Why we’ve been discussing the Greek ‘bail-out’ in the wrong way

By Stratos Ramoglou, University of Southampton

With another impending international debt deadline, Greece runs the risk of becoming the first OECD country to default on its obligations to the IMF. The country owes €448m – and many are once again raising the “spectre of Grexit” idea, accompanied by damning commentary on Greece’s failure to get successfully through the crisis.

Mainstream accounts of Greece’s economic situation emphasise how the so-called troika (the European Commission, European Central Bank and International Monetary Fund) has been aiding Greece by throwing it a much-needed financial lifeline of billions.

All this bail-out money is supposedly helping to keep the country afloat and prevent the Greek economy from going bankrupt. But in spite of all this aid, the Greek economy keeps sinking and Greeks apparently only seek to satisfy a growing appetite for easy money.

These popular accounts are, however, full of misconceptions over the nature of the financial aid Greece is receiving and serve to damage the prospect of a more balanced understanding of the situation – and effectively stymie chances for a more viable solution. Greece emerges as a country morally indebted to the troika’s help, only against the backdrop of a quite dangerous mythology, consisting of a constellation of falsehoods, dogmatic hypotheses and unwholesome oversimplifications.

But where has all the money gone?

The vast majority of the financial lifeline meant to save Greece has never entered the Greek economy. The record loan of €240 billion was mostly channelled directly for debt-servicing purposes. It was primarily meant to prevent – chiefly French and German – financial institutions from suffering losses, by ensuring that European taxpayers bought an (unpayable) debt. This, all in the name of “Greek aid”.

Moreover, Greece’s primary surpluses since 2013 mean that it needs cash only in order to service the massive debt that the bail-out money has kept in place. The Greek state has sufficient money for its domestic needs but cannot simultaneously afford to repay billions of debt at this point – not without turning a blind eye to its most needy citizens.

Still, the nature of the bail-out is overshadowed by deceptive representations which give the impression that the Greek economy is rescued by being the recipient of billions of euros. It would be truly interesting, indeed, to know how many of Europe’s taxpayers know that more than 90% of the €240 billion borrowed by Greece went directly to financial institutions.

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‘Talk less and do more’, Greek PM urges finance minister Yanis Varoufakis

AFP reports: The Greek finance minister Yanis Varoufakis – who has become a media phenomenon since Greece’s radical government came to power – has been warned by his own prime minister to talk less and do more.

Alexis Tsipras appeared to confirm reports he had ordered Varoufakis to keep a lower profile in an interview with the German magazine Der Spiegel on Saturday.

Asked if he had pulled up his charismatic finance chief for giving too many media interviews, Tsipras said: “I have called for less words and more action from all members of the ministerial council (the official name of the cabinet), not just Mr Varoufakis.”

The ruling Syriza party’s own newspaper, Avgi, complained of his “toxic overexposure” this week after much criticism – and not a little ridicule – of Varoufakis in the Greek media.

Avgi warned that Varoufakis was “going to spend all the profits” of the support he had garnered for Greece since his unexpected elevation to international economics rock star. [Continue reading…]

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Greece should not give in to Germany’s bullying

Philippe Legrain writes: Ever since the initial bargain in the 1950s between post-Nazi West Germany and its wartime victims, European integration has been built on compromise. So there is huge pressure on Greece’s new Syriza government to be “good Europeans” and compromise on their demands for debt justice from their European partners — also known as creditors. But sometimes compromise is the wrong course of action. Sometimes you need to take a stand.

Let’s face it: no advanced economies in living memory have been as catastrophically mismanaged as the eurozone has been in recent years, as I document at length in my book, European Spring. Seven years into the crisis, the eurozone economy is doing much worse than the United States, worse than Japan during its lost decade in the 1990s and worse even than Europe in the 1930s: GDP is still 2 percent lower than seven years ago and the unemployment rate is in double digits. The policy stance set by Angela Merkel’s government in Berlin, implemented by the European Commission in Brussels, and sometimes tempered — but more often enforced — by the European Central Bank (ECB) in Frankfurt, remains disastrous. Continuing with current policies — austerity and wage cuts, forbearance for banks, no debt restructuring or adjustment to Germany’s mercantilism — is leading Europe into the ditch; the launch of quantitative easing is unlikely to change that. So settling for a “compromise” that shifts Merkel’s line by a millimeter would be a mistake; it must be challenged and dismantled.

While Greece alone may not be able to change the entire monetary union, it could act as a catalyst for the growing political backlash against the eurozone’s stagnation policies.

For the first time in years, there is hope that the dead hand of Merkelism can be unclasped, not just fear of the consequences and nationalist loathing.

More immediately, Greece can save itself. Left in the clutches of its EU creditors, it is not destined for the sunlit uplands of recovery, but for the enduring misery of debt bondage. So the four-point plan put forward by its dashing new finance minister, Yanis Varoufakis, is eminently sensible. [Continue reading…]

The New York Times reports: Ending an acrimonious standoff, European leaders hashed out a deal on Friday to extend Greece’s bailout by four months, giving the troubled country a financial lifeline and avoiding a bankruptcy with potentially destabilizing consequences for the region.

The agreement, reached at an emergency meeting of eurozone finance ministers here, paves the way for Greece to unlock further aid from its bailout, worth 240 billion euros, or $273 billion. But the creditors will dole out the funds only if Greece meets certain conditions, setting the stage for tense negotiations that could unsettle the markets and create more political friction with Germany and other European countries.

If Athens moves slowly, it might not get the money for months. Or the deal could fall apart altogether, again raising the prospect of a messy Greek departure from the euro currency. [Continue reading…]

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Greek finance minister Yanis Varoufakis: ‘If I weren’t scared, I’d be awfully dangerous’

Helena Smith writes: Varoufakis is muscular, fit, amiable, slightly off-centre, everything he seems on camera. But what film does not capture is his energy, focus and intensity. An hour in his company will take you places; in our case, from Marxist theory to the joys of jazz; the eurozone and its incomplete architecture; sartorial tastes; Nazism; the bigness of America; austerity politics; debt traps; poetry; exercise and Varoufakis’ tendency to keep his hands in his pockets (the result of a shoulder injury).

The academic, who had a faithful following on the lecture circuit, despite being a self-described accidental economist, subscribes to the view that one should have an opinion about all and sundry. It is, he says, something he picked up long ago. “I was told, once, by a leftwing scholar that as a Marxist you have to do two things: always be optimistic and always have a view about everything. That advice still sounds good to me.”

At 53, Varoufakis is still clear that he “understands the world better” as a result of having read Marx. But he no longer considers himself a diehard leftie, whatever others may think. Rather, he says, he is a libertarian or erratic Marxist, who can marvel at the wondrousness of capitalism but is also painfully aware of its inherent contradictions, just as he is “the awful legacy” of the left. “It is a system that produces massive wealth and massive poverty,” proclaims the economist who taught at the universities of East Anglia, Cambridge, Glasgow and Sydney after gaining his doctoral degree at the University of Essex. “I don’t think you can understand capitalism until and unless you understand those contradictions and ask yourself if capitalism is the natural state. I don’t think it is. That’s why I am a leftwinger.”

More than that, Varoufakis is an iconoclast, a self-styled “contrarian” who is also an idealist, “because if you are not an idealist, you are a cynic”. And he has, he laments, lost a lot of friends on the left who believe that Grexit, Greece’s exit from the currency bloc, would be the country’s best course.

“It’s one thing to say you shouldn’t have gotten into the euro, it’s quite another to say you should get out of the euro. If we backtrack, we fall off a cliff. This is my argument to everyone.” Europe, he insists, is stuck with Greece because Athens is never going to ask to leave the euro. Fittingly, perhaps, the new MP, who has dual Greek-Australian citizenship, is not a signed-up member of Syriza, the party he now represents in the rambunctious Athens parliament. Syriza’s militant wing wants nothing more than to get out of the monetary union. [Continue reading…]

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Greece’s leaders stun Europe with escalating defiance

Ambrose Evans-Pritchard writes: Greece’s finance minister Yanis Varoufakis has spelled out the negotiating strategy of the Syriza government with crystal clarity.

“Exit from the euro does not even enter into our plans, quite simply because the euro is fragile. It is like a house of cards. If you pull away the Greek card, they all come down,” he said.

“Do we really want Europe to break apart? Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous. Who would be hit after us? Portugal? What would happen to Italy when it discovers that it is impossible to stay within the austerity straight-jacket?”

“There are Italian officials – I won’t say from which institution – who have approached me to say they support us, but they can’t say the truth because Italy is at risk of bankruptcy and they fear the consequence from Germany. A cloud of fear has been hanging over Europe over recent years. We are becoming worse than the Soviet Union,” he told the Italian TV station RAI.

This earned a stiff rebuke from the Italian finance minister, Pier Carlo Padoan. “These comments are out of place. Italy’s debt is solid and sustainable,” he said.

Yet the point remains. Deflationary conditions are causing interest costs to rise faster than nominal GDP in Italy, Spain, and Portugal, automatically pushing public debt ratios ever higher.

Berkeley economist Barry Eichengreen warns that Grexit would be “Lehman squared”, setting off a calamitous chain reaction with worldwide consequences. Syriza’s gamble is that the EU authorities know this, whatever officials may claim in public. [Continue reading…]

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Syriza has upended the rules of the Greek political system

Der Spiegel reports: Minister of Administrative Reform Georgios Katrougalos sits cheerfully in his new office and rejoices about his little revolution. He has just announced that soon the first 3,500 public-sector employees can return to work, including the famous cleaning ladies who led the protest against job cuts. With their rubber-glove-clad clenched fists, they embodied a feeling shared by many Greeks — that they had been mistreated by Europe. Now the cleaning ladies were becoming the symbol of the new beginning.

According to the administrative reform minister, these aren’t new hires — they are the reversal of unfair layoffs. “The cleaning ladies were the weakest, and the troika needed numbers.” He claims this is primarily a redress for the absurdity of the austerity measures. After they were let go, the financial authority’s 595 cleaning ladies — who had to be fired in September 2013 in order to fulfill the requirements of the savings plan — continued to receive 75 percent of their earnings. Their work was then done by private cleaning companies — in the end, the whole thing was more expensive than it had been before. It was these kinds of decisions by the previous government that had made the Greeks furious — and led them to vote for Syriza.

The administrative reform minister is a counterpoint to Athens’ new culture of laxity, characterized by Alexis Tsipras and Finance Minister Giannis Varoufakis, who like to appear tie-less in public. Katrougalos wears a suit and a tie. He has given up his role in the European Parliament and joined the government in order to reform the administration — a thankless task. He is a gambler, he says with a laugh. He loves calculated risk. All of his friends had advised him against it. “But I want to help shape the new beginning,” he says, “and only a left-wing party can tackle this kind of reform.”

Katrougalos says he wants to “break the system of patronage and clientilism.” The minister, who isn’t affiliated with any political party, is well-qualified for the job: He wrote his PhD about administrative reform in Greece. He comes across as open, non-ideological and competent — and he makes an effort to show that this new beginning will be different than the previous ones, that he too wants to save money, but on the backs of the politicians instead of the citizens. He wants to get rid of about 70 percent of the official cars used by top officials. He has removed the police surveillance in front of his ministry, because it sends a “bad signal” and is unnecessary in any case. And he has cut advisor positions — which had previously often been granted as favors — in half.

Something has happened in Greece that has not happened like this anywhere else in Europe: A handful of neophyte politicians, intellectuals and university professors have taken over the government. It feels like a small revolution instead of a handover of duties. And that’s not only because many members of the previous administration deleted their hard drives and took their documents with them, or that there initially wasn’t even any soap in the government headquarters. No, the new government has upended the rules of the Greek political system — and spurred into action a Europe that is still unsure how it should react to the rebels. [Continue reading…]

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Why Ernesto Laclau is the intellectual figurehead for Syriza and Podemos

Dan Hancox writes: When Ernesto Laclau passed away last April aged 78, few would have guessed that this Argentinian-born, Oxford-educated post-Marxist would become the key intellectual figure behind a political process that exploded into life a mere six weeks later, when Spanish leftist party Podemos won five seats and 1.2m votes in last May’s European elections.

Throughout his academic career, most of which he spent as professor of political theory at the University of Essex, Laclau developed a vocabulary beyond classical Marxist thought, replacing the traditional analysis of class struggle with a concept of “radical democracy” that stretched beyond the narrow confines of the ballot box (or the trade union). Most importantly for Syriza, Podemos and its excitable sympathisers outside Greece and Spain, he sought to rescue “populism” from its many detractors.

Íñigo Errejón, one of Podemos’s key strategists, completed his 2011 doctorate on recent Bolivian populism, taking substantial inspiration from Laclau and his wife and collaborator Chantal Mouffe, as he explains in this obituary. To read Errejón on Laclau is to take an exhilarating short-cut to understanding the intellectual forces that are shaping Europe’s future. Syriza’s victory in Greece, for one, has been directly driven by the ideas of Laclau and an Essex cohort that includes among its alumni a Syriza MP, the governor of Athens, and Yanis Varoufakis. Syriza built its political coalition in exactly the way Laclau prescribed in his key 2005 book On Populist Reason – as Essex professor David Howarth puts it, “binding together different demands by focusing on their opposition to a common enemy”.

On the Mediterranean side of austerity Europe, the common enemy is not hard to discern. During Spain’s massive indignados protests and encampments of summer 2011, one of the principal slogans was the quintessentially populist “We are neither right nor left, we are coming from the bottom and going for the top”. It is, in Laclau’s terms, “the formation of an internal antagonistic frontier” like this, between a broadly defined sense of “the people” and a ruling class unwilling to yield to their demands, that readies the ground for a populist movement like Podemos.[Continue reading…]

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As Greece rebels, the notion of debt forgiveness returns

Peter Eavis reports: Europe’s most powerful policy makers dismiss the idea, investors fear it, and it would almost certainly face fierce resistance from within the Continent’s richer countries.

Yet talk of slashing the government debt loads of European countries, starting with Greece, is back. For all the opposition, the idea has resurfaced with a vengeance in recent days as the new government in Athens, facing a cash squeeze and aiming to make life easier for its citizens, looks for immediate ways to reduce what it owes. The pressure on Greece increased on Wednesday when the European Central Bank cut off direct funding to Greek banks, forcing them to rely instead on emergency loans from the country’s own central bank. The move followed a meeting in Frankfurt between Mario Draghi, the central bank’s president, and Yanis Varoufakis, Greece’s new finance minister, and appeared to signal a hard line in negotiations over debt. The E.C.B.’s announcement roiled markets in the United States late in the trading day.

At the heart of Greece’s problems is its eye-popping government debt load, equivalent to 175 percent of the country’s gross domestic product. Now, as Greece’s nightmare grinds on, some economists fear that high debt levels could hamper recoveries in other countries. That is why they are pressing for policies that would alleviate the debts of other European nations, to help get the region out of its rut.

“Greece is more acute, but it is not as completely different as it is portrayed,” said Kenneth Rogoff, an economics professor at Harvard. The economies of Spain, Portugal and Ireland, he added, might benefit from such “haircuts” to their obligations. Podemos, a Spanish political party that has surged in popularity in recent months, wants to restructure the country’s government debt to make it less of a burden. [Continue reading…]

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A finance minister who doesn’t serve the banks

Simon Jenkins writes: A yawning gulf has opened in the world of financial diplomacy. It is not whether to bail out Greece yet again. It is how a Greek finance minister should dress when visiting a chancellor of the exchequer. Yanis Varoufakis arrived in Downing Street yesterday in black jeans, a mauve open-necked shirt that was not tucked in, and the sort of leather coat Putin might wear on a bear hunt. If George Osborne still didn’t get the point, Varoufakis had a No 1 haircut. What was going on?

What was going on was real life. If I were a banker and had seen Varoufakis arrive in the same dark suit as Osborne was wearing, what would I think? I would think here was a man eager to be accepted into the club. He dresses like a banker, therefore he thinks like a banker, which is how today’s finance ministers are supposed to think. I would be reassured.

We don’t want bankers to be reassured by Varoufakis just now. We want them to be terrified. Don’t mess with me, he is saying. I have a sovereign electorate behind me, and I have a bankrupt country. When your banks go bankrupt you bail them out. When your businesses go bankrupt you write off their debts and let them start again. Do the same to me. Your banks have lent my country crazy sums of money, way beyond the bounds of caution or common sense. Now you honestly think you will get it back. You can’t. Read my lips, look at my jeans, feel my stubble. You can’t. Get real. [Continue reading…]

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Greece will repay ECB, IMF, reach deal with EU, Tsipras says

Bloomberg: Prime Minister Alexis Tsipras sought to repair relations with Greece’s creditors ahead of a diplomatic push to win support for his economic program, as euro area officials said they’re looking for concessions from the new government.

Greece will repay its debts to the European Central Bank and the International Monetary Fund and reach a deal “soon” with the euro-area nations that funded most of the country’s financial rescue, Tsipras said in a statement e-mailed to Bloomberg News on Saturday.

“The deliberation with our European partners has just begun,” Tsipras said. “Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole.”

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Angela Merkel must accept that her austerity policy is now in tatters

Joschka Fischer writes: Not long ago, German politicians and journalists confidently declared that the euro crisis was over; Germany and the European Union, they believed, had weathered the storm. Today, we know that this was just another mistake in a continuing crisis. The latest error, as with most of the earlier ones, stemmed from wishful thinking – and, once again, it is Greece that has broken the reverie.

Even before the leftist Syriza party’s overwhelming victory in the recent Greek election it was obvious that, far from being over, the crisis was threatening to worsen. Austerity – the policy of saving your way out of a demand shortfall – simply does not work. In a shrinking economy, a country’s debt-to-GDP ratio rises rather than falls, and Europe’s recession-ridden crisis countries have now saved themselves into a depression, resulting in mass unemployment, alarming levels of poverty and scant hope.

Warnings of a severe political backlash went unheeded. Shadowed by Germany’s deep-seated inflation taboo, Chancellor Angela Merkel’s government stubbornly insisted that the pain of austerity was essential to economic recovery; the EU had little choice but to go along. Now, with Greece’s voters having driven out their country’s exhausted and corrupt elite in favour of a party that has vowed to end austerity, the backlash has arrived. [Continue reading…]

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How Syriza could make a debt relief deal palatable to Germany

Henning Meyer writes: Following the formation of the new Greek government we are entering a period of negotiation. This is good news, and overdue given the scale of the social and economic crisis in Greece. The new prime minister, Alexis Tsipras, has announced that he will not unilaterally walk away from Greek obligations but seek dialogue with creditor countries. He has a clear mandate for change, but it is also important to bear in mind the constraints on the other side of the negotiation table.

Angela Merkel’s coalition government in Germany also operates within clear political limits, partly because a faulty narrative about the origins of the eurozone crisis has been circulating in Germany for half a decade. This is very unfortunate but makes a full U-turn on Greece unlikely. The anti-euro AfD – Alternative for Germany – has been gaining political support since the European elections last May, and is now trying to use the anti-Islam Pegida protests in some parts of the country to further draw disaffected citizens into its orbit. These are new phenomena in German politics and help to explain – though not excuse – the stubbornness with which misguided policies have been pursued. As in other countries, the German political elites are afraid of losing traction in society and have become excessively cautious as a result.

But there is light at the end of tunnel. The opposing parties might be at loggerheads at the moment but there is scope for a political deal that would allow both sides to keep their integrity. Here are the three things that need to come together. [Continue reading…]

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Syriza’s finance minister has a big idea – but will Germany accept it?

Linsey McGoey writes: Since Syriza’s victory in the Greek elections on Sunday, it is the new Essex-educated finance minister Yanis Varoufakis who has been grabbing most of the headlines. Much of his appeal lies in his iconoclasm: in his 1998 book Foundations of Economics, a kind of bible for the growing alternative economics movement, he cites the British Keynesian Joan Robinson: “The purpose of studying economics is to learn how not to be deceived by economists.”

But what can we expect from this reluctant economist and reluctant politician intellectually? Announcing his decision to run for a parliamentary seat on Syriza’s ticket on his personal blog, Varoufakis stressed that he never wanted to run for office, preferring to channel his policy ideas across the political spectrum. But he grew tired of seeing his policies ignored. Above all he wants to draw attention to an idea that was first conceived by one of his major intellectual influences: John Maynard Keynes. It’s an idea that even ardent Keynsians often neglect; an idea that Keynes dramatically announced to a group of sceptical listeners at the 1944 Bretton Woods conference; an idea that runs diametrically counter to the current policies of Germany’s government. That idea is a global surplus recycling mechanism. [Continue reading…]

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Why the Irish political elite is terrified of Syriza

Fintan O’Toole writes: Irish 10-year bond interest rates were trading at under 1.1 per cent at the beginning of this week, while Greek 10-year bond interest rates are close to 9 per cent. There’s a strong financial incentive for Ireland to place as much distance between itself and Greece as it possibly can, all the more so because it is hoping to replace some of its expensive IMF loans with cheaper money raised on those international markets.

But beyond this, there is a deeper terror — the fear that Syriza might actually succeed. The strategy adopted by both the governments that have been in office since 2008 has been one of strict obedience to the demands of its lenders. Everything has been sacrificed — up to and including national sovereignty during the so-called bailout by the Troika — in order to place Ireland as the Eurozone’s exemplary pupil.

There has been a mutual interest at work here. Angela Merkel and the Eurozone leadership need a success story in order to prove that the dual policy of socialising private debt and imposing austerity is both legitimate and effective. The Irish government needs to be able to show its own electorate and international lenders that it is indeed a great success, that the imposition of so much private debt on citizens has made both moral and economic sense.

Hence, Ireland does what it is told and gets in return the gold star for diligence, effort and perseverance. Just last week, the IMF’s Christine Lagarde told The Irish Times that Ireland has “set standards” for other indebted nations to follow — Greece was hardly far from her mind.

If Syriza succeeds in getting major concessions on debt, this whole strategy will be exposed as folly. The Irish political and technocratic elite is deeply invested in an essentially religious narrative: Ireland sinned, Ireland confessed, Ireland did penance, Ireland has been forgiven, Ireland will be rewarded. But if Greece stops doing penance and is nonetheless rewarded, this begins to look like what it almost certainly is — a rather childish view of how power works in the world. [Continue reading…]

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Follow your convictions — this could be the end of the politics of fear

George Monbiot writes: Here is the first rule of politics: if you never vote for what you want, you never get it. We are told at every election to hold our noses, forget the deficiencies and betrayals and vote Labour yet again, for fear of something worse. And there will, of course, always be something worse. So at what point should we vote for what we want rather than keep choosing between two versions of market fundamentalism? Sometime this century? Or in the next? Follow the advice of the noseholders and we will be lost forever in Labour’s Bermuda triangulation.

Perhaps there was a time when this counsel of despair made sense. No longer. The lamps are coming on all over Europe. As in South America, political shifts that seemed impossible a few years earlier are now shaking the continent. We knew that another world was possible. Now, it seems, another world is here: the sudden death of the neoliberal consensus. Any party that claims to belong to the left but does not grasp this is finished.

Syriza, Podemos, Sinn Féin, the SNP; now a bright light is shining in England too, as the Green party stokes the radical flame that Labour left to gutter. On Tuesday morning, its membership in England and Wales passed 50,000; a year ago it was fewer than 15,000.

A survey by the website voteforpolicies.org.uk reports that in blind tests (the 500,000 people it has polled were unaware of which positions belong to which parties), the Green party’s policies are more popular than those of any other. If people voted for what they wanted, the Greens would be the party of government.

There are many reasons for this surge, but one of them must be a sense of popular ownership. Green party policies are determined democratically. Emerging from debates led mostly by younger members, they feel made for their time, while those of the major parties appear trapped in the 1980s. [Continue reading…]

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Yanis Varoufakis — Greece’s new finance minister

The New York Times reports: The leftist-led coalition that won Greece’s elections unveiled its government on Tuesday, with the crucial post of finance minister going to an economist who has called the eurozone’s austerity policies “fiscal waterboarding.”

The new finance minister, Yanis Varoufakis, a professor and avid blogger, will confront Greece’s international creditors in tough talks over the austerity policies, widely despised by the Greeks. Those talks could have profound consequences for Greece, the future of the euro currency and the financial integration of the European Union.

Twenty-two ministries have been streamlined to 10 in the new cabinet, all but one held by members of Syriza, the radical-left party that won the most votes in the Sunday elections and that has vowed to renegotiate the country’s onerous debts.

The Defense Ministry post went to Panos Kammenos, the leader of Syriza’s coalition partner, the right-wing Independent Greeks, and a handful of deputy posts went to his colleagues.

But the most important post filled by the new prime minister, Alexis Tsipras, the 40-year-old leader of Syriza, was his choice of finance minister: Mr. Varoufakis, 53, who left a teaching post at the University of Texas to join Syriza’s election campaign. [Continue reading…]

Yanis Varoufakis interviewed by Johanna Jaufer: You have been a politician for only three weeks now…

Two weeks.

Have you had to think it over very much? In your blog you wrote that you were frightened, too.

It was a major decision. Primarily, because I entered politics in order to do a job that I always thought should be done and I was offered the opportunity to do it. It has to do with the negotiations between Greece and the European Union if Syriza wins, which is an extremely scary project and prospect. At the same time I am an academic, I am a citizen, an active citizen, so I am used to dialogue where the point of the conversation really should be that I learn from you and you learn from me – we are going to have disagreements, but through these disagreements we enrich each other’s points of view.

It’s not about winning the other one over…

That’s right – actually in politics, it is worse: each side tries to destroy the other side – in the eyes of the public – and that is something that is completely alien to me and something that I didn’t want to get used to.

What about your university job? Have you put it on hold?

Yes, indeed. I have resigned from University of Texas. I still retain my chair at the University of Athens – without pay – and hopefully it won’t be too long before I return to it.

Wouldn’t you be ready to stay in a government for a longer time?

No, I don’t want to make a career out of politics. Ideally, I would like somebody else to do it, and to do it better than I. It’s just that this was a window of opportunity, because Syriza rising to power is a precedence. So, it was a small window of opportunity to get something done that would not have been done otherwise. I’m not a prophet, so I can’t tell you where I will be in two, three, five, ten years. But if you’re asking me now, my ideal outcome would be that our government succeeds in renegotiating a deal with Europe that renders Greece sustainable, and then other people, you know… power should be rotated, no one should grow particularly fond of it. [Continue reading…]

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Greece has voted for a new politics, not just a new party

Yiannis Baboulias writes: Prior to the financial crisis of 2008, anyone familiar with the Greek nation and its politics would have been surprised by the events of Sunday night. Syriza leader Alexis Tsipras addressed a crowd of thousands who had gathered in central Athens to celebrate his party’s general election victory. The new Greek Prime Minister—state educated, young and not related to previous prime ministers—is unlike any of his predecessors. His party is a coalition of the radical left, that was born as a fringe party six years ago.

“The Greek people gave us a clear, indisputable mandate to end austerity,” said Tsipras. But despite the fact Syriza is the outright winner, it didn’t quite manage to get the seats it needed to form a majority government (increasing its share of the vote from 4.6 per cent in 2009, to more than 36 per cent now.) Yesterday we learned that it would form a coalition with the populist right, anti-austerity party Independent Greeks.

Analysts rightly point out that the parties will be uneasy bedfellows. Syriza comes from a breakaway faction of the traditional communist party, and is itself a coalition of smaller entities that range from the centre-left to anarchism. The Independent Greeks on the other hand broke away from the centre-right party New Democracy when it signed up to austerity after its election in 2012. [Continue reading…]

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Syriza’s victory

James Meek writes: Syriza’s victory in the Greek general election is a hopeful moment for Europe. It shows how a radical left-wing political movement, brought together in a short time, can use the democratic system to attack three menaces: the rentier lords of jurisdiction-hopping private capital, the compromised political hacks of the traditional parties who have become their accomplices, and the panphobic haters of the populist right.

Nationalist-conservative movements, it turns out, don’t have a monopoly on the anti-establishment wave. The future doesn’t have to belong to Golden Dawn, Ukip, the Front National, Pegida, the Finns Party, Partij voor de Vrijheid or the Sweden Democrats. It could belong to Syriza, or Podemos, or Die Linke, or to an as-yet non-existent British movement – anti-austerity, pro-Europe – which would scoop up votes from Labour, Liberals, the Scottish National Party, Ukip and the Greens.

And these left-wing movements – so it seems now, savour it while you can – don’t have to rely on street protests to get what they want. They can get it through an instrument long considered by socialist radicals to be redundant: the ballot box.

The ascent of Syriza signifies the emergence of a trans-European politics in a way the previous rise to prominence of the likes of the Front National and Ukip haven’t. The eurosceptics want to push the European Union away. They want their politics to be more national. What makes Alexis Tsipras radical is not what he wants to do in Greece, but what he wants to do in Europe. [Continue reading…]

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