Tag Archives: Varoufakis

The beginning of the end for Greece?

Naked Capitalism has been quite pessimistic on the prospects of Yanis Varoufakis to turn the situation around, despite his considerable skills in economics and game theory. Some links on this (in chronological order):

Syriza Walks Back Initial Defiance

The ECB Ready to Put a Choke Chain on Syriza

Greek Finance Minister Varoufakis Retreats on Debt Writedowns, Public Spending Promises

The ECB now decides to play hardball. The most important thing that Greece needed was time. Time to negotiate, time to build an alternative discourse, time to make connections. The ECB put an end to that hope. The deadline now is the end of the month. Please read: The ECB Tightens the Choke Chain on Greece

With a bank run underway and funds unlikely to return any time soon, Greece is utterly dependent on ECB support unless it is willing to have its banking system collapse. And that blow in an already prostrated economy is something that Syriza cannot responsibly inflict on voters, particularly when it shifted its campaign in the weeks before election to a moderate, pro-Eurozone posture. The ECB has issued its diktat and Greece has no choice but to fold. Varoufakis may still win some concessions around the margin, but the message is clear: he will get no big breaks on any of his major issues. The most he can hope to get is whatever the Troika is willing to trade for the Syriza’s commitment to taking on the oligarchs and reforming its tax system.

This does not end well. Before you know it, there will be a new election, because the ECB crushed the new government, and then the Greek Nazis will come to power. Well played, Europe.


On the Ukraine: Three awkward questions for Western liberals and a comment on the EU’s role


Not related to economics as such, but very important questions and a reminder that this Ukraine crisis is much more complicated than the mainstream media presents it to be.

Niille, jotka ovat sitä mieltä, että Suomi on saavuttanut hyvän kompromissin

YLE uutisoi tästä lyhyesti näin, missä Suomen finanssiministeri mainitsee ne asiat hyvinä asioina, jotka Varoufakis alla kritisoi ankarasti.

“The Death of Direct Bank Re-capitalisation: Europe’s (newest) day of shame | Yanis Varoufakis” http://feedly.com/k/14bo3MK

Saksan tehdastilaukset alas – miten niin yllättävää?

Tekniikka ja Talous/Arvopaperi:

Odottamaton synkkä käänne Saksassa: Tehdastilaukset laskivat

Saksan tehdastilaukset laskivat tammikuussa 1,9 prosenttia joulukuusta. Markkinoilla odotettiin tilausten kasvavan 0,6 prosenttia.

Viime vuoden tammikuusta tilaukset supistuivat 2,5 prosenttia. Markkinoilla odotettiin 1,6 prosentin kasvua.

Miten niin tämä on yllättävää? Se,  että ‘odotettiin’ kasvua, ei kerro mitään. Odotukset ovat osoittautuneet vääräksi jo monta kertaa, mm. säästökuurien vaikutuksessa ja koko ajan EU:n kasvoluvut muokataan alas. Tämä ei ole lainkaan yllättävää: Saksalla on kauppataseen ylijäämä muun Euroopan kanssa, ja nämä säästökuurien kautta ‘asiakasmaiden’ taloudet supistuvat voimakkkaasti, jonka takia Saksa ei pysty enää myydä yhtä paljon niihin. Euroopalle kokonaisuudessaan on hyvä kehitys, että Saksan ylijäämä laskenee, koska se tekee kokonaiskorjauksen helpommin. Mutta se on hyvin suhteellista. Yanis Varoufakis:

in the case of intra-Eurozone trade, a persistent German trade surplus with a Peripheral country, like Spain or Greece, should, in theory, automatically be limited  by offsetting capital financial flows occasioned by sound banking decisions both in Germany and in Greece. .  […]

Alas, neither happens in reality automatically. In the case of the US trade deficits, for reasons that I try to explain in the Global Minotaur, the deficit can grow and grow without any counteracting forces limiting it from the side of capital flows. (And what a boon that was from the perspective of net exporters, like Germany, that it did not, as the growing US trade deficit kept their factories humming!) Similarly, in the Eurozone periphery, capital kept flowing in as if there were no tomorrow, oozing out of Germany’s and France’s banks which were, in City and Wall Street fashion, minting their own toxic money for years. And when the Credit Crunch hit in 2008, these capital flows were instantly reversed, causing the asset value bubbles that had built up in the Periphery to burst, thus giving rise to the so-called sovereign debt crisis – which of course is a pure banking and trade imbalance crisis.