Home > Greece > “Some kind of scrip currency”

“Some kind of scrip currency”

from Interview with Michael Hudson

HUDSON: Well, this is not just a rumor. Varoufakis has written in the last few days that there is no way that Greece is going to stop paying pensions, and there is no way that Greece is going to privatize the economy. In other words, he said, we’re willing to make all sorts of compromises. The usual, it’s called extend and pretend, you lend us the money and we’ll pay you. You pretend to lend us the money, that it’s a good debt, we’ll pretend to pay. But there’s no way that they’re going to commit suicide. And the Central Bank’s saying yes, you have to commit suicide or else have the anarchy of withdrawing from the Euro. What are you going to do?And so they’re trying to figure out, well, wait a minute. We’re not going to be able to pay, so what is the point of trying to pay a debt that can’t be paid? If there’s no money there we can’t pay, so there’s no way that we can meet their conditions. There’s obviously going to be a [break]. So Greece is going to use its money to continue to pay pensions. It’s not going to privatize more of the public domain, it’s not going to sell off its mineral holdings and its gas rights in the Aegean. There’s a complete blockage.And apparently President Obama, which originally had told Europe, wait a minute, you’ve got to stop Greece from withdrawing because otherwise it’ll have to make a deal with [inaud.] for gas or with Russia. It’s going to be absolute anarchy. And that’s the intended result by Europe. I know the Greek negotiators. I’ve spoken to them. I could not do anywhere near as good a job as they’re doing. I’m in full agreement with everything they’re doing. They’re being reasonable. But they’re up against a wall of, the intention is to have economic warfare and to force Greece to continue the privatization program and to continue the war against labor.And there’s no way of knowing what’s going to come out. Some kind of script currency, some kind of artificial currency maybe used as an interim.

  1. May 28, 2015 at 8:36 pm

    Good summary of the options ! The correct word is scrip ( not script ). See our Sustainable Money Working Group for details on complementary currencies.

  2. June 1, 2015 at 10:09 am

    From my interview of Varoufakis in late 2013, before he became PM:
    From the interview in Fall of 2013 (https://www.youtube.com/watch?v=JOm2aQUY51Q):

    Minute 6:20 Scott: This is why I advocate along with Henry George and other monetary reformers that we break up the monopoly of money creation itself and that that way the politicians are not going to be bribed by money because they have their own supply. Because it seems that politicians are very cheap in the world of finance that these bankers operate in (and) to buy off for congress is a modest investment from their point of view…

    Yanis: I agree, Scott…

    …and that they’ll continue to do it and the there’s no reason not to, as Andy says why they wouldn’t. But the only way to break that – I believe – is to break the monopoly on money as well as the monopoly on land and the land in the expansive sense as meeting all resources.

    Yanis: I agree

    Scott: So if we don’t take this monopoly power away from the financiers in around two years then what hope is there for the actual productive class to have any sort of parity in the society?

    Yanis: Spot on. I agree. I agree entirely. But there’s one danger in this narrative, not that I disagree with you, but we have to be very careful how we hone it because today there is, as you well know, there is a tea party/libertarian argument against the monopoly of money, against the Federal Reserve, against fiat currencies and in favor of a Hegekian(?) blueprint of privatizing money and effectively allowing private…banks to issue their own currencies.

    Now this libertarian pipe-dream, which of course is never going to come to fruition, is a political bulwark against the agenda that you just outlined. So it’s…we must be very clear about this. It is not…the problem is not that we have state fiat money. The problem is that we have a Fed…a Federal Reserve System, in the United States, a European Central Bank in Europe, which is in the pockets of the private financiers.

    And the task is not to undo the state’s control of money. The point is to strengthen it but to make the state operate…operate…utilize its control of money on behalf of manufacturers, on behalf of creative people, on behalf of all those whose lives are wrecked as we speak by the rent-seeking behavior of the financiers that control through the revolving-door strategy the regulators.

    Minute 9:05

    Even before this, Varoufakis had envisioned his own complimentary currency for Greece similar to the Tax Anticipation Notes (TAN) suggested by others elsewhere, including here: https://rwer.wordpress.com/2015/04/28/a-detailed-proposal-for-a-complementary-currency-for-greece/

    I’m not sure why he hasn’t put this option front and center on the bargaining table, and begun working towards it away from the table. At the very least, it would strengthen his position. And it might just save Greece without the need for a total Grexit.

  3. June 2, 2015 at 1:38 pm

    Any proposal for an alternative currency in Greece would be ridiculed domestically until it happened. People will say “so we’re gonna pay with now, is that so?”. Greece has memories of inflationary money around WWII and sees the Euro as modern and sound, even as this is the root of Greece’s problems. Any alternative currency scheme has to be a quiet Plan B until it’s actually implemented and people have to go with it.

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