Taking stock of the Euro Crisis on the Keiser Report (video)

I always enjoy being interviewed by Max Keiser, despite our differences on a number of issues (the merits of the Gold Standard, Bitcoin – gold’s e’reincarnation), I beg to differ from him on his hypothesis that Greece fell to a well thought out conspiracy. There was no such thing. Just a badly designed common currency whose inevitable fragmentation gave an opportunity to a multitude of spivs, corrupt politicians and bankrupt bankers to help themselves to public assets and push whole populations into permanent poverty (so as to preserve their own privileges). In this interview Max waged an accusation at ex Greek PM, George Papandreou, insinuating that the latter bet on CDSs that were later triggered as a result of Greece’s bankruptcy (also known as PSI) (go to 4.’49” of the video). This allegation I know to be false, malicious and defamatory (hear my reply on 6’38”). As perhaps the most ardent critic of Papandreou I think I have the moral authority to dismiss this rumour as unfounded. And to suggest that those of us who want to chastise George Papandreou for his inept handling of the modern Greek calamity, his almost criminally negligent approach to the Greek crisis, are seriously undermined by such false accusations.

19 thoughts on “Taking stock of the Euro Crisis on the Keiser Report (video)

  1. For sure It is not conspiracy. It is a crystal clear agenda to “chinanize” wages in the west to compete with the low cost economies, destroy anything left from the social state, the nation state, destroy the middle classes to increase inequality in favor of the rich. This is the model the western states try to impose to save capitalism avoiding real reforms. The governments do not represent the interests of the majority of their people. It is a crisis of the representative democracy. The economic agenda is not explained similarly the foreign policy is not explained as usually. Clear explanation and honest discussion would definitely necessitate significant reforms. Then the conspiracy theories thrive.

    It is not a conspiracy, I agree. It is an agenda created with no discussion to safeguard the interests of the few!!!

  2. Yanis,

    Re the three components of the Euro crisis with which you start, can I suggest you’ve left out a fourth and very fundamental component: the divergence in competitiveness between the Euro core and periphery?

    If the currently uncompetitive countries cut their wages, prices and costs by 20% or so, that would solve the whole problem.

    For example as regards borrowing, anyone is happy to lend at a reasonable rate of interest to an entity (e.g. Greece) which is competitive. And that in turn would allow stimulus in the periphery.

    There are some figures (see below) which seem to indicate a total failure of competitiveness to converge, so my pessimistic conclusion is that the Euro might as well be scrapped.


  3. I cant seem to get anbody who I follow like Max Keiser or Webster Tarpley for economic news to comment on my country Slovenia.

    Can I somehow get your take on Slovenia.
    Could your comment here or on email.

  4. I would like to fully agree with you that there was no conspiracy, but just criminal idiocy in handling not only the Greek crisis but the whole Eurozone crisis. An idiocy that is continuing, owing to over inflated egos perhaps that refuse to admit they were wrong, and below average personnel handling these matters, Olli Rehn being a case in point (but not the only one).
    But as for conspiracy theories, they are a lot like religion. Man (and Woman of course) needs to make sense of the incomprehensible, he needs to find logic in chaos and disorder, he needs the why and wherefore, hence he invented religion that could explain all the chaos and nonsense, and then conspiracy theories started playing this very important role. How else to make any sense whatsoever of the crass stupidity, the unwarranted suffering, the increased deaths by suicide and the deterioration of health services, that have to be slashed to cut costs. Soon enough we will start rounding up people, old pensioners first, for euthanisia in order to cut the costs of healthcare and pensions and everything else.
    That kind of arrant nonsese economics needs something to rationalise it. And the only thing that can give a semblance of rationality to all this idiocy is conspiracy theories.

    • A great post, Parina Douzina Stiakaki. One addition, in short (I hope^^) as it’s slightly off topic here. It is a little bit more difficult with “conspiracy theories”, I think.
      In Germany we have a lot of rather indifferent people, sadly enough also and in vast numbers at universities, who love the term “conspiracy theory”. They use it to disregard leftists.
      To shorten this here really as much as I can, one could even say we had, since we learnt about this Crisis, a lot of intellectual snobs who would not have shied away – would they have been so fair as to take note of Yanis’ work, a lot of those people did not – to call Yanis Varoufakis himself a “conspiracy theorist”.
      Their point always was “would the greek people work harder, there would be no problems” – and other unbelievable nonsense. All who would not follow “dem Sparkurs”, how it was called in Germany (makes my blood boil, really, if I listen to that crap again) – were in danger of being called “conspiracy theorists”.
      It all was a kind of support for Merkel’s and Schäuble’s austerity ways. That is the bad thing with such words – you can use and misuse them however you like, as long as you have enough journalists who follow you and repeat the – blurb.
      Merkel and all had no own conspiracy theories – those people do believe in their old and sometimes horrible ideas. These people are not stupid. They don’t believe their own lies about, for example, Greece.
      They just use the idea of “conspiracy theories” without even saying so to blame all who do not follow them. Hence their word “there is no alternative”, taken from Maggie Thatcher.

      Thanks for this interview, Yanis – listening to it was again learning a bit more again. Meanwhile the few leftist german papers (surely not “taz”, that paper has changed since over 10 years) ask themselves what Syriza plans and what they would do, and what they *could* do…

  5. I guess you have a point but I’m not convinced appearing on a program with such conspiracy minded nonsense is worth the trouble or dignifying!

  6. Thanks Yanni,

    I think that you explain, quite frankly, that the current prolonging gloomy situation is merely due to German policies. But what I am unable to understand and explain logically is why all other European countries continue to behave as sub servants, a kind of hypnotised cult of such policies? If policies like these are working only in favour of Germany then why France, Italy, Spain or other major countries in the continental Europe accept to follow suit? What are they getting as a reward?

    On the other hand, German voters seem to trust Merkel as their chancellor and apparently she will win election next September as polls show. Why do you think German voters behave like that? Is there any other reason except their historical tendency to vote in favour of their Ideal State interest? Are you aware of any other voices within Germany that urgently call for a major shift in policy making in Europe towards more collaborative approaches?

    Hope I didn’t make you feel tired with the question marks used quite excessively…


    • Theo

      In Italy, things are very simple. Politicians are idiots. Silvio Berlusconi has said that every time the others ask for other policy, Germany plays her card of stronger economy and of leaving. So we wait. Then Berlusconi one days says to leave the euro, but never leaves. Politicians are afraid of the blame for the return to the lira and the goverment keeps saying that we will be safe.

      Before, they tell us, “do austerity or become like Greece”. Now we become like Greece,but we continue austerity. It is craziness. Our debt has raised from 120% to 130% and they call this saving us. How do you pay debt 130%? Letta wants to sell state property, buildings, to find 500 bln euros. Who will buy 500 bln euros? It was old plan too and failed then, it will fail now too.

      Now France is declassed, our politicians wait for France to do something and stop Germany, our people wait for french people to do something.

      The euro is a trap. Many now see it but are weak to find how to save us.

      Professor Varoufakis,

      What does Italy in the ESM mean for the country?

    • An ESM program will cause investors to become much more cautious, knowing that an ESM program comes with conditions that accelerate the recession. It also means that the banking system will grind to a halt. In short, Greece all over again.

    • I can just comment about one thing instead of Yanis. German voters are quite bizarre today. Sadly enough not only in Germany, but in many countries…
      The whole german election is funny – all know the results since about a year. Question is only – which party will Merkel choose as a partner?

      See – Merkel was for atomic energy and nps – 73% of people found her great. Merkel changed her mind as the wind was against her (Fukushima) and was all against nps – 73% of people found her good. 70% of german people, when asked, say Germany is every year more un-social, the poorest 35% get less money, the rich people are always getting richer. Yet 73% support Merkel, who stands (with Schröder and red-green 1998-2005 before her) exactly for this neoliberal ways. She sat in the ice of Greenland to pose as Al Gore had shot his film in 2007 about global climate changes. Today our self-called “climate chancellor” supports the stinking big german cars. Yet – nobody cares…our media from “taz” to BILD all support her somehow… And people? I ask a lot of people, they just don’t care…

      There are so many possible reasons for this all – I just can say a lot of it is not even taken into account. It is bizarre for me, sometimes, to speak with politically interested people, who studied at postmodern universities of the last 20 years, and still have not the slightest clue of one obvious fact of our societies today.
      But it is one of the important points, and maybe an answer to some of your questions, Theo. One of the big problems is “indifference”. Why do all people still live, in their heads, to take an example, in a world that is not more since at least 1988 or before? Why do a lot of people still think students, to take just one group, were interested in social justice?? Why does nobody wonder that nearly nobody at universities stands up against Merkel/Schäuble/EU as they go on and on with their austerity course?
      If one does not look twice, one can’t see the obvious – there is indifference… I ask students, and half of them think “what’s that for a talk, by the way, do you think you’re stylish, eh?” And they go on talking about fashion, some nice drugs and fun…”Greece? Oh well, I’ll have to answer that smartphone now…”

      People, and I meet thousands of students and all others in a big german town, have simply – no clue… Yet in the heads of many exists a picture of “students are for social justice”…

      It might have not much to do with “voting in favour of their Ideal State interest” at all, Theo. That is far too high for many… A vast majority follows each and every media hype. We all live in this world, yet the most obvious things – the desastrous outcomes of stupid media waves that all last about 3 or 4 weeks, afterwards people are not longer interested and something new must follow – are not seen. Media are no excuse for this painful indifference. Yet our age sees many indifferent people, and especially many indifferent intellectuals. I often think if the richer 60% of Germany (and of many other countries, make no mistake, it isn’t only Germany) will not somehow lose, they will not change that soon. We, the rest, can only talk and talk and talk and persuade and hope.

    • Thanks ”klemberer”…I have the same impression sometimes but i deny to persuade myself that I don’t have any obligation of an argument first before finally accepting how indifferent our world has become…And how can you argue with a stubborn indifferent person? The more you are trying to get his/her attention the more you are getting away from your argument as most of them believe that indifference is the modern equivalent of happiness and therefore they thing that you are trying to make them sad and thus unhappy…
      But I think that I will be stubbornly listen this: http://www.youtube.com/watch?v=EmL8XbC6Zmo not to become adjusted comfortably to this plague of indifference…

  7. It was nice to see you take the “conspiracy” wind out of Keiser´s sails. Over the years he has lost more and more credibility (I remember his big EXCLUSIVE that the Germans were already printing new D-marks 3 years ago). In fact, you might consider not appearing on his show as a way to protect your own credibility (although I do see that it does provide a forum for you try to bring some real sense into financial news!). You also seem a bit too quick to impute untoward motives for many of Germany´s actions when you yourself know that many of them are “culturally” determined – i.e. fear of hyper-inflation, etc and that their reaction is not dissimilar to that of the Republicans in America. That the true solutions to the ongoing financial crisis are counter-intuitive is another nail in the coffin!

    • Professor Varoufakis

      Thank you for answering. It proves that our politicians are idiots. I don’t understand why we do nothing. And the funny is that if we leave out Grillo, the rest tell us that we are safe, our banks are very solid and we all sleep well. People accuse Moodys, Standard Poors…Only Grillo said that in 6 months Italy will bankrupt and everyone else laughed with him and told him to stop destabilizing the country.

      Some time ago, i read an article saying that we can’t bankrupt like Greece, because our debt is in the hands of our banks. So if we don’t pay, we don’t pay our banks and this is why we stay in the euro. Maybe it is true.

      Italy is a craziness. There are many politicians that say that Germans and French wanted us in euro, only because they were afraid of Italy with lira killing them in competition. So they brought us in the euro, to lower the value of euro but to avoid Italy being competitive. Minister Visco (Prodi goverment finance minister when we entered euro) said so.

      But, at the same time, most politicians, people and economists fear leaving euro. Very few speak about it, like Professor Alberto Bagnai.


      But we don’t know what we are doing, we go on like blind flies, hitting our head on the wall. We think that if we do like Germany says, we will have growth again. They say that we will grow but when times comes, they say that we must wait a bit more. And debt is increasing… Italy has no policy of our own to put against Germany. Merkel decides for everything.

  8. What you are saying is eminently sensible dear Yanis – it is vital to follow an evidence-based approach and to actively dismiss any inaccurate claims.
    That said, it is also vital to keep an open eye and to be suspicious.
    The Money Power, that ‘den of vipers’ as US President Andew Jackson called it, has been plotting for way too long to take control of the money tranmission mechanism.
    Jackson broke it for ca. 70 years in the US, but still it prevailed eventually.
    And here we are today, totally dependent on banks for the very existence of our entire socio-economic system – no credit creation, no money, no economy.
    Quite rightly a few leading economists like John Kay in the UK have been calling for full reserve banking.
    The covert rule of bankers must be challenged by the people.

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