The Greek talks with the Eurozone just broke down again. There currently is no way forward. Greek bank runs may start as early as tomorrow. If they do, the Eurozone will disintegrate fast. Most people did not see this coming and thought Greece would cave. But I did. I felt Greece would not cave, at least strongly suspected it. Here’s why.
I don’t have much investment in Yanis Varoufakis other than fascination and an inkling he can hold his own. He’s showing the Eurozone leaders that he’s not a yes man, not a politician, but a guy with principles that won’t break.
Most commentators on my side of the spectrum, the libertarians, armageddonists, preppers and those folk simply assumed that Greece will cave to Troika demands sooner or later, but that’s because they haven’t been following Varoufakis for three years like I have. Or maybe it’s just a 6th sense I have or something that I recognized with Ron Paul and Feiglin, and to a certain extent with Varoufakis. This harks back to my Ron Paul article about soul.
Varoufakis is wrong about a lot of stuff, even about basic stuff, but he has a soul. And he will not break from what he sees as right. Tsipras and the rest of Syriza are all a bunch of politician monkeys and they’ll cave. But Yanis Varoufakis won’t. Interestingly, Varoufakis is not even a Syriza party member.
Bob Wenzel recently quoted Tyler Cowen, a mainstream economist, as saying this:
The Greek government will cave so cravenly on the substance that they want to have it on the record books that they supplied some expressive goods for a few weeks’ time, namely insulting the Germans and claiming that the Troika is dead and buried.
See, that would be true of any Greek politician except Varoufakis. He won’t cave on anything, unless absolutely ordered to do so, in which case he will resign, as he has said explicitly that he keeps his resignation letter in his inside pocket and will submit it the moment he feels he can no longer speak truth to power. Or his version of it anyway.
Even the bloggers on my side of the aisle like Wenzel simply don’t understand this. I covered this in my column two weeks ago at CalvinAyre, where I said the following:
In a nutshell, it’s like this. If just another politician occupied the Greek FinMin seat, eventually he’d be bought off by the Troika, that trifecta of acronyms like ESM and EFSF that hold all the bailout funds, and the proverbial can would be kicked down the road again. But Varoufakis is not just another politician, and that’s what political mainstreamers, as well as Eurozone leaders themselves, just don’t understand. He’s serious. He wants to default, he’s been saying it for years, and he is the only one with the guts and independence to mean what he says and do it.
Varoufakis still may cave. I don’t have as much faith in his strength of character than I do of Ron Paul or Moshe Feiglin, but so far he has been holding up. How much longer I don’t know. But we can safely assume that since he has not yet resigned, he has not caved.
Now, at the prospect of Greece being kicked out of the Euro, Varoufakis could get fired. Once he’s out, if that happens, you can be sure Greece will cave. Tsipras is a nobody, that I’m sure of. Zerohedge is reporting now that the Germans want Varoufakis out. Why? Because he literally is the only obstacle in the way of continuing this disgusting bailout. There is no one else in the way. Just him. Quoting Keeptalkinggreece:
An SPD politician from Merkels’ social-democrat coalition suggested s that Prime Minister Alexis Tsipras should replaces Finance Minister Yanis Varoufakis as he apparently creates lots of confusion, German politicians cannot understand.
SPD executive board member, Joachim Poß, wrote in an e-mail for his party colleagues:
“Greek Finance Minister Varoufakis has best demonstrated with his performance until now, that he is not up to the demands of such an office. In the interest of the Greek people and in view of the difficult situation, Prime Minister Tsipras should consider to replace Mr Varoufakis with a political experienced, realistic-efficient person.”
Let me take that last bold paragraph out of Orwellian Newspeak and translate it into Human:
“Greek Finance Minister Varoufakis has best demonstrated with his performance until now that he is not up to simply caving to our demands for fear of being kicked out of the Euro. In the interest of the German government oligarchy and in view of the difficult situation, Prime Minister Tripras should consider to replace Mr. Varoufakis with a politician.”
Watch Greek capital flight tomorrow. It could get intense.