Being a Greek I always found Varoufakis to be full of shit (even a puppet of the Elite that plays controlled opposition role) - and I'm from the "anti-memorandum / anti-troika" group so to speak.
The reason is that his agenda is more pro-european than pro-greek. He is pro-euro (the currency) in a degree that is disgusting. Greece needs to have a sovereign currency. The euro and the euro-policies have buried us alive. His "no" to the troika this afternoon is actually a no to the low-level employees and beaurocrats that were checking in on the government progress. He said he is committed to the ecb, imf and eu and keeping government surpluses running though.
By the way he dislikes bitcoin, its apolitical nature and he has drawn parallels to tulip mania. That's another reason why he is full of shit.
Funny how to everyone outside of a particular country, their politicians look like saviours whereas to their own country people they are hated.
I actually thought this was a genuine piece of progress. So you're saying it's all just posturing ? They're really full of B.S. and the rejection of the bailout isn't genuine ?
If so, that is depressing as f*ck.
B.T.W. I completely agree with you on Greece just launching its own currency. That's what I was hoping they would end up doing.
This is probably posturing. SYRIZA (Tsipras, Varoufakis etc) as a party is committed to the eurozone / euro etc. Varoufakis' theories in particular were shot down in 2013 when Cyprus was facing a liquidity crisis. Varoufakis always maintained (prior to that) that the ECB will never resort to that - yet it did. And people were crowding his blog and telling him "Yannis, what do you have to say now?"... and he said "Aaaahhh Greece might be different because it's bigger than Cyprus", LOL.
Costas Lapavitas, another economist that has been elected with SYRIZA, is a straight shooter in relation to the euro and the national currency. He said that it is in Greece's best interest to erase debt and leave the euro. Dimitris Kazakis, another economist (not of SYRIZA) also maintains the same position. Lafazanis of SYRIZA is also in the same wavelength.
The whole political spectrum in Greece is sold-out. To give you an idea, in the question of whether Greeks prefer
-memorandums and the euro
or
-no memorandums and the drachma
...the majority says the later. Yet the parliamentary representation of a ~52-60% wave in society is just ...5% in terms of parliament seats. Why? Because unlike Italy, where ITexit is the political position of most opposition parties and leaders, in Greece most parties are aligned to the euro which has destroyed us.
The treaty of Maastricht predicted sovereign debt level at <60% as a barrier of entry to the euro. Greece signed up for the euro at 100% debt which was 70% over the target. At that point (2001), a mountain of drachma-denominated debt was converted to euros that could never be repaid - only rolled over to the next bond buyer. It was the scam of the century. 8-9 years later it all collapsed as bond buyers didn't want to take the risk.
SYRIZA and Varoufakis maintain that if we erase half the debt we can actually have a viable debt. This is bullshit. With 90% (instead of 180% now) debt-to-gdp ratio we are going nowhere. Even if the entire debt was erased, Greece would still have to go out and get brand new debt. Why? Because of its banking system that is not supported by ECB directly. The ECB requires the country to guarantee the loans, creating new government debt.
Cyprus didn't have an issue of debt, yet due to a few billions of liquidity missing from the Cyprus banking system, they now have a debt issue for this very reason.
With the national currency you can automatically guarantee your banks (in the new currency, say the Drachma) and then proceed with your economic planning to restore development. You might face a -20 / -30% one-off drop in GDP but then you climb back up in a very rapid manner. As it happened here, we have the -30% in GDP since 2009 but no recovery in sight. Debt went from 120% to 180% and unemployment from 7-8% to 30%.
Everything that we were told that would happen if we left the euro, actually happened while in it: Unemployment, problem in acquiring fuel, food, medicine (not because they were not available on the market, but because people's purchasing power dropped dramatically), drop in purchasing power, people losing their houses etc. The whole situation would have been resolved and Greece would be ok if in 2010 we erased the debt and got on to the national currency.
As for Oblox's question about the national currency and trade, well, international trade is always conducted through the "buffer" of foreign reserves that a country has. All the european countries outside the euro do that, as did the eurozone countries prior to entering the euro, as do all other countries globally. It's not an issue as long as your trade of goods and services is balanced. In other words if you import 50bn euro stuff and export 40bn euro stuff, you need 10bn euro in loans - or you'll have to prioritize imports. Greek imports are larger than the exports but in the services sector (primarily ships and tourism) we have a huge surplus which balances both out. So goods+services together are balanced in terms of in/outflows.
