Varoufakis: ‘Greece Will Never Get the New Loan’



varouFormer Greek Finance Minister Yanis Varoufakis claimed that Greece will never get the new bailout loan and that Prime Minister Alexis Tsipras offered him another Ministry after he resigned.

Varoufakis spoke to the Official Monetary and Financial Institutions Forum (OMFIF) on July 16 and the content of his speech was released on Monday in audio form. Other than his Plan B for a parallel banking system and currency, he said that the Brussels agreement will never go into effect because the differences between Greece and creditors are insurmountable. He said that the required reforms are not reforms but harsh measures that the Greek society will not be able to shoulder.

Varoufakis also said that Europe wants the International Monetary Fund (IMF) to participate in Greece’s third bailout but the Fund is reluctant to do so because it considers the Greek debt is unsustainable. The IMF will not participate unless there is a write-down, something that the European Commission is reluctant to do.

Varoufakis also said that German Finance Minister Wolfgang Schaeuble wants a Grexit for totally different reasons than him. He claimed that Schaeuble wants to use Greece’s exit from the Eurozone to intimidate France so that there is discipline in Europe.

Regarding Greece’s stay in the euro, Varoufakis claimed that this will never happen unless the country gets in the European Central Bank’s Quantitative Easing program as soon as possible.

Finally, he said that Tsipras offered him another Ministry when he resigned from the Finance Ministry but he refused to take it. He said that he is friends with Tsipras but he doesn’t know if their friendship will continue now that he is out of the cabinet.


37 COMMENTS

  1. Varoufakis, is a liar, and a criminal that belongs in jail. He was willing to break international, U.S., and probably EU law in his hacking, and wiretap scheme. I can only hope the U.S. Justice Department comes after this moron, and his partner in crime in the U.S.. I know they are looking into what Varoufakis just admitted to the media.

    He is an incompetent idiot, that just likes seeing his picture in the paper. Why, I don’t know because he’s uglier than hell.

    The solution is an easy one to this problem. However, the laws must be changed to allow the problem to be solved. If the Greek people are not willing to do that, then they deserve their fate.

    There is no reason, why Greece should be a poor country. However, it will be if these changes in the laws do not take place.

    He claims to be friends with Tsipras ? I wonder what Tsipras’s take on that is ? With friends like Varoufakis, who needs enemies.

  2. After the smoke clears Varoufakis will proudly proclaim in the media this was all part of his Plan C or D or maybe E. No matter the outcome, Tsipras will claim it a victory for his policies and give congratulatory handshakes in front of the television cameras, while the average Greek shrugs shakes their head in despair and gets on with life.

  3. Yes Yes I know. Only good politicians are the ones that are corrupt, and that sell out the country at the drop of a hat, like Papaconstatinou etc.
    You think its incorrect for the Greek government to make preparations for a default?
    Although he does have a big mouth and loves himself, his actions at least show he is a patriot.
    As for the reforms what he said about them being harsh measures and not correct reforms is spot on. After half a dozen years these reforms have made the situation beyond terrible, now like MAGIC they’ll begin to save the country’s economy.
    The reform Greece needs is to make all secret preparations for a default, so as to make the transition as bearable as possible.

  4. Since he was being accused of NOT having a plan B, now that it has been revealed, you choose to complain that he DID have a plan B. I hope you realise how ridiculous you are.

  5. If we had honest and respected politicians, this country would be one of the best in Europe. Unfprtunatelly, we don’t have. All they did was looting this country’s wealth leaving us to pay for their mismanagement of its economy. Shame on you all 300 past and present pigs…

  6. So according to your flawed thought process, having a plan B that is a criminal act, is okay as long as it’s a plan ?

    Do you realize how moronic, and absurd, your comment is ? Obviously, your logic is a manifestation of your backwards, nonexistent U.K. education.

  7. On the contrary, I was poking jest at the notion of Plan B and how much Varoufakis and Tsipras are addicted to the media they will spin every issue to their advantage. The “PLAN” is pure hearsay manufactured nonsense and theater to cover up for their failures. These two politicians are slippery types that are best held under your foot.

  8. You are a fool. Listen to the leaked interview with V. and leading finance experts and bankers. You will see their astonishment at the appalling situation that Greece has been put in by the Troika.

  9. So now the money-making engineer is an expert in criminal law?? You are a loudmouth with no grasp of anything. The government of a country is entitled to do certain things in order to run the country — and access to its own records is definitely one of them.

    I suggest that you keep your ignorant comments to yourself, in order to avoid looking like the fool that you are.

  10. Spot on. Your comment is a correct analysis of the situation, and represents sane international opinion on the issue here.

  11. If Greece imports 67% of the produce it consumes it will never recover unless this is stopped by the introduction of a national currency.
    Are you some sort of communist Viper, you seem to think that a single currency without sovereignty is the only way.

  12. Criminal acts are only criminal acts until they are passed by parliament as law, this is why the politicians have created the debts and are now in a position to say the debt is the debt of the Greek people and not the debt of the politicians who were the only ones who signed the loan agreements with the troika.

  13. Not even close buddy. The devils always in the detail. In a default the Greek government will have enough income in foreign currency to keep essential services running. It will be the private sector that will struggle to survive as the majority of the population now depends on the public sector for its income one way or another.
    Now foreign courts may rule against Greece, but Greece has nothing of any meaningful value for them to confiscate.

    Now lack of imports for the people will reduce Greece to proper 3rd world status overnight. But not because they can’t pay for them. There’s more than one way to skin a cat. Look at how Australia traded with Iraq when Hussein was still around. Now the positive of a default is that they can’t afford to import, and it forces manufacturing to occur.
    Now any future Greek currency will be close to worth less as there will be lack of collateral to back it up. However Greece has 7bln in gold & foreign currency reserves, and that will have to do unfortunately. The gold reserves will have to built up by physically mining it.
    More to the point in a default the country will be reduced to 3rd world conditions for at least half a dozen years, with the first couple being as bad Africa, with the population having to go back to their farms, or fishing to survive & mass emigration (which it can’t afford).
    However some recovery is a certainty as the infrastructure is there, and the private sector has enough foreign income (shipping & tourism) to sustain itself at a poor level, until other economic sectors begin to help the economy again.
    This very poor option is available now. In 15-20 years with Plan A these hard extreme circumstances will look like very preferable indeed.

  14. I don’t disagree but it does not matter one way or another. Greece’s debt is insurmountable without a write down in our out of the Euro. There isn’t much difference between asset seizure and privatization and fire sale of assets.

  15. The only real way for Germany to make Greece just like Germany is for Germany to rolls tanks and rail cars into Greece and round up the 11 million people there and then ship them via rail to gulags in Siberia under contract with Russia and then repopulate the land that is Greece with about 11 million German citizens. The economic problems would instantly vanish and Greece would become Germany By The Sea and live happily ever after!

  16. Since there will be no solution and just endless austerity for Greece ahead, that certainly won’t be the outcome at all.

  17. Right. A piece of advice, here. Anyone who thinks that anything is 100% such-and-such is likely to be a total moron. Just a piece of friendly advice, for your trolling.

  18. Correct. Also, don’t forget that the debts were owed to German, French and Greek banks. The Germans and French (without consulting their citizens) chose to relieve their banks of the debts and assume them for the eurozone. This unaccountable and illegitimate action of Germany and France is what has caused the most trouble not only for Greece, but all of the EU.

    When it comes to criminality, the politicians everywhere are leading the world — along with their buddies in banking.

  19. Far better would be to lure back the rich Greek expats to Greece with all their capital and expertise. Reverse the brain&capital drain.
    Who would want to vacation in a German Greece?

  20. Please explain. The Greek media are in the oligarch hands.
    The language barrier is very isolating and multilingual Greeks just leave.

  21. Compare him to Kim Kardashian, Paris Hilton et al.
    He is rich as every Greek would like to be. Does that not prove his Point?

  22. Greece has public sector enterprises and sovereignty to be confiscated.
    Railways, power grid, real estate on offer.
    Even what you call Democracy/Dignity but what is in fact autonomy.
    Just listen to Hollande’s Integration phantasies.

  23. total BS look to Iceland, where they jailed the bankster’s icelands economy is thriving.

  24. the rich expats that never paid any tax, of course bring them back for more tax free entitlements.

  25. Sorry, but you are the one that is not even close. You claim the positive on a default will stop imports, but manufacturing will occur. Really ? Where is the money going to come to build the manufacturing industry you claim will happen ?

    The Greek Reporter just reported 60,000 Greek businesses applied to move their businesses out of Greece. Care to explain that ? If Greek businesses are leaving Greece now, what do you think happens when Greece actually defaults ? I own a manufacturing business in China right now, and I’m getting ready to pull up stakes, because China is about to have some serious economic problems. People that invest in manufacturing are not going to touch Greece after it defaults.

    In addition, the tax structure in Greece is not business friendly at all. A small business can not make a profit. In Bulgaria the tax rate for businesses is 10%, whereas it’s 45% in Greece with all the different type taxes involved. A manufacturing business can’t make a profit in Greece. That is why a Greek steel manufacturing company that was responsible for 9% of Greece’s GDP, and employed 7,500 Greeks left Greece. So why would someone invest in manufacturing in Greece, when you can’t make a profit ?

    To have the needed manufacturing you claim, you would have to find the skilled labor to work in manufacturing. I could go on, and on, poking holes in your theory. However, the facts as they are today in the business sector of Greece, prove your theory is not even close.

    You also have failed to address the creditors pursuing Greece for the defaulted debt. In addition, no country is going to take Greek IOUs as payment for their import products to Greece.

    You claim five or six years ? LOL, LOL. To build the infrastructure you are claiming that would occur, will take decades to replace the 67% products Greece now imports.

    What you claim………………..will never happen.

  26. Nope. Iceland didn’t have 35 years of EU membership to wear down its economic sectors to almost nothing.

  27. Fellow. When you make an analysis you need to understand what effects what and in what balance.
    If Greece defaults its new currency will be almost worthless like you said. So importing for the public & private sector will be cut to the bear essentials. The private sector would import almost nothing at the start. Total collapse of imports. The government though would still have enough income to get the essentials. The Greek economy would work in a similar way to its pre EU admission. However there will still be some income. The private sectors still brings in 70bln a year from exports and services. (This would increase using a weaker currency, and not using EU rules). Which is not a lot for 11mln people, but at least it means the country won’t collapse.

    Though small there will still be some consumption. It may be 5 or 10 or 20% of pre-crisis levels. As imports would become too expensive local business would fill in this void. Small demand equals also small investment.
    A quick example would be TV’s. I read that Greece currently has the tech to build its own Plasma screen TV internally. Which is now old tech. So the small demand for new TV’s in this case would be built in house, rather than importing. So on and so forth.
    Also your right about the current tax system and regs. However after EU exit all that will be in the past. The fundamental point of having your own country that no one mentions in the media, is that you make the rules to suit yourself. In Greece’s case they would need to change the regs to attract back Greek shipping business as a start, and change the tax regs etc.
    Also mining would begin to start up again away from the EU. Fishing & Farming too would also benefit.
    After a Greek default because 35 years of EU membership has whittled down major economic sectors to almost nothing, there would only stunted or muted recovery for the first few years. This will result in mass poverty! However as the capital for these sectors becomes available the recovery would rise in Greece’s case and long lasting, after the initial lethargic start.
    Now if you and many others think why go and do something so drastic. Think 10, 20, & 30 years from now, and the results would make the sacrifise justifyable.

  28. I understand what you are saying. However, you need to understand how industry, and especially manufacturing works. I say that, because your comments show you do not understand just what is involved.

    You say a Greek company is now manufacturing plasma T.V.s. First that would immediately stop, if Greece defaults, and goes bankrupt, and here is why.

    As an example, if you raise the hood of a Mercedes Benz, you will see many engine parts that say Mercedes Benz on them. However, Mercedes Benz did not make those parts. Outside vendors hired by Mercedes Benz made the parts, and put the name Mercedes Benz on the part they made for Mercedes Benz.

    In television manufacturing, like cars there are thousands of parts. In televisions, you have capacitors, diodes, resistors, circuit boards, etc.. If Greece goes bankrupt, that Greek television manufacturer would then have to build every electrical component in the television it manufactures. That would be impossible, and certainly not cost effective. So now that Greek television manufacturer, has to import the components for the televisions it manufactures. In other words, Greek manufacturers are still stuck with the import problem.

    I’ve owned manufacturing businesses. I have one in China now. We are a vendor for Luxottica. We manufacture products for Luxottica, and put their name on the products we manufacture.

    The other problem with your claim. Manufacturers need raw material to manufacture. Greece does not have any raw materials to use in manufacturing. It must import them. So you see, the old import problem keeps popping up, which is the “import problem”.

    So these claims about how Greece will be forced to manufacture it’s own products, is all well, and nice. However, in the real world, it won’t happen. It will be extremely difficult to manufacture anything in Greece if Greece is bankrupt. Greece will have no money, no international credit, and no one is going to trust Greece for a while. That is a huge mountain to climb.

    Anyone attempting to manufacture anything after Greece went bankrupt, would have to create an infrastructure of thousands of smaller component manufacturers, to manufacture the finished product. Again, that won’t happen.

  29. Ok fair enough. A lot of luxuries such as some manufactured goods will become a thing of the past. There’s not going to be an quick fix to this issue of manufacturing. And please take my comments as a general expression.
    What I want to express is that the after a default and the collapse of imports, the private sector will forcibly run something like 50 to 60 bln euro current account surplus. Even though most external trade will be done in Euro’s (though some will be in the new drachma’s to whatever the collateral is) and internal trade with the new currency. This is the base or the root of all recovery and future success.
    What I want to explain is that all domestic production will forcibly start up. A good example is agriculture and aquaculture. No more imports must now begin to produce. Mining too has somehow been overlooked. Plus the increase to existing services sector.
    The main point I make is that as the capital begins to accumulate in private sector, demand will increase, and the that demand will be met domestically as much as possible.
    That capital I refer to will be put to productive uses, like manufacturing etc. Though it will take probably to longest to rebound, and be primitive for a while. I only refered to Plasma TV’s because I read that Greece has to tech to produce it internally. Though not in current production obviously, which brings you back to the issue of money and demand.
    I believe that this scenario is a base for the future though at a Great cost and sacrifice, and not the hunger games style situation the country is currently in.
    Regards

  30. I agree. Please don’t misunderstand, I believe Greece should exit the euro, just not now, because Greece does not have the horsepower to do so. To become a prosperous nation Greece must adopt the U.S. business format, and practices. Unfortunately for Greeks, the Greeks now in power, do not want to relinquish that power, and they want to still control the Greek people. That is the problem. Greek politicians care about power, and the money they steal. They could care less about the Greek people, which should be obvious to eveyone by now.

    I said years ago when the EU, and euro was created it would NEVER work. The cracks in the EU started in 2010. There is no way you will ever get the English, Germans, and French, on the same page to agree on anything. It’s just not in the cards as they say.

    The whole theory behind the EU which Germany pushed was to undermine U.S. products in Europe. The only country that has prospered by this in the EU is Germany.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.