Heard the news? Greece’s finance minister is no extremist – THE TELEGRAPH

Yanis Varoufakis: Greece’s future finance minister is no extremist

The man touted as frontunner to be Syriza’s finance minister is not the socialist firebrand which one might expect

Syriza, a hard left party, that outrightly rejects EU-imposed austerity, has given Greek politics its greatest electoral shake-up in at least 40 years.

You might expect the frontrunner for the role of finance minister to be a radical zealot, who could throw Greece into the fire.

He is not.

Yanis Varoufakis, the man tipped to be at the core of whatever coalition Syriza forges, is obviously a man of the left.

Yet through his career, he has drawn on some of the most passionate advocates of free markets.

While consulting at computer games company Valve, Mr Varoufakis cited nobel-prize winner Friedrich Hayek and classical liberal Adam Smith, in order to bring capitalism to places it had never touched.

He clocked that there was an irony to market-based economies. We have markets for land, sheep, labour and even money itself. But inside companies themselves, exist “market-free zones”.

“Firms can be seen as oases of planning and command within the vast expanse of the market,” Mr Varoufakis has written.

His work at the tech company helped it in “trying to become a vestige of post-capitalist organisation within capitalism”.

Yet while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project.

Speaking to the BBC on Monday, he said that it would “take an eight or nine year old” to understand the constraints which had bound Greece up since it “tragically” went bankrupt in 2010.

“Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer,” he said.

“What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony,” he added.

Greece’s public debt to GDP now stands at an eye watering 175pc, largely the result of output having fallen off a cliff in the past few years. Stringent austerity measures have not helped, but instead likely contributed.

Despite this, the Greek government faces a €2.3bn (£1.7bn) revenue shortfall in 2015. It will likely be Mr Varoufakis’ job to make the best of an impossible situation.

The first thing he will seek to tackle is Greece’s humanitarian crisis. “It is preposterous that in 2015 we have people that had jobs, and homes, and some of them had shops until a couple of years ago, that are now sleeping rough”, he told Channel 4.

The party may now go after multinationals and wealthy individuals that it believes do not pay their way.

Born in Athens in 1961, he moved to England to study mathematical economics at Essex. From there, he went on to earn his PhD in Mathematics and Statistics, taking university appointments at Cambridge, East Anglia, Sydney, and Glasgow.

He has since become a visiting professor at both of the University of Athens and the University of Texas. It is at the latter than he co-authored “A Modest Proposal for Resolving the Eurozone Crisis“, along with prominent left-wing economist James Galbraith.

There is no question that Mr Varoufakis has an awareness of Greece’s precarious situation. Speaking to Bloomberg TV after Syriza’s win, he made it clear that there was “a deep sense … of fear of what’s coming ahead”.

Greece’s economic pain has an almost ludicrous cause – a shortage of demand. If the country had entered the crisis with its own central bank then a monetary response could have been forthcoming.

Instead, political obstacles have prevented the euro area’s central bank from doing its work, and Greece has paid a heavy toll.

Years on from the Lehman collapse Greece now endures a jobless rate of 25.8pc, according to Eurostat estimates. More young Greeks are unemployed than in work.

The single currency project has fallen under heavy criticism. The economies that formed it were poorly harmonised, and no amount of cobbling together could make the end result appear coherent.

Michael Cembalest, of JP Morgan, calculated in 2012 that a union made up of all countries beginning with the letter “M” would have been more workable.

The same would be true of all former countries of the Ottoman Empire circa 1800, or of a reconstituted Union of Soviet Socialist Republics, he found.

Yet now a euro exit is almost certainly not an option, nor is it Mr Varoufakis’ preference.

A disorderly break up would almost certainly result in a merciless devaluation of whatever currency Greece launched, and in turn a default on debt obligations. The country would likely be locked out of the capital markets, unable to raise new funds.

As an economy, Greece has only just begun to see output growth return. GDP still remains more than 26pc below the country’s pre-crisis peak. A fresh default is not the lifeline that Greece needs.

Instead, it will be up to a Syriza-led government to negotiate some sort of debt relief, whether that be in the form of a restructuring, a deal to provide leeway on repayment timings, or all out forgiveness.

It will be up to Mr Varoufakis – if he is selected as finance minister – and newly sworn in Prime Minister Alex Tspiras to ensure that this can be achieved without Greece getting pushed out of the currency bloc in the process.

Yesterday Greek democracy raged against the dying of the light. Europe and the World should join us

Today, the people of Greece gave a vote of confidence to hope. They used the ballot box, in this splendid celebration of democracy, to put an end to a self-reinforcing crisis that produces indignity in Greece and feeds Europe’s darkest forces.

The people of Greece today sent a message of solidarity to the North, to the South, to the East and to the West of our continent. The simple message is that the time for crisis-denial, retribution and finger-pointing is over. That the time for the reinvigoration of the ideals of freedom, rationality, democratic process and justice has come in the continent that invented them.

Greek democracy today chose to stop going gently into the night.

Greek democracy resolved to rage against the dying of the light.

Fresh from receiving our democratic mandate, we call upon the people of Europe and, indeed, the world over, to join us in a realm of shared, sustainable prosperity.

On the consequences of Mr Draghi’s impending QE announcement – in THE ECONOMIST

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«La Grèce peut forcer l’Europe à changer» – La Tribune

INTERVIEWYannis Varoufakis Syriza's candidate for the elections of January 25 in Greece.
Yanis Varoufakis is a candidate for Syriza to the 25 January elections in Greece. (Credit: Reuters)
Interview by Romaric Godin, Athens  | 01/20/2015, 1:16 p.m. – 2597 words
Yanis Varoufakis, economist and author of “Minotaur Planetary” is a candidate for the party of the radical left Syriza in the elections of January 25. He explains his commitment and would have meaning for Europe led a victory of party
by Alexis Tsipras.

 

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On the ECB’s latest contradiction (and how it helps Greece) 

Screen Shot 2015-01-15 at 2.08.26 AMThere is little doubt that the OMT program has been Mr Mario Draghi’s (the European Central Bank’s dexterous-yet-severely-constrained President) greatest success story. In the summer of 2012 the euro was on the brink. Mr Draghi’s announcement of an intention to buy unlimited quantities of sovereign debt (Italian in particular) to stem the contagion in the bond markets sufficed: the run on the Periphery’s bonds ended even though Mr Draghi did not buy a single bond. Continue reading

The world economy post-2008 – Interviewed by the Institute of Regulation & Risk

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Since the demise of Lehman Brothers in September 2008 and ensuing great financial crisis (GFC), it would seem rather obscenely that central bankers and monetary policy has been obsessed with “deflation”, rather than remedying the actual causes of the crisis itself. Is this a fair analysis? 
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Greece is about to give European democracy a chance

democracySomething is amiss in our Europe.

When the constitutional process of a proud European democracy seemed to be leading, quite properly, to elections (as was the case in Greece since the Fall), the European Commission, various governments and the commentariat-at-large intervened, presenting the prospect of elections (the crowning moment of the democratic process) as a disaster-in-the-making; as a calamity to be avoided at all cost. Continue reading

La Grecia tradita dall’Europa: farà default – interview with F. Simonelli, for MediTelegraph

Screen Shot 2014-12-12 at 11.57.26 AMAtene – Yanis Varoufakis, stimato economista dell’Università di Atene, ha sempre avuto opinioni fuori dal coro. Sin dall’inizio della crisi greca, nel 2010-2011, ha messo in guardia sul fatto che non si trattasse di un problema locale, ma di una crisi sistemica dell’eurozona

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Ambrose Evans-Pritchard on Greece and the rise of SYRIZA – from THE TELEGRAPH

Screen Shot 2014-12-10 at 10.55.14 PMIn this powerful, balanced article, published today in conservative UK daily THE TELEGRAPH, Ambrose Evans-Pritchard makes important points on Greece and a prospective SYRIZA administration:

Events have rudely exposed the illusion that the Greek people will submit quietly to a decade of colonial treatment and debt servitude… Greece was sacrificed to buy time for the alliance, like the Spartans at Thermopylae. It was subjected to an unworkable economic experiment, in defiance of known economic science and principles. Europe’s leaders have betrayed their a special duty of care to Greece. They may at last have met their match in the ice-cool Mr Tsipras.

To read the whole article, click here.