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Sunday, December 11, 2011

On Prof. Yanis Varoufakis

Prof. Yanis Varoufakis runs a very interesting blog. His focus is not on Greece. Instead, his focus is on possible solutions for the European debt problem. His ideas are excellent and one needs to question why his Modest Proposal does not get more attention on the part of EU-elites.

It appears, however, that Prof. Varoufakis, purposely or not, also pursues a kind of hidden agenda. That hidden agenda seems to suggest that Greece is nothing other than the first domino to fall in a falsely-desigend Euro-structure and that, in consequence, all the blame goes elsewhere. Prof. Varoufakis has not yet made a single proposal as to how Greece could turn-around her economy. But he allows readers of his blog to post silly (if not rude and/or racist) opinions without challenging them. In fact, occasionally he even supports, for instance, the idea that "Germany is out to kill Greece".

In a recent posting, Prof. Varoufakis quoted his "good friend, co-author and interlocutor extraordinaire, Joseph Halevi, who spends half the year in a small town on the shores of an Italian lake". This good friend had written Prof. Varoufakis the following:

"The new Euro-17 Club is like the small town on the shores of the lake that I spend many of my days. The owner of the main café is also the main force in the local association of shopkeepers. He fights, successfully, against any proposal to open new posh cafés allowing only the lesser ones to exist. Hence he gets the best clientele. Many, if not most, come from Rome. Thus he runs a surplus with both his town residents and Rome. Importantly, he does not have to care about their finances. But the trick that makes his enterprise work consists in that the clients are external to him and he does not determine their source of income. Germany, on the other hand,  wants to be like the owner of that café. Yet it also determines a great percentage of the income of the clients. For this reason, and unlike the little town of my lakeshore, the new Euro-17 area is an unsustainable club".

I live by a lake, too, but it is not in Italy but, instead, in Austria. We also have "local matadors" who have enormous influence over what happens in the community. But to make an analogy of that with the perception of what happens between Germany and Greece these days (or rather: between Germany and the Southern Periphery), that - dear Joseph Halevi (and dear Prof. Varoufakis for adding your stamp of approval to the opinion of Joseph Halevi) - well, that is a joke!

Who, dear Mssrs. Halevi and Varoufakis, is the owner of the main café in Greece and also the main force in the Greek economy? Do you really believe that Germany is that owner? If you do, please take a sabbatical far away from Greece and ponder the situation from the distance!

The "shop owners" of the Greek economy are those who determine which professions need to be protected (my understanding is that, presently, way over 200 such professions are protected). There is no foreign country, Germany or otherwise, which is telling Greece to make that protection. On the contrary, they are hoping that Greece will do away with such socially unfair systems/structures. But Greece doesn't manage to make her economy any more competitive than the local community of where Mr. Halevi spends some of his time. Shame on Mr. Halevi's local community; shame on the Greek government which acts like the government of Mr. Halevi's local commity; and shame on all those who give credence to silly messages by adding their stamp of approval!

2 comments:

  1. Excellent as always. Many thanks.

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  2. Your statements in paragraphs 1 + 2 appear to be rather contradictory:

    "His ideas are excellent and one needs to question why his Modest Proposal does not get more attention on the part of EU-elites."

    "It appears, however, that Prof. Varoufakis, purposely or not, also pursues a kind of hidden agenda. That hidden agenda seems to suggest that Greece is nothing other than the first domino to fall in a falsely-desigend Euro-structure and that, in consequence, all the blame goes elsewhere."

    Prof. Varoufakis' hidden agenda is not some "also"; the whole purpose of his "Modest Proposal" is to cover up his hidden agenda. Which consist of sweeping the Greek problems under the rug and offering no realistic solution for them.

    What do I make of a plan that (at the time of your writing, in the last few days he has very much reworked his proposal) does not speak about debt cuts, but demands stress tests for banks assuming a 30% cut on state debt over 70-GDP%?
    What do I make of a suggestion that puts its whole trust not just in EU-funded (instead of private) investments, but wants the money largely "invested" in sectors like health, education, enviroment, where there is usually no return on capital (for an investor; for the society as a whole it may be different), no interest and no way to even recover the money invested?
    Why doesn't Prof. Varoufakis call for an improvement in conditions for private investors, when Greece ranks around # 100 in the World Bank list of investor-friendly countries?
    How can anybody call states "insolvent" (also in the new version of the MP) and at the same time demand that the ECB shoulders part of their debt?
    I truly fail to see why a political schemer like Prof. Varoufakis should deserve any attention - in European politics, or in academic circles.

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