Clusterfakis

Yanis Varoufakis, Greece’s radical ex-finance minister, was the subject of an excellent New Yorker profile by Ian Parker.

Particularly fascinating are the details on ways economists, lawyers and politicians varied in their approach to the Greek crisis.

For example, after Yanis told the other Eurozone finance ministers (including Germany’s Wolfgang Schauble) that Greek obligations were to inflexible and that his Syriza party had been elected to break with austerity…

Varoufakis recalled that Schäuble seemed “very cross,” and said, “When there’s a program that everybody has tumblr_nj96laH7YX1un5qroo1_500agreed to, that’s it. Elections cannot change anything, because, then, every time there’s an election everything will change.” (A spokesperson for the German finance ministry said, “Meetings of Eurogroup finance ministers are confidential.”) As Varoufakis put it to me, the idea that elections could change nothing was the “greatest gift one could give to the Chinese Communist Party.” That’s overheated, of course, and democratic governments tend to respect the binding agreements signed by their predecessors. But it was interesting, at Brookings, to hear Schäuble say that “France would be happy if someone could force” its parliament to pass unpopular labor-market reforms. It wasn’t quite clear what Schäuble meant by “France,” if it was neither its people nor its parliament…

Varoufakis said, he’d found no market in Europe for such thoughts. At the level of the Eurogroup, Varoufakis told me, the conversation was “all about the rules.” It was not a forum in which to discuss debt unsustainability, or the rarity of economic growth under austerity conditions. Varoufakis told me that he was “accused of talking about economics.” Once, Varoufakis was asked what Greece’s target surplus should be, if not 4.5 per cent of G.D.P. He “had to give a lecture” about the variables that made the question unanswerable in that form. “They’re not economists,” Varoufakis said. “Most of them are lawyers.”…

According to a Eurogroup official, Varoufakis “didn’t seem to understand that the other people in the room were constrained by their national parliaments. They are bound by certain treaties. Those constraints fly in the face of pure economics. The eurozone is complicated, and he had no understanding or sympathy for that.”…

In the opinion of one troika official, Varoufakis’s disregard for the granular—like the ease with which he requested other European taxpayers to settle Greece’s account—had an undemocratic air. “One may dismiss this as technocrats looking at numbers,” the official said. “But, if something doesn’t add up and there is a gap, the gap has to be financed by somebody.” He went on, “Adding up is the essence of democracy.”

To recap, according to Eurozone officials:

  1. Elections shouldn’t have international consequences.
  2. On the international plane, states are unitary actors across time and space – even if what we mean at cocktail receptions when we name a country is shorthand for its banking class.
  3. Domestically, democracy is about numbers. Making budgets balance. Any cross-subsidization internationally disrupts the democratic pact.
  4. However, the people’s representatives in this numerate democracy need not themselves be numerate. Instead, they are lawyers that can put legal rules and procedures above basic economics.

Is it just me, or does this seem like a regime so complex that we simultaneously get the worst of democracy, economics, and the law?

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5 responses to “Clusterfakis

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