If the Varoufakis memorandum ‘deal’ is so respectable, why do none of the players, or their Party bigwigs, or the markets, like it?
There’s a piece in the online magazine Counterpunch
at the moment purporting to show how Greek finance minister Yanis Varoufakis has ‘kept Greece in the euro by its fingernails’. Without going over the same tedious ground yet again, nobody can do that, because Greece doesn’t need to cling onto anything: once you’re in the euro, there’s no way out.
The piece continues as follows:
‘So, those who think that Varoufakis should have given the Eurogroup an ultimatum (“Reduce our debts or we’ll leave.”) simply don’t understand the nature of the negotiations. Varoufakis was forced to operate within very strict parameters. Given those limitations, he nabbed a very respectable deal.’
If I had a Pound for every expert who responded to an injection of reality with “no no, you don’t understand” I’d be a very rich man indeed. QE, derivatives, the gold price, the euro’s value, UK ‘growth’, fractional reserve banking, the Manchester United owning Glazer brothers, ludicrously over-priced bourses, the EC’s finances, and BoJ asset purchases have all been ‘sold’ to me over the years are the best way forward…when they are obvious disaster areas waiting to happen.
In this case, it’s the idea that what Varoufakis signed last week was a ‘very respectable deal’. I’d like to put one simple question to the Game Players: if the deal is so good, why does no side – there are more than two – want it?
The Greek KKE doesn’t want it, 8 senior Syriza MPs don’t want it, and yesterday afternoon Merkel was given a seriously rough ride by her own CDU Upper Circle. I’ve yet to meet a single anti-federalist who likes it…but I’ve been told a dozen times that Varoufakis has “bought time”. He has: but is it peace in our time, or time for things to get worse for the Greeks?
Even the fairly large print of the Memorandum makes YV’s job impossible, and it isn’t helped by the obviously manipulated departure of bank deposits. Four months from now they will be back around the same table, and there is just one thing alone that might make Yanis’s hand stronger: Italy turning to sh*t – which it could do….and ought to do.
But if your main adversary is an Italian crook heading up the ECB, I wouldn’t hold your breath on it. In that four months, there’ll be 24/7 smearing and trolls, manufactured bank panics, and pretty much anything they can think of to take Syriza’s eye off the ball. Last month, a record €12.2 billion left Greek banks: that is more than any outflows experienced during any of the previous Greek crises and bailouts
. Zero Hedge is now confirming the Slogpost of last week
when it says ‘the Troika did everything in its power to accelerate the bank run in order to crush any negotiating leverage Varoufakis may have had’.
As for Tsipras himself, his hardest task will be to keep the Coalition together…plus social protests and unrest coming from the KKE and Golden Dawn…both of whom are virulently anti-euro.
I wrote earlier this week that Varoufakis missed his chance to exploit the enormous Bundesbank v ECB v France rift – the thing that will do for the entire EU in time regardless of anything else that might happen. But he failed to call the bluff. That’s all Draghi had: bluff.
Today, with this marvellous deal nobody likes, the euro has fallen further, and now stands at 1.38 to Sterling. If he had walked last Friday, Troika2 would’ve been in l’ordure profonde. There is an old adage that says, “When you borrow £10,000 from a bank, it’s your problem. When you borrow $280billion and can’t pay it back, it’s the bank’s problem”. So far, EU citizens haven’t paid a red cent of any of the funny-money involved in bailing out Greece. Now they will have to…and it could tip at least two of them – Spain and Italy – over the edge. This is the size of the opportunity Varoufakis missed.
On verra. But I remain at a loss to see what Greece has gained here…except the bewildered disrespect of a lot of the neutrals.