FinancialGuy Writes!

Who runs Europe?

It might not be who we all think. That person might not be who we want to run Europe.

Below follows a handful of paragraphs shamelessly copied from two recent interviews given by the former Greek Finance Minister, Yanis Varoufakis about his experience in the first half of this year whilst trying to negotiate the finances of his country.

First, from the New Statesman on 13th July 2015.

I asked whether German attitudes control the outlook of the Eurogroup. Varoufakis went further. “Oh completely and utterly. Not attitudes – the finance minister of Germany. It is all like a very well-tuned orchestra and he is the director.

Only the French minister [Michel Sapin] made noises that were different from the German line, and those noises were very subtle. You could sense he had to use very judicious language, to be seen not to oppose. And in the final analysis, when Dr Schäuble responded and effectively determined the official line, the French minister would always fold.

And then…

Varoufakis thinks that Merkel and Schäuble’s control over the Eurogroup is absolute, and that the group itself is beyond the law.

Now from yesterday’s story in The Telegraph:

“”[German finance minister Wolfgang] Schauble believes that the eurozone is not sustainable as it is. He believes there has to be some fiscal transfers, some degree of political union. He believes that for that political union to work without federation, without the legitimacy that a properly elected federal parliament can render, can bestow upon an executive, it will have to be done in a very disciplinary way.

And he said explicitly to me that a Grexit is going to equip him with sufficient terrorising power in order to impose upon the French that which Paris has been resisting: a degree of transfer of budget-making powers from Paris to Brussels.”

Mr Varoufakis told the Telegraph that Mr Schauble had made up his mind that Greece must be ejected from the euro, and is merely biding his time, knowing that the latest bail-out plan is doomed to failure.”

You might want to read this post a second and a third time.

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