NEW: A Modest Proposal for Resolving the Euro Crisis, Version 4.0 – by Yanis Varoufakis, Stuart Holland and James K. Galbraith

For a year now, Europe has been lying to itself, pretending that the Euro Crisis has been, more or less, resolved. It is now clear that the Euro Crisis is alive and well and threatening Europe with disintegration, permanent damage, widespread poverty, a loss of democratic legitimacy and a swing toward misanthropy. Our Modest Proposal for Resolving the Euro Crisis has never been more pertinent. Version 4.0 is now out, co-signed not only by its original authors, Yanis Varoufakis and Stuart Holland, but also by James K. Galbraith who has contributed signficantly to its evolution.

 

16 thoughts on “NEW: A Modest Proposal for Resolving the Euro Crisis, Version 4.0 – by Yanis Varoufakis, Stuart Holland and James K. Galbraith

  1. Pingback: “Greece will neither want to leave the euro nor threaten to do so” Interview with J. LUIS MARTIN in OpenDemocracy | gold is money

  2. Pingback: Una modesta proposición para resolver la crisis de la eurozona, Versión 4.0 | Caótica Economía

  3. Yanis – the most pressing thing with this text is to get it *well* translated into German and persuading papers like die Zeit and possibly Handelsblatt to write about it.

    Also getting the German Greens, who may well be powerbrokers after the next election, to at least look at it.

    Then there is a slim possiblity of having some effect on the German elections.

  4. A very thoughtful proposal.

    Will the ECB or Germany listen? Or do they still believe in their failed policies….only 2-3 yrs more yrs. of austerity and magically this crisis will be over.

    I still believe that it will take a national revolt in each country by Greeks/Spaniards/Portuguese/Crete citizens to stop this madness. The main economic powers to be like Draghi and Merkel are tone deaf to anything but austerity. Haven’t we reach 5 yrs of failure or still no recognition that the previous policies are not working?

    • Most of all you have 5 years of demonstrating that the Greek system is incapable of restructuring the grotesquely oversized and inefficient public sector to a sustainable and efficient version.

      And, BTW, that the Greek state is apparently unwilling to collect the due taxes (not so from the average people, but from rich ones and firms).

    • VSS so if Greece is incapable of all the above that you describe, can you please explain what went wrong with Ireland? We all remember how you were cheering about Ireland’s supposed return to growth…so, what now ?

  5. George Elias Krimpas, Professor of Political Economy [Emeritus], University of Athens on said:

    Version 4.0 was very much worth waiting for. As rather a lot of confused thinking has accompanied the 5-year old crisis, this version is necessarily less laconic than the original, whose crispness was admirable; nevertheless, its didactic potency will prove cumulatively more persuasive as the proposal is taken up by a renewed audience. I particularly commend the treatment of the embrace of weak banks and weak states, a problem which I had personally underestimated [for the emblematic Greek case, there has just recently appeared an excellent study commissioned by the Centre of Progressive Policy Research, authored by Christophoros Sardelis, former head of the Greek Public Debt Management Authority]. The treatment, new to this version of the Proposal, of the Target2 mechanism, is excellent and the suggested potential use of crisis generated imbalances to rebalance the social cleavages which are the crisis’ ugly legacy is original and politically sharp. And I could go on but would now rather re-read the Proposal and enjoy it all the more.
    Strangely, I was thinking of the 3 of you – Yani, Stuart, James – on Bastille Day, just two days ago, Version 4.0 must have been floating in the atmosphere around me, all the best.

    • The chapter “Reason for TARGET 2 funding” is for whatever reason repeated in the section “Four crises, four policies”.

      Anyway, I don’t agree at all with it. Essentially it says that since 1st the surplus countries partially financed via Target 2 the consumption and thus artifically elevated standards of living of the deficit countries, then it should also use the interests on the surplus to finance them further. I’d rather the deficit countries start in earnest to restrucutre, otherwise the crazy money transfers will never end.

      BTW, how high exactly are the interest rates within the Target 2 system as claimed to exist according to the MP4?

    • @Very Serious Sam (above)
      You wrote <>

      I have 2 questions.

      Q1: Oversized public sector-> Could you please provide the link to the supportive statistics ?

      Q2: Inefficient Public Sector-> Could you please provide an example of a public servant that really “Decides” ?

      Except of course if you mean their ‘inefficient’ ministers, their , external to the service, bodies, Control mechanisms or in few cases of Legal Public Bodies (ΝΠΔΔ) their presidents.

      Because in my naive opinion I think there lies the problem with the so called inefficient greek public sector. Which is apparent if you ask ANY public sector to provide you with their organization charts which all are of only 1 phase.

      George Kakarelidis

  6. Hi Yanis,

    do you know the Paris declaration for the solution of the Euro-crisis of the european green party?
    http://t.co/drDdyiEDV1
    Have you ever commented it?
    Do you especially think, their short-term strategy will suffice to arrest the free fall?

  7. Is this EZ/ EU project really worth saving after all the terrible experience that Greeks (and millions of other Europeans in the EU Periphery) have had with it??? The Brussels crowd is only matched in arrogance, stubborn stupidity and abysmal ignorance of basic economic concepts like debt deflation by the Greek political elite. They collluding to make the little people pay for their major policy failures, socializing massive bank lossed – as you have many times pointed out yourself.

    Would it a better approach be sovereign nations with their own national currencies and the EU as a trading zone with friendly cooperation on the lines of the European Community rather than the current Soviet-style repressive super-state with the Germans playing Goliath with the EU periphery…..

    Why not a Swiss approach as Nassim Taleb has pointed out with decentralization, reduced powers in Brussels and a vastly downsize bureaucracy and significantly small budget/ reduced national contributions.

  8. Pingback: Euro Crisis Alive, Well and Still a Threat | FrenchNewsOnline

    • Is this EZ/ EU project really worth saving after all the terrible experience that Greeks have had with it??? The Brussels crowd is only matched in arrgoance by the Greek political elite. They making the little people pay for their major policy failures.

      Would it a better approach be sovereign nations with their own national currencies and the EU as a trading zone with friendly cooperation on the lines of the European Community rather than the current Soviet-style repressive super-state with the Germans playing Goliath with the EU periphery…..

    • The US has always outperformed the EU in economic success with much better growth rates, consistently lower unemployment and far better crisis management. Indeed the EU has become a black hole, which the World Bank considers the number one risk to the global economy.

      The sad truth is that the EU is getting poorer by the day, its share of world GDP is shrinking and frankly, it is not at all an attractive place to be.

      Sound European countries have avoided EU membership and by all means have stayed clear of the now infamous Euro project. Those countries who crave for this are generally poor, ex-communist Eastern European countries out of desperation but also because they more accustomed to low living standards and repressive systems.

      Definitely not attractive for self respecting European countries like the UK, Norway, Swedes/ Danes wisely demurred from the perils of Eurozone, Switzerland, etc.

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