For whatever reason he's taken it upon himself to strike back in defense of the Very Serious People by referring to those who criticize the VSP as being The Not Very Serious People.
Specifically that's been his term for Syrzia.
"Arresting the central bank’s governor. Emptying its vaults. Appealing to Moscow for help."
"These were the elements of a covert plan to return Greece to the drachma hatched by members of the Left Platform faction of Greece’s governing Syriza party.
"That is from the FT, and there is more:
"The plan demonstrates the apparently ruthless determination of Syriza’s far leftists to pursue their political aims — but also their lack of awareness of the workings of the eurozone financial system.
"For one thing, the vaults at the Nomismatokopeion currently hold only about €10bn of cash — enough to keep the country afloat for only a few weeks but not the estimated six to eight months required to prepare, test and launch a new currency."
"The Syriza government would have quickly found the country’s stash of banknotes unusable. Nor would they be able to print more €10 and €20 banknotes: From the moment the government took over the mint, the European Central Bank would declare Greek euros as counterfeit, “putting anyone who tried to buy something with them at risk of being arrested for forgery,” said a senior central bank official."
“The consequences would be disastrous. Greece would be isolated from the international financial system with its banks unable to function and its euros worthless,” the official added.
"For all the flaws of the euro, the case for it has never been made more effectively."
http://marginalrevolution.com/marginalrevolution/2015/07/what-the-not-very-serious-people-among-the-not-very-serious-people-were-up-to.html
So there was a Plan B. Certainly the idea of getting Russia's help seems remote. I don't know about having to trust Putin. But this plan was just a very small faction.
I like what commentator Thiago Ribeiro said:
"Eight years (the 1994 change worked for Brazilian values of “worked”, and the currency was kept). It means a change every year and a half. If you remember that planning the specifics of a currency change only starts after the existing one fails (until then, it is TINA all the way–much like second marriages, currency changes are the victory of hope over experience), you see that only a fraction of this year and a half was needed for introducing a currency. As I said, a currency was introduced the day after a new president took the oath without cooperation from the previous administration, with little legal debate or legal consultation(no, it is not the one which worked)."
Still, it's good to know a Grexit has at least been considered. And what does Cowen consider a serious plan by the Greeks? They really should be planning some kind of exit as Germany wants them gone. If there is any justified criticism of Syrzia, it's that they didn't have a Drachma plan that they're whole plan was to trust in the EU to get them a better deal.
There was a real Plan B being planned but not this Keystone Cops version about Putin bailing them out that enables Cowen to dismiss them as unserious.
This is the real Plan B:
"Varoufakis: "I have to admit we did not have a mandate for bringing Greece out of the euro. What we had a mandate to do was to negotiate for a kind of arrangement with the Eurogroup and the ECB that would render Greece sustainable within the eurozone. The mandate went a bit further, at least in my estimation. I think the Greek people had authorised us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out."
"We don't have a currency which we can devalue vis a vis the euro, we have the euro"
"[Wolfgang] Schaeuble, the finance minister of Germany, is hell-bent on effecting a Grexit so nothing is over. But let me be very specific and very precise on this. The prime minister before he became PM, before we won the election in January, had given me the green light to come up with a Plan B. And I assembled a very able team, a small team as it had to be because that had to be kept completely under wraps for obvious reasons. And we had been working since the end of December or beginning of January on creating one. But let me give you if you are interested some of the political and the institutional impediments that made it hard for us to complete the work and indeed to activate it. The work was more or less complete: We did have a Plan B but the difficulty was to go from the five people who were planning it to the 1,000 people that would have to implement it. For that I would have to receive another authorisation which never came.”
http://www.ekathimerini.com/199945/article/ekathimerini/news/varoufakis-claims-had-approval-to-plan-parallel-banking-system
Ambrose Pritchard-who has access to Varoufakis confirms that the Elathmimerihi has a real scoop here.
Now there is talk of trying Varoufakis for treason though he insists that he was not going rogue-Tsipras had told him to come up with a Plan B.
"Former Finance Minister Yanis Varoufakis has claimed that he was authorized by Alexis Tsipras last December to look into a parallel payment system that would operate using wiretapped tax registration numbers (AFMs) and could eventually work as a parallel banking system, Kathimerini has learned."
"In a teleconference call with members of international hedge funds that was allegedly coordinated by former British Chancellor of the Exchequer Norman Lamont, Varoufakis claimed to have been given the okay by Tsipras last December – a month before general elections that brought SYRIZA to power – to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, Kathimerini understands."
"Varoufakis worked with a small team to prepare the plan, which would have required a staff of 1,000 to implement but did not get the final go-ahead from Tsipras to proceed, he said."
"The call took place on July 16, more than a week after Varoufakis left his post as finance minister."
Here was Barkley Rosser commenting at Cowen:
"The context of all this is that they want to present me as a rogue finance minister, and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history," he said.
"It totally distorts my purpose for wanting parallel liquidity. I have always been completely against dismantling the euro because we never know what dark forces that might unleash in Europe," he said.
http://www.telegraph.co.uk/finance/economics/11764018/Varoufakis-reveals-cloak-and-dagger-Plan-B-for-Greece-awaits-treason-charges.html
Specifically that's been his term for Syrzia.
"Arresting the central bank’s governor. Emptying its vaults. Appealing to Moscow for help."
"These were the elements of a covert plan to return Greece to the drachma hatched by members of the Left Platform faction of Greece’s governing Syriza party.
"That is from the FT, and there is more:
"The plan demonstrates the apparently ruthless determination of Syriza’s far leftists to pursue their political aims — but also their lack of awareness of the workings of the eurozone financial system.
"For one thing, the vaults at the Nomismatokopeion currently hold only about €10bn of cash — enough to keep the country afloat for only a few weeks but not the estimated six to eight months required to prepare, test and launch a new currency."
"The Syriza government would have quickly found the country’s stash of banknotes unusable. Nor would they be able to print more €10 and €20 banknotes: From the moment the government took over the mint, the European Central Bank would declare Greek euros as counterfeit, “putting anyone who tried to buy something with them at risk of being arrested for forgery,” said a senior central bank official."
“The consequences would be disastrous. Greece would be isolated from the international financial system with its banks unable to function and its euros worthless,” the official added.
"For all the flaws of the euro, the case for it has never been made more effectively."
http://marginalrevolution.com/marginalrevolution/2015/07/what-the-not-very-serious-people-among-the-not-very-serious-people-were-up-to.html
So there was a Plan B. Certainly the idea of getting Russia's help seems remote. I don't know about having to trust Putin. But this plan was just a very small faction.
I like what commentator Thiago Ribeiro said:
"Eight years (the 1994 change worked for Brazilian values of “worked”, and the currency was kept). It means a change every year and a half. If you remember that planning the specifics of a currency change only starts after the existing one fails (until then, it is TINA all the way–much like second marriages, currency changes are the victory of hope over experience), you see that only a fraction of this year and a half was needed for introducing a currency. As I said, a currency was introduced the day after a new president took the oath without cooperation from the previous administration, with little legal debate or legal consultation(no, it is not the one which worked)."
Still, it's good to know a Grexit has at least been considered. And what does Cowen consider a serious plan by the Greeks? They really should be planning some kind of exit as Germany wants them gone. If there is any justified criticism of Syrzia, it's that they didn't have a Drachma plan that they're whole plan was to trust in the EU to get them a better deal.
There was a real Plan B being planned but not this Keystone Cops version about Putin bailing them out that enables Cowen to dismiss them as unserious.
This is the real Plan B:
"Varoufakis: "I have to admit we did not have a mandate for bringing Greece out of the euro. What we had a mandate to do was to negotiate for a kind of arrangement with the Eurogroup and the ECB that would render Greece sustainable within the eurozone. The mandate went a bit further, at least in my estimation. I think the Greek people had authorised us to pursue energetically and vigorously that negotiation to the point of saying that if we can’t have a viable agreement, then we should consider getting out."
"We don't have a currency which we can devalue vis a vis the euro, we have the euro"
"[Wolfgang] Schaeuble, the finance minister of Germany, is hell-bent on effecting a Grexit so nothing is over. But let me be very specific and very precise on this. The prime minister before he became PM, before we won the election in January, had given me the green light to come up with a Plan B. And I assembled a very able team, a small team as it had to be because that had to be kept completely under wraps for obvious reasons. And we had been working since the end of December or beginning of January on creating one. But let me give you if you are interested some of the political and the institutional impediments that made it hard for us to complete the work and indeed to activate it. The work was more or less complete: We did have a Plan B but the difficulty was to go from the five people who were planning it to the 1,000 people that would have to implement it. For that I would have to receive another authorisation which never came.”
http://www.ekathimerini.com/199945/article/ekathimerini/news/varoufakis-claims-had-approval-to-plan-parallel-banking-system
Ambrose Pritchard-who has access to Varoufakis confirms that the Elathmimerihi has a real scoop here.
Now there is talk of trying Varoufakis for treason though he insists that he was not going rogue-Tsipras had told him to come up with a Plan B.
"Former Finance Minister Yanis Varoufakis has claimed that he was authorized by Alexis Tsipras last December to look into a parallel payment system that would operate using wiretapped tax registration numbers (AFMs) and could eventually work as a parallel banking system, Kathimerini has learned."
"In a teleconference call with members of international hedge funds that was allegedly coordinated by former British Chancellor of the Exchequer Norman Lamont, Varoufakis claimed to have been given the okay by Tsipras last December – a month before general elections that brought SYRIZA to power – to plan a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary, Kathimerini understands."
"Varoufakis worked with a small team to prepare the plan, which would have required a staff of 1,000 to implement but did not get the final go-ahead from Tsipras to proceed, he said."
"The call took place on July 16, more than a week after Varoufakis left his post as finance minister."
Here was Barkley Rosser commenting at Cowen:
"This is a completely reasonable plan,and I am sure Tsipras approved checking it out. The California IOU plan worked, and many serious people have suggested that Greece use it. That they were contemplating it shows in fact they were serious, and not the silly “Not Very Serious” that Tyler has tried so hard to label them. This was completely sensible and not worthy of being treated as some sort of scandal, far from it.
"Needless to say, this is not the thing that Tyler originally posted about, which seems to have been some renegade faction with absurd fantasies about what they could do, not to mention all this nonsense about seizing the central bank and all that. Clearly Syriza does have its completely wacko faction, and we should hope that they never get into power."
http://marginalrevolution.com/marginalrevolution/2015/07/what-the-not-very-serious-people-among-the-not-very-serious-people-were-up-to.html
Varoufakis spoke to Pritchard and confirmed the story but argued that its' being twisted:
"Mr Varoufakis told the Telegraph that the quotes were accurate but some reports in the Greek press had been twisted, making it look as if he had been plotting a return to the drachma from the start.""The context of all this is that they want to present me as a rogue finance minister, and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history," he said.
"It totally distorts my purpose for wanting parallel liquidity. I have always been completely against dismantling the euro because we never know what dark forces that might unleash in Europe," he said.
http://www.telegraph.co.uk/finance/economics/11764018/Varoufakis-reveals-cloak-and-dagger-Plan-B-for-Greece-awaits-treason-charges.html
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