Thursday, May 31, 2018

Yanis Varoufakis Speaks!

Well, to be honest, he's a loquacious gentleman and gives lots of interviews. But I always find his analysis interesting and he's certainly not afraid to take a strong position. I thought this interview with Corriere Della Sera, the Italian daily, was particularly good. Lots of excellent points here but let me just highlight his views on Germany and France:
Q: President Mattarella has rejected Professor Savona as minister of finance because he is supposedly anti-German. Does a sort of German arrogance exist? Do the Germans pretend to dictate rules to other UE countries?
A: The problem with the German elites is that they are refusing to be hegemonic and, thus, end up being authoritarian. The German political class continues to behave as if Germany is a small open economy whose net exports are only due to the skill and hard work of their engineers and whose surpluses are well earned. They deny the macroeconomic effects of their policies upon their partners and insist, puzzlingly, on celebrating their surpluses while admonishing others for having… deficits. In the end, German savers are forced by the laws of economics to entrust their savings to foreigners whom they end up despising for being indebted to them. Free riding comes in two varieties: (1) Wanting to live off other people’s money. And, (2) Wanting to benefit from the low exchange rate that other people’s moneylessness causes. It is clear that no Union can survive in this manner. Unfortunately, there seems to be no likelihood of a change in Berlin now that the new social democratic finance minister has proven more austere and less imaginative than even Dr Wolfgang Schauble was.
Q: What do you think about Macron?
A: I have spoken a great deal about the French President, praising his solidarity to me personally in 2015 and explaining that he understands that the present architecture of the eurozone is unsustainable. On the other hand, I also said that, ever since he rose to the Presidency, he has adopted legislation that is socially regressive (e.g. cutting taxes on the rich while diminishing the incomes of weaker citizens), awfully authoritarian (e.g. he made permanent security legislation that clashes with civil liberties) and self-defeating. He also put forward proposals about eurozone reform which, while in the right direction, were too lukewarm. Worse still, he did not back them up with any credible threat to Berlin – which led Mrs Merkel and the German establishment to bury them. The result is that, given France’s inability to flourish in the present architecture of the eurozone, Mr Macron is a spent force. He looks and sounds good but his capacity to make a difference has been wasted and will, from now on, lose his authority little by little.
Corriere Della Sera, the Italian daily, published today an interview that I gave to Aldo Cazzullo. For the published version (in Italian of course), you can visit the paper’s site here. Howev…

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