06-07-2015, 07:20 PM
Magda Hassan Wrote:I can't find too much info on the new Finance Minister. An interesting article by AEP but can't trust his judgement as he is so ideologically skewed. Seems he adored Yani. And Yani loves Mario Draghi ! The new guy is a Marxist. Sure.
Quote:Greece creditors will gain nothing from toppling Europe-lover Yanis Varoufakis
If lenders think Varoufakis's touted successor will be a pushover, they are set to be disappointed. He shares little of his predecessor's European idealism
Varoufakis' parting shot: "I shall wear the creditors' loathing with pride" Photo: AFP/Getty
By Ambrose Evans-Pritchard, Athens
2:00PM BST 06 Jul 2015
136 Comments
Yanis Varoufakis was sacrificed to placate the European creditor powers.
Germany let it be known that there could be no possible hope of an accord on bail-out conditions as long as this wild spirit remained finance minister of Greece.
In a moment of condign fury, Mr Varoufakis had accused EMU leaders of "terrorism", responsible for deliberately precipitating the collapse of the banks in one of its own member states. (This is objectively true, of course)
"I shall wear the creditors' loathing with pride," he signed off in his parting shot, 'Minister no More'.
It is an odd end to the 'OXI' landslide in the referendum, a 61pc stunner that seemed at first sight to be a vindication of Syriza's defiant stand over the last six months.
He had looked like the hero of the hour threading through ecstatic crowds in Syntagma Square in the final rally. Fate plays its tricks.
What was it they said about @yanisvaroufakis in Brussels? Sidelined? The faithful don't think so - watch this #Greece pic.twitter.com/RXG7huP5zf"Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted partners,' for my … absence' from its meetings; an idea that the prime minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today."
Chris Morris (@BBCChrisMorris) July 3, 2015
His sacking is a paradox. He is the most passionate pro-European in the upper reaches of the Syriza movement, perhaps too much so since he thought it his mission to rescue the whole of southern Europe from 'fiscal waterboarding' and smash the 1930s contractionary regime of Wolfgang Schauble's monetary union for benefit of mankind.
"I wish we had the drachma, and we'd never entered monetary union. But once you are in, you don't get out without a catastrophe,"
Yanis Varoufakis
But then he was starting to harbour 'dangerous' thoughts. When I asked him before the vote whether he was prepared to contemplate seizing direct control of the Greek banking system, a restoration of sovereign monetary instruments, Grexit, and a return to the drachma -- if the ECB maintains its liquidity blockade, forcing the country to its knees - he thought for a while and finally answered yes.
"I am sick of these bigots," he said.
His fear was that Greece did not have the technical competence to carry out an orderly exit from EMU, and truth be told, Syriza has already raided every possible source of funds within the reach of the Greek state - bar a secret stash still at the central bank, controlled by Syriza's political foes - and therefore has no emergency reserves to prevent the crisis spinning out of control in the first traumatic weeks.
He was putting out feelers for technical experts in London, targeting veterans of Britain's ERM exit in 1992, though he was under no illusions that Grexit could ever be anything other than gruesome.
"I wish we had the drachma, and we'd never entered monetary union. But once you are in, you don't get out without a catastrophe," he said in May.
He was already looking ahead in our final interview, at his office on the 6th floor of the finance ministry. "Would the devaluation be big enough, that's the concern?" he asked, wearing his hat as a currency economist, almost as if he were talking about another country.
But separating his multiple characters as a Keynesian professor, Game Theory tactician, street fighter, rap star, and finance minister, was never easy. Deep down - despite his furious outbursts - he was never really willing to confront the European Central Bank head-on.
The hardline wing of the Syriza movement has been pushing for a temporary take-over of the Bank of Greece under emergency powers in order to issue liquidity - accompanied by a lawsuit at the European Court of Justice to throw the whole EU ruling system off balance - but Mr Varoufakis recoiled, deeming it too incendiary even for him. At heart, he is an admirer of Mario Draghi.
It appears that Euclid Tsakalotos will take over as finance minister. Another brilliant economist - educated at St Paul's and Oxford, with a Celtic wife - he has earned a reputation as safe pair of hands since becoming chief negotiator in the debt talks.
He is a man who keeps his outward emotions in check. Mr Tsakalotos will not be calling anybody a terrorist.
But be careful what you wish for. If the creditors think that he will be a push-over - more willing to accept terms that fall short of genuine debt relief - they are likely to be disappointed. He is comes from the radical Marxist wing of Syriza, and shares little of Mr Varoufakis's European idealism.
For Mr Tsakalotos, EMU membership is a cost-benefit calculus.
Scratch a little and you start to discover a eurosceptic who never wanted Greece to join the euro, indeed who already foresaw with remarkable prescience in this paper in 1998 that EMU would not bring about the convergence of the core and peripheral countries. He was miles ahead of the amateurs religiously touting the benefits of EMU.
For Mr Tsakalotos, EMU membership is a cost-benefit calculus. His own academic work has explored the issue of "first-mover advantage" after the rupture of currency pegs.
When we spoke at his office in the foreign ministry just before the referendum, he said that Grexit would be a very bad idea, but also gave me the strong impression that it is a matter of trade-offs. All depends on the exact terms that the eurozone is willing to offer his country, or whether it instead keeps Greece in a permanent "Nietzschean" cycle of control, as he puts it.
He also maintained the line - genuinely in my judgement - that Grexit would set off a political chain reaction and is therefore just as much a threat to the EMU Project as it is to Greece itself.
"I do believe if Greece was to leave, the eurozone would break up because it changes a monetary union into a hard-peg."
The crucial point is that EMU is an "irrevocable promise" that no country will ever devalue again. Once that is breached, financial markets will not lightly believe in the pledge again.
"People are wrong to say there's not much contagion now but that's not how it is going to work, maybe months later, in the following country in crisis. I fear that if it all breaks up we could then move to the kind of 1930s nationalist reactionary politics and the hegemony of the nasty Right," he said.
The difference is that Mr Varoufakis once loved 'Europe', and still cannot stop loving it. Mr Tsakalotos was never a believer in the first place.
Latest news on the Greece crisis
Yanis Varoufakis: His finest and most controversial moments
More on Euclid Tsakalotos, the likely new finance minister
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YAROUFAKIS GOES
By Alexander Mercouris
https://www.facebook.com/alexander.merco...cation=ufi
Quote:Before discussing Yaroufakis's resignation I want to clarify a widespread misunderstanding about him which has heavily distorted the media commentary about him outside Greece.
Though Yaroufakis may have appeared to many people over the last few months as the public face of Syriza, that is simply wrong.
Yaroufakis is by all accounts a brilliant academic economist. However until a short time ago he was not a member of Syriza and I am not sure that he is even a member now.
Though the media repeatedly calls Yaroufakis a "Marxist" (on the basis of one ill-judged remark) he is no such thing.
Yaroufakis is a British and US trained Keynesian economist closely aligned with the US Keynesians such as Stiglitz, Krugman, Reich and especially James Galbraith, who is a personal friend. He is also very close to Stuart Holland, a former leading voice within the British Labour Party.
So far from being a Marxist Yaroufakis is a supporter of more privatisation. He holds Australian citizenship, has strong family connections to the oligarchy (we were classmates in the same school) and his traditional social and political alignments are with the Anglophone world - the Democrats in the US and the Labour Party in Britain.
Yaroufakis is most definitely not a Syriza insider, he is not personally close to Tsipras and he is not one of the hardliners within Syriza - some of whom actually are Marxists in the classic sense - who regard Yaroufakis with deep mistrust and in some cases even dislike.
The reality is that behind his abrasive personality Yaroufakis has actually always been a moderate who has wanted to keep Greece within the euro.
It seems Tsipras trusted him to deliver on Syriza's election promise of an end to austerity within the euro by explaining to the eurozone leaders as only an economist can why that made economic sense. That is in fact the improbable feat Yaroufakis has tried to pull off as minister ever since he was appointed.
When it became clear 10 days ago that Yaroufakis could not deliver on this impossible objective, his days as a minister and as a senior member of Tsipras's team became obviously numbered. The fact that Yaroufakis is also deeply unpopular with the eurozone leadership would for Tsipras simply have been a further plus when the moment came to part with him.
The key hardliners within Syriza are Panayiotis Lafazanis, a former Communist who is now Greece's Energy Minister and who is the leader of Syriza's Left Platform, and Zoe Konstantopoulou, a fiery French trained human rights lawyer who is now Speaker of the Parliament.
Yaroufakis's problem is that he is one of those individuals who does not suffer fools gladly and this has made him a host of enemies both within the Eurogroup and within Syriza itself.
In my opinion he was never a good choice for Finance Minister. He is the sort of person who is best placed as a ministerial adviser - a post he previously held in George Papandreou's PASOK government. In the event he fell out badly with George Papandreou and I would not be surprised if unwisely he made it a condition of joining Tsipras's team that he be appointed Finance Minister so as not to repeat that experience again.
The real hardliners within Syriza - people like Lafazanis and Konstantopoulou - have been greatly strengthened by yesterday's referendum result. Their position is unaffected by Yaroufakis's departure and may even have been further strengthened by it.
None of this unfortunately means that Yaroufakis's departure is going to harden Syriza's position.
Tsipras still appears to think that he can trade his referendum victory for more concessions from the eurozone.
As to that I am sure Tsipras is wrong. The big question is what he will do when he finally realises it. Will he go with the hardliners and quit the euro or will he back down and split with the hardliners despite the fact that it is now clear that their stance commands majority support? Time is short, the clock is ticking and we should know soon enough.
"There are three sorts of conspiracy: by the people who complain, by the people who write, by the people who take action. There is nothing to fear from the first group, the two others are more dangerous; but the police have to be part of all three,"
Joseph Fouche
Joseph Fouche