so that they can remain fully employed.
Wot? No Fordney-McCumber Tariff?
http://eh.net/encyclopedia/article/kaplan.fordney
Because President Harding sat in the White House and played poker. In other words, he did nothing. No bailouts, no stimulus, no advice from Keynes. Miraculously, the economy recovered on its own. Funny how that works, isn’t it?
Here s a nice debunking of the free market slavertarian lies (http://socialdemocracy21stcentury.blogspot.com/2010/10/us-recession-of-19201921-some.html)
You also failed to mention what happened in Italy or Austria during the same recession. Hint: What the Austrian school was created to produce (see the books “Old Nazis, the New Right, and the Republican Party: Domestic fascist networks and their effect on U.S. cold war politics” ).
Every day the same time of opinion, a dirge, a total lack of future ideas, while reality proceeds.
It is now several years that the end of this or the collapse of that is announced.
There are so many prophets!
However the condition of the economy, we continue to eat and drink and make merry.
I suspect that all this talk and downgrading of banks and nations is a maneuver to extract interest. The USA does not pay any interest so several countries are badmouthed and forced through the press to pay enormous interests.
I have stopped believing , punctum.
Of course the answer is for the entire EU to write off its odious debt … it is unpayable. What is happening is the transfer of bad debt from private hands to public balance sheets …
“Recently, JP Morgan research estimated that of the €410bn borrowed by the Greek government over the past three years, only €15bn went into the Greek economy. The rest went to Greece’s creditors.”
“The bankrupt German banks were recapitalized with German (and Dutch and Finnish) taxpayer money but via troika repurchase of Greek bonds. The theatre piece of merit is the mis-representation of the bailout of German banks by German taxpayers as a bailout of Greece by their friends in the Euro club.”
http://www.energybulletin.net/stories/2012-06-25/whose-bailout-whose-responsiblity
IOW: The foot dragging by Germany was to recapitalize their banks at the expense of everyone else … Unfortunately Germany is now the largest creditor for all the rescue plans and the ECB itself.
Who wins ??? Why the banksters of course !!!
This. And not much more, really. A simple, classic story. But people would just feel stupid if they had to accept that they had been hit over the head with a mallet and had their pockets vacuumed.
mmc, isn’t this what Veblen claimed had happened with the Versailles Treaty?
“We must suffer them all again.” said Auden (“September 1, 1939). But this time, please, America, let’s NOT re-play EuroNobility reparations a la mode de:
“THE BUBBLE THAT BROKE THE WORLD” by Garet Garrett (1932)
http://mises.org/books/bubbleworld.pdf
“…imagine if we were in Ohio in 1931 and we were to ask: what can Ohio politicians do to get Ohio out of the Great Depression? The answer is nothing.”
This is not quite right. Ohio was helpless in ’31, to be sure, but Greece is not like depression-era Ohio, because Greece is not a powerless subdivision of a greater entity.
This will come as shocking news to most people around the world, and it will certainly blow the minds of a majority of modern day Greek citizens, but Greece is, incredibly, an independent sovereign nation!
In fact, Greece has been a country for quite some time –since 1830, to be precise.
So, unlike the state of Ohio in 1931, if the Hellenic Republic decides to get out of its depression, it can do so anytime it wants (like tomorrow, for instance).
That’s what’s great about being a country, you don’t have get stuck in a perpetual depression if you don’t want to. Even better, you can choose as a nation to keep it real simple, by refusing to enter into a depression in the first place.
I like this idea. But can Greece be self-sufficient? Does it have the agriculture and basic industry to provide the essentials for its population, even at a much-reduced standard of living, for a time at least?
If so, I’d say go for it. There is, in the end, much to be said for national dignity. And the Greeks don’t deserve what they are being put through now. Heck, I’d so like them to succeed in this that I’d contribute a little money to the cause, maybe plan a vacation there.
In fact, there might be an appeal in this. For those of us in the West and elsewhere thoroughly sick of being yanked around by a bunch of boffin privileged and psycho elites, Greece could be a cause, a rallying point.
A fiat currency is far and away the most important resource a nation can possess.
Greece could choose to have a fiat currency at any time. That is the advantage of being Greece, instead of being Ohio, circa 1931.
Instead, Greece has chosen to be exactly like Ohio, circa 1931, because they are unbelievably stupid.
Note: I am not picking on Greece (I like Greece). Outside of too smart China, every other nation I can think of either has made a foolish decision to forgo the advantages of having a fiat currency, as all the countries of the EU do, or has gone insane and given away their fiat currency to international crime syndicates (aka central banks), much like the US and the UK do.
Nonsense: a fiat currency is only worth the value of the real economy. Currency is the mirror of the overall economy, grosso modo, so a sovereign currency needs of a sovereign economy first of all. And Greece’s real economy is very weak.
(For the rest see above).
“But can Greece be self-sufficient?” This is the most important issue that has not be addressed by the Euro community. Efforts so far have been to re-coup as much return from bad loans as possible. Without self-sufficientcy expect political instability.
Will Europeon leaders detemine it to be a better option to retain Greece as a permanent pensioner or to risk having a volatile and potentially explosive country in their region.
That’s not very realistic and lays only on a merely theoretical notion of sovereignty. In practical terms, Greece is a subdivision of EU and NATO, as much as Ohio is of the USA and NATO, and in both cases the option of military by the “whole” is there in case of “rebellion”.
The details may be different but the result is probably the same: ask Haiti, a “sovereign country” under US-plus (plus France, UN, Brazil…) protectorate almost all the time (for example). While a rebellion by Ohio would be immediately quelled by the US Armed Forces without almost need of explaination, a rebellion by Greece will also be quelled, even if the means may be a tad more complex.
May I remind you what happened when Russia, a much larger sovereign country, declared non-payment of debt obligations and exit of WWI in 1917? English and French intervention for some five years. They were eventually expelled and Russia impossed its terms but it is unlikely that a small, navally exposed, country like Greece can do that.
“Sovereignty” is in the barrel of a gun, as Mao would say.
If Greece tried it anyway, and EuroNATO made the reality you describe very plain to see; would Greece be materially worse off after the crushing of the rush towards Sovereign Survivalism . . . than Greece will be anyway after 5 more years of the current Onward and Downward policy to stay in Euro Zoneistan?
Max, so true, and “let the devil take the hindmost.” The whole world is NOT YET One Global Fascist Empire. Of course, for Greece to do this would be a pyrrhic victory, not for the first time in history.
Ah, yes, why let’s reward the technocratic fascists who control the EU with what they really want:
“So, the way to do this is to unify the banking system, to Europeanise it in the European Union and have it being funded directly not through national governments.”
Gee, this really couldn’t have been the plan of disaster-minded neoliberal fascist capitalists from the beginning could it?
Let’s just give the bankers complete and total control of an even more unified system, only let’s wait until the suffering people “ask” for such a solution, right?
How clever.
Once you have abandoned any thought as to the legitimacy of the financial states that these sovereign nations have gotten themselves into, then you realize that this whole thing is a farce.
The ONLY bargaining chip workers have in modern society is a modified version of MAD:
We will no longer participate in the consolidating policies of the neoliberal fascist elite and our non-participation will destroy everything – now let’s really start having a dialogue about how much debt we owe.
This goes for Americans, Latvians, Greeks, the Irish, the Italians and the Spanish.
People have to be willing to call the bluff of these monsters who are trying to install a permanent vision of debt servitude upon the planet and the only way to do that is to hold a gun to one’s own head.
Cue all the people here who will scream: but what about the children and the sick and etc etc.
Well, people die in wars and MAKE NO MISTAKE this is a war being waged by the fascist elite upon the rest of humanity.
It’s just that the commoners haven’t exactly figured that out yet.
People have to realize that all of the casualties coming out of the crisis are casualties of war, clearly to be laid at the feet of the people orchestrating this crisis.
Just because this is a slow motion siege, don’t for a second not think that this is not indeed a siege.
+1, although I’m not sure things are quite so masterplanned by the elites.
Great evil minds think alike, hence the predictibility of the progression to fascism as the remedy for socialism which was the remedy for Democracy.
jsmith, it’s a German “morality play” like that show at Oberramergau. The drama’s denouement is known from the beginning, but must be “enacted” at length for full effect.
A more effective plan to destroy world “banking” as we have known it since 1945 could not have been devised. The terrifying thing is that no one has a good alternative because private property cannot legally be breached. (Except in the US by securitization fraud, but nevermind that). The chances of Greece having a Red revolution are zip. There are no Reds left. And the world is now stuck in a quagmire of private property and private contracts. Which could actually become totally worthless. Funny. The lesson the capitalist World has just learned is that all things hinge on the future and that is Varoufakis’ point. Humans don’t know how to thrive in the present. If we and Greece do not have a vision of the future everyone loses their economic sense and literally ceases to function. His point, the one he makes over and over, is that the Greeks and the world need a future; growth. And so he pushes investment. He’s right.
Susan, many a book has been written about just how to remove “private property” from the sacrosanct realm. Is it time to kill this sacred cow? It is the very soul, the very worm in the apple of “Capitalism: The Unknown Ideal.”
It is the heart and soul of “righteous” justification for The Shock Doctrine War for “Lebensraum” and “Property/Resources” captured by .99% Agents of the .01% Fittest of the Capitalist Aryan Eugenics “Might Makes Right” Regime. “A Moveable Feast” of Genocide, depending on the whims of the “NOBILITY and Analogous Traditional Elites in the Allocutions of Pius XII” from Age to Age. This is a “European” specialty, yielding “Strange Fruit.”
“FRUITS OF MERCHANT CAPITAL: Slavery and Bourgeois Property in the Rise and Expansion of Capitalism” by Fox-Genovese and Genovese (1983).
Has there been anyone among the business, media, judicial, or political elite, to call for a full audit of the Greek government, and the major contractors that it engaged. To quell te rumors and the hate mongers, it will be important to air out the truth of the situation with accurate numbers….it would be especially illustrative to everyone to outline German imports to Greece, especially those purchases made by the Greek government, and the taxes gained from that spending. Only good facts can clear the air.
I ask of this because even among my friends in Canada I hear much anti-Greek remarks; I do my best to counter this, but some hard objective facts, joined with logical of narrative truth, ould beach more convincing…
Alex Tspras had alluded to a audit, but he seems to be not emphasizing this vital need.
Because the official “record” is in ruins. Accidentally, no doubt.
I meant to reply to R Foreman above.
How is Greece that much different than Iceland? Iceland has even fewer resources than Greece. So how would an Icelandic solution for Greece be so beyond the bounds?
Greece is in a massive depression precisely because it is in the eurozone and has kept the euro. An exit won’t be easy but even if things got worse for a while with an exit, they are already getting worse without one.
And just to repeat, Europe of the eurozone has 6 problems:
1) Lack of a democratic fiscal and debt union
2) An insolvent predatory banking sector
3) An ineffective central bank
4) Mercantilist trade patterns with in the zone
5) Corrupt political classes
6) Rich kleptocrats calling the shots
Varoufakis’ program for Europe addresses only partially the first 4 of these. All must be dealt with for any solution to succeed.
How is Greece that much different than Iceland? Iceland has even fewer resources than Greece. So how would an Icelandic solution for Greece be so beyond the bounds?
Greece is in a massive depression precisely because it is in the eurozone and has kept the euro. An exit won’t be easy but even if things got worse for a while with an exit, they are already getting worse without one.
Oops, sorry for the partial repeat. I thought my comment hadn’t loaded, but it had, not at the end of the thread as I expected, but somewhere further up in thread.
Greece is very different than Iceland and even more so than Argentina. No energy. No exports. They even import hydroponic tomatoes from the northern EZ! Greece, import tomatoes? Yes, it’s that sad. The last I heard, German tourist reservations were down only 15%. Probably approaching 85% now. Very sad. Of course, that’s theoretically an opportunity, no?
Tomatoes? That’s really the best you can come up with?
No. I hope the present mess provides a chance for a people to rise to their best selves no matter how hard. Which means rejecting imported austerity (as well as tomatoes).
But the Greek 1% exports loads of cash to nests “offshore.”
Absolutely right. Or, as Maju said above, the lack of a sovereign currency being the problem is nonsense. The tokens are meaningless if there is no economy to reflect their use. Zimbabwe is not in the EZ, yet is a basket case. It is not an exception that can be explained away, but a case in point: leaving the EZ may accomplish very little for Greece.
The only thing that can save Greece is total default followed by Cuban-style communism with a pol-potian touch (so they grow their own tomatoes again). This surely implies being kicked out of EU but leaving the euro alone is of no use.
I am not impressed, this Prof, has no real idea just babble.
Co-dependency can be brutal…Germany just can’t get out of the loop…and this is about the 20th time Greece has played this little game. Bring on the drones…new same as the old…
check the time…
There are always options to explore for people and countries. Not just believing one can do nothing. Not just in the USA:
http://mikenormaneconomics.blogspot.pt/2012/06/ten-points-every-citizen-must.html
http://mikenormaneconomics.blogspot.pt/2012/06/9-goals-every-citizen-must-endorse-to.html
Why should it be impossible for Greece and the other IPSI’s?
Yanis spells out the structural problem, the mutual embrace of banks and states, in debt to one another, dependent upon one another, and that Greece is peripheral to the global capitalist system as well as the Eurozone, and not a critical element of making anything happen on its own. The core states, Germany and France are the strongest, most developed in both components, a strong central government with appropriately far reaching national bureaucracy along with gigantic banking corporations with global reach and Eurozone financial dominance. They can not change because even the tiniest reform is just moving the problem around, to Greece to Ireland but the capital flows move at internet velocity which is a new phenomenon compressing the time for cycles of crisis to occur.
It is a structural crisis, that will continue until an entirely new system is created that works for the nation state and the people who derive their power from banking, the capitalists. The capitalist are fighting to overcome the constraints of the nation state system, in this case the Eurozone. The feedback, the structure shattering and structure overwhelming feedback of debt greater than the real economy can service and the exhaustion of spaces to push to the problem over to, from the core to the periphery, enabled by the internet increase in the velocity of capital is creating a problem the likes of which they can as of yet overcome.
The politicians will not and can not abandon their territorial mission to control by force if necessary what goes on within their respective boundaries. The bankers are stuck with a digital transnational system that is collapsing, no matter what continent, zone or state they go to. To keep their power, they may have to abandon banking, but develop some new arrangement with the nations of the planet that allows them to have a new mutually beneficial alliance. It does not seem that bankers will continue their aristocratic entitlements via finance. They need something else to keep in power. But what will that new alliance be once the bank/state embrace collapses?
Tough Love and The Twelve Steps are in order?
the civil war in america was essentially what’s going on in europe.
the only difference is that it’s hard to imagine France and Germany attacking the rest of Europe in order to make them get in line.
If the greeks don’t want to change their way of life, they must either be conquered, or let go. in either case, they will lose. If they are ‘let go’ or given to their autonomy, they get back their indepedence which, if used well, can lead them to a massive recovery like iceland. more likely, it is a corrupt nation incapable of reforming itself. and with their indepedence, they may become more corrupt and privatize national resources to resemble an oligarchic state like russia.
in that scenario–the military stages a coup and takes control over the country eventually . The only question is if the Greek military is controlled by nationalists or controlled by pan-europeanists. If you remember, the last departing prime minister replaced ALL the heads of the greek military right before he left and abdicated control to a Goldman Sachs bankster Eurocrat.
It looks to me like the long-view is understood by the bankers very well. Get the military on your side, because win or lose, the country will fall apart, and at that point, you can bet your ass most people in the street will support a strong military over a corruption infused lawless criminal state that is a ‘democracy’.
I’m banking on the Greek Military’s allegiance to Nato and Europe Generally.
Something relatively “good” about the Greek Army is that it’s made up of recruits, most of which will not be sympathetic to any antidemocratic coup. It were the recruits who mostly made the Russian Revolution and it were the recruits who partly impeded the Fascist coup in Spain in 1936, by throwing the corpses of their putschist officers overboard.
A second element at play in Greece is very very extensive and deeply rooted True Left organizations accross the country with (unlike the Nazis) ample popular sympathies (and in some cases probably armed or able to arm themselves in no time).
They are not the only ones armed: when Nazi elements of the police recently attacked a Roma community (in petty revenge for a traffic accident) they were shot and repelled.
Whole department governorships, universities, hospitals have been captured in general strikes, a million people or more were not so long a go protesting in the streets of Athens while the police was powerless to do much about all it.
Internal quelling of a revolutionary drive is probably not possible and may instead be counter-productive. Surely what they will do is to use Turkey as battering ram to drive Greece through a Bela Kun moment, in whihch the Red government is rendered powerless to foreign aggression and eventually replaced by yet another tory-fascist regime.
Forgive my ignorance–you say the same thing above: on what pretext does Turkey intervene and in what way?
It’s my speculation, my “forecast” of course. Nothing is certain. But Turkey can intervene on a number of pretexts (sea borders for example, Cyprus) Turkey and Greece have been at odds for many decades and have bordered armed conflict many times (cf. en.wikipedia.org/wiki/Greek–Turkish_relations). Worse: a former Turkish PM recently acknowldged that brutal forest fires that ravaged Greece in the 1990s and probably also in 2007 were largely caused by arson attacks by Turkish spies (http://digitaljournal.com/article/316788).
Greece has no relevant border conflicts with other states but it has been at odds with Turkey since independence, 200 years ago. In the Cypriot crisis, it seems that Britain incited Turkey to intervene and make a partial genocide in the island so Cyprus would become too weak to force Britain to evacuate or renegotiate the status of the large extra-territorial military basis that the UK has in Southern Cyprus.
It’s very possible in my opinion that the relevant G7 powers could incite Turkey to intervene against Greece with whatever pretext. We have just seen in Syria (or previously in Iraq) how Turkey has not much regard for its neighbors borders and would be relatively glad to play a more active role as regional power, what is almost always dependent on NATO approval, of course.
Turkey under Erdogan actually had a “Zero Problems with Neighbours” policy that was modestly successful. Even Turkish-Armenian relations thawed somewhat.
But Erdogan’s policy sharply changed after the outbreak of the Syrian civil war. At first this perplexed me, since Turkish-Syrian relations had been at least businesslike beforehand (e.g. talk of a free-trade agreement, liberalization of rules for Turkish investors in Syria, agreements on Euphrates water, and so on).
But the Americans got Turkey to turn openly against Syria by (a) promising to abandon the Kurds, and (b) abandoning US support for Erdogan’s domestic political opponents.
Not hard to understand why the Americans have sold the Kurds out. Now that Saddam is gone and the Americans have finally pulled out of Iraq, the Kurds are no longer of much use to the Americans. When it comes to attacking Iran, for example, the Americans use the Arab minority in Iran, not the Kurds. In Syria, most Kurds support the Assad regime, so again the Kurds are not useful there. WRT Turkey, the Kurds have always been a regrettable embarrassment to both Americans and Turks.
Therefore, the Americans abruptly and unceremoniously dump the Kurds once they’ve pulled their troops out of Iraq. “Oh, thanks guys for sending your Peshmerga to help us crush Baghdad back in ’07. But the Turks are much more valuable to us overall. Sorry old chaps, Empire has its little necessities! ttfn.”
With both Iraq and Syria weakened, the Turks will soon be in a position to finally put paid to any Kurdish pretensions to eventual national autonomy. Erdogan can dangle this prize in front of the Turkish army officers who have always been his most dangerous domestic opponents.
However, with all this going on in the Levant, I should think the Greeks are pretty safe, unless some idiot Greek nationalist in Nicosia goes off the reservation.
tesla, ‘to resemble an oligarchic state like Russia” — this likely is what the Old Confederacy would have become; and inability to “master the slaves” likely would have led to genocide. But WHICH genocide, is the question.
“I’ve blacklisted you and have instructed all people with admin privileges to delete your comments if you prove to be so egocentric that you try to continue to comment here.”
There is nothing ‘egocentric’ in my comment. My only crime is to not follow the party line, which says that Germans are the real reason behind Greece being in the current shape. Greece has a democratic government for over three decades now. The government is chosen by Greek people. The government is sovereign and expresses the free will of the Greeks. Where was the snake-oil-salesman Mr. Yanis Varoufakis for over those 30 years? If he could not see that ‘Greece would be finished’ by the course it took over the last three decade, what is the guarantee that he is saying right things now?
Nobody says that “Germans” are to blame, although they have obviously benefited from the euro scheme, it’s a matter of oligarchies, not peoples. It’s the oligarchy, the only global oligarchy against all peoples: one by one and pitting us against each other, as the bourgeoisie has always done.
There is only one global Capitalist oligarchy. They do not have a single head but they are coordinated to some extent and certainly enjoy getting succulent profits year after year while the masses are pushed to the very edge of survival.
And that is exactly what they are doing with the Greek People: pushing them to death and desperation.
Incidentally “Germany” (Merkel and the Troika) has pushed hard to re-elect the same corrupt government of New Democracy that brought Greece to this disaster. So you should be happy that the same corrupt traitor oligarchs are still managing the turf.
I am sad. Sad for the Greek People and sad for the European People overall (and of course Humankind in general).
Moronic anti-German drivel has completedly corroded the credibility of this site. German taxpayers are arguably the biggest victims in this whole saga. A currency was forced upon them that they never wanted or needed, then they were lied to with the supposed inviolablity of the “no-bailout” clause.
Germany has alrealy imperiled its own fiscal position with all the bailouts and guarantees. However, when one reads this site one can only conclude that Germans are hopelessly evil tyrants determined to dominate and cause suffering. On the contrary, the modern German inclination is to be a larger version of Switzerland, and after the euro collapses, they should pursue that goal and leave their European “friends” completely responsible for their own prosperity.
Jermaine, face it: Germany cut a Faustian bargain with Brussels in order to EASE German Unification, to become the mercantilist Daddy Warbucks of the Euroland via Siemens and the other usual industrial suspects, selling the Vaterland’s goods to Southern captives along with the debt to purchase them. Now Germany is expanding its Lebensraum on the Mediterranean in ways even Clausewitz couldn’t imagine.
But history shows that Germany loves to play “the innocent,” so Germans can chime in with the chorus: “We are innocent.” The history of Germany is a Romantic tragedy of hedged truths by those who “cannot stand very much reality” when it comes in the form of frank criticism.
A GREAT admirer of the German people and Germany’s vast contributions to humanity tells the stark truth about the tragic flaw of the the “German nation” and its consequences: Peter Viereck: “METAPOLITICS: The Roots of the Nazi Mind.” This book should be required reading in Germany, for the insights it brings, from a well-spring of deep sympathy, holding up a mirror to reflect your collective face. Please consider learning from this book.
Dear Leonova, somewhat late to the party – I have to say a few words against what I at least see as simplifications here. It is not leading to too much reading Viereck concerning our problem. Victor Klemperer also (and in about the same time, during the Nazi-dictatorship) told us a lot about the Romantics and the Nazis. Just that it is more of an intellectual talk. It explains very very little. My family “experienced” the Nazis, it est, they were treated like all Jews were, some died in Auschwitz, younger ones were lost for ever in later life, a horror. It does not help much at all to read intellectual debates about Romanticism and Hitler, at least if you’d think you’d understand much about “the” germans this way. It is a nice intellectual play merely. No wonder such points were favoured by some bad philosophers later – for example Glucksman, who favoured Sarkozy later and is generally not very intelligent, rather a kind of lobbyist – he claimed that Heidegger, a real Nazi in his whole heart, was “the only german philosopher who wasn’t a Nazi…” (ask his teacher Husserl about that, or Hannah Arendt, if you could talk to the dead…). Hey, that sounds nice! Just that it is utterly wrong… But then, even Benn or Heidegger can’t explain such a thing like a fascist society like Hitler’s, Göbbel’s and Himmler’s… Of course not. It’s not that easy.
I don’t want to deny that there are some points in that romanticism-nazidom-thinking – but there are so many romantics or “neo”-romantics who have and had nothing at all to do with Nazis…fought them…
Yes, a certain conservative mind might be the end of romanticism, like “I don’t care about society, where is the blue flower”…(this is another simplification, space is limited here^^). Not even that is “true”, but later romantics indeed got conservative, around 1830 roughly.
But you can say the same of our postmodernists of the last decade, Deleuze, Derrida, Foucault – and what was made of them by postmodern intellectuals who rule universities still. The terrible situation in which poor workers and people without job are in Europe, and in Germany too more and more, was “not important” to them – they played their games, solipsistic games, mainly disregarded left wing political thinkers (ooh, that was cool, and pop-discourse was, and techno-discourse, ooh) and made room in universities for neoliberals without even understanding their own role…
There was a strong movement of that kind in Russia too, partly understandable after the USSR – times, maybe. What came “from the west” was cool, so to say. Yet there is no single book about the desaster this high-brow postmodern stuff got us – every criticism like from Sokal/Bricmont was just wiped away.
Vierbeck with his thesis and the desaster postmodernism in cultural scenes brought us are a bit of the same – they played a part, but can’t explain a lot. A huge majority of germans in 1928-33, say, had not the slightest clue or interest in “Romanticism”… never read a book, never listened to music, never liked that… It is as per usual a bit of “us intellectuals think we are so mightily important” – no….we’re not, at least up to now…Postmodernists flooded the “cool” media since 1990, that is a bit of influence (and another topic).
There is no “the” german, “the” greek, this simply is bad thinking of people, and of us intellectuals too… No wonder that in postmodern times at german universities many forgot which big role the big finance played in establishing Hitler, which big role the retarded lower middle class (“Kleinbürger”) played…
Back to our topic – Yanis Varoufakis is, like the majority of you all agree, on the right track… Additionally to his economical theses we need a deeper understanding of the mistakes of european (and here: french and german and many more) mistakes in postmodern intellectualism (posh, oh so ironical, cool, but solipsistic – it was even cool to “bash the workers”), to understand the new indifferent right-wing media, and more… How are economical facts spread, what do people know in societies where 40% don’t even vote…
I love intellectual debates too, very much so. But it is wrong how some forget about empirical facts… Would there have been no Novalis, no Schumann, Chopin and Mendelssohn-Bartholdy, no romantic philosophers, well, the Nazis would have been there all the same, in 1933…And Heidegger and Benn supported them first…that is what we can know.
I guess reading Saul Friedländer is much, much more helpful here than to read Viereck… One can profit much from reading “Nazi-Germany and the Jews”, 2 volumes, 1933-39 and 1939-45. Just my view, and all the best to you all.
Sorry but the common currency was mostly German-design. I think that the euro would have done better if Germany had taken a “British” approach of staying apart.
Overall the German economy (which relies on low working hours and a very strong welfare system, not at all what Greeks have even if the German media and politicians and some allegedly “German” and obviously non-German commenters insist in falsifying reality) has benefited the most from the euro and the EU’s expansion to the East (which was too radical), and is still doing so.
German taxpayers? I understand that German and other Euro-bosses are actually demanding the Southern countries to expand their tax base well beyond reason, not against the rich, as would be logical, but against the common citizens with indirect taxes like VAT and what not expanding wildly. All that so the French, British, German and Dutch banksters do not lose a cent.
It’s not only Germany and it’s clear that each case has its own part of interna responsibility but just playing the blame game when we all put our share to support German unification and the expansion to Eastern Europe, is totally unfair on other Europeans. European citizens who DO NOT enjoy the German salary high levels, the German low leevls working hours, the German excellent welfare system, etc. Instead we do suffer, thanks to that damn rigid “Deutsche Euro” German-like life costs that make impossible to lower salaries or any other costs.
The system is ill designed and German self-serving political direction is largely to blame.
These guys apparently did some work around a Greece exit and what it means for the equities and how to play it…
http://onlypricesmatter.wordpress.com/
http://onlypricesmatter.wordpress.com/2012/06/18/greek-equities-just-rallied-18-now-what-how-to-play-a-euro-exit-if-it-happens-11/
Germany: Bringing down Europe for the third time in 100 years. (cough, cough)
There is light at the end of the tunnel. It’s the train that’s running against us. Without breaks…