A conversation between Yanis Varoufakis and Joseph Stiglitz

Yanis Varoufakis is the current Greek finance minister who came to power when the Syrzia party was elected in January. Joseph Stiglitz is an American economist and his known for his critical view on the current management of globalization. Greenlaw sent me a highly relevant and interesting video of a Q&A conversation between the two men. If you all have an hour on your hand, I suggest you watch it. Many of the ideas Varoufakis and Stiglitz discuss can be seen in our discussions and our recent essays.

Both begin the conversation by pointing out that they “see people erecting fences now”, acknowledging that the countries are diverging from one another and fighting to maintain their differences. Countries are becoming more nationalistic and less supportive of the “European identity”. Varoufakis argues that there was a fundamental problem with the structure of the EU since the beginning; the institutions set in place promoted separation instead of cooperation. He points out that, “no doubt that if there was a federal republic (United States of Europe) then there wouldn’t be a problem” with the health of the European economies. In the beginning the creators of the Eurozone didn’t have the ability to create a United Europe that would have the power to implement fiscal policy, but they did have the power to create a monetary union. They acknowledged that this was not an optimum currency area, but that when the inevitable crisis happens, Europeans would come together and consolidate the union. Contrary to this, the financial collapse highlighted differences and put people on opposing sides; they are more divided now than they were before.

Varoufakis also calls for Greek reform. His new government wishes to start from scratch when it comes to discussions regarding stabilization of the Greek economy as the time frame that had been agreed upon by the previous government is not feasible. His party is seeking to reform the social economy too. They plan on pushing bills to prevent corruption, tax evasion and rent seeking (“when a company, organization, or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation”).

Once again, I recommend this video as it pertains to the things we have most recently been discussing in class.

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