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<nettime> Yanis Varoufakis: A pressing question for Ireland before
Patrice Riemens on Mon, 22 Jun 2015 10:33:41 +0200 (CEST)

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<nettime> Yanis Varoufakis: A pressing question for Ireland before

Original to:

Yanis Varoufakis: A pressing question for Ireland before Monday?s meeting
on Greece

Saturday, June 20, 2015

Last Thursday?s eurogroup meeting went down in history as a lost
opportunity to produce an already belated agreement between Greece and its

Perhaps the most telling remark by any finance minister in that meeting
came from Michael Noonan (Ireland's finance minister -PR). He protested
that ministers had not been made privy to the institutions? proposal to my
government before being asked to participate in the discussion.

To his protest, I wish to add my own: I was not allowed to share with Mr
Noonan, or indeed with any other finance minister, our written proposals.
In fact, as our German counterpart was later to confirm, any written
submission to a finance minister by either Greece or the institutions was
?unacceptable?, as he would then need to table it at the Bundestag, thus
negating its utility as a negotiating bid.

The euro zone moves in a mysterious way. Momentous decisions are rubber-
stamped by finance ministers who remain in the dark on the details, while
unelected officials of mighty institutions are locked into one-sided
negotiations with a solitary government-in-distress.

It is as if Europe has determined that elected finance ministers are not
up to the task of mastering the technical details; a task best left to
?experts? representing not voters but the institutions. One can only
wonder to what extent such an arrangement is efficient, let alone remotely

Mild superiority

Irish readers need no reminder of the indignity that befalls a people
forced to forfeit their sovereignty in the midst of an economic
depression. They may, however, be justified to look at the never-ending
Greek crisis and allow themselves a feeling of mild superiority, on the
basis that the Irish suffered quietly, swallowed the bitter pill of
austerity and are now getting out of the woods.

The Greeks, in contrast, protested loudly for years, resisted the troika
fiercely, elected my radical left-wing party last January and remain in
the doldrums of recession.

While such a feeling is understandable, permit me, dear reader, to argue
that it is unhelpful in at least three ways. First, it does not promote
understanding of the current Greek drama. Second, it fails to inform
properly the debate on how the euro zone, and the EU more generally,
should evolve. Third, it sows unnecessary discord between peoples that
have in common more than they appreciate.

Greek deficit

Greece?s drama is often misunderstood in northern climes because past
profligacy has overshadowed the exceptional adjustment of the past five
years. Since 2009 the Greek state?s deficit has been reduced, in
cyclically adjusted terms, by a whopping 20 per cent, turning a large
deficit into a large structural primary surplus. Wages contracted by 37
per cent, pensions by up to 48 per cent, state employment by 30 per cent,
consumer spending by 33 per cent and even the current account deficit by
16 per cent.

Alas, the adjustment was so drastic that economic activity was choked,
total income fell by 27 per cent, unemployment skyrocketed to 27 per cent,
undeclared labour scaled 34 per cent, public debt rose to 180 per cent of
the nation?s rapidly dwindling GDP, investment and credit evaporated and
young Greeks, just as their Irish counterparts, left for distant shores,
taking with them huge quantities of human capital that the Greek state had
invested in them.

What Greece needs now is not more cutbacks that push an impoverished
populace into greater indignity, or higher tax rates and charges that
crush what is left of economic activity. These ?parametric? measures, as
the institutions call them, have been excessive, the result now being a
nation on its knees.

No, what Greece now needs desperately is serious, proper reforms. We need
a new tax system that helps defeat evasion and curtail political or
corporate interference, a corruption-free procurement system,
business-friendly licensing procedures, judicial reforms, elimination of
scandalous early retirement practices, proper regulation of the media and
of political party finances, etc.

During last Thursday?s eurogroup meeting I presented our government?s
comprehensive reform agenda to achieve these goals and announced our
formal collaboration with the Organisation for Economic Co-operation and
Development (OECD) to implement it. I also tabled a radical proposal for a
legislated debt brake mechanism that, triggered by an independent fiscal
council, would automatically reduce all state outlays by the degree
necessary to set the state back on course toward some pre-agreed primary

In addition to these reforms and our efforts to engage with the European
Investment Bank in order to channel much needed investments into the Greek
economy, I presented to the eurogroup well thought-out proposals for debt
swaps that would allow Greece to re-enter the capital markets and to
partake of the European Central Bank?s asset-purchasing programme
(commonly know as quantitative easing).

Deafening silence

Regrettably, my presentation was met with deafening silence. Excepting
Michael Noonan?s apt remark, all other interventions ignored our proposals
and reiterated the frustration of ministers that Greece had . . . no

An impartial spectator of our eurogroup deliberations would come to the
safe conclusion that it is a strange forum, one ill-equipped to forge
good, hard decisions when Europe truly needs them. Greece and Ireland took
a major hit early on in the crisis because the eurogroup was not designed
to handle crises efficiently. It is still unable to do so.

The pressing question our Irish friends must answer prior to Monday?s
extraordinary summit meeting on Greece is this: is it more likely that the
euro zone will become a better union to belong to if Greece is thrown to
the wolves, despite the type of proposals tabled at Thursday?s eurogroup
meeting? Or is a deal revolving around these proposals more likely to lead
to greater openness, efficiency and democracy?

Yanis Varoufakis is minister of finance of Greece


Interesting additional read:


"Analysis: Alexis Tsipras and his negotiators are not playing by Europe?s
established rules ? and a Grexit could end up hurting the EU more than

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