Will Greece have more success with its new debt negotiator Euclid Tsakalotos?

Greece's new debt negotiator Euclid Tsakalotos

Not only did I interview Alfredo Cesar in 1980 about his experience as the chief negotiator of Nicaragua with its foreign creditors, but I also offered some assistance to Nicaragua later on when it was confronted with an economic boycott similar to the one the Allende government had faced in 1970-73.

Early 1980s a Nicaraguan team arrived in Amsterdam to discuss this boycott. We met during a full day at the office of the Transnational Institute where I worked in those days and that's more or less where the effort ended. The Nicaraguans did not give the needed follow-up to the meeting. 

   

At the time, I felt the Nicaraguans were inexperienced (that was my impression), had other priorities, or had little expectations about possible results. I also thought, at the time (early 1980s), that they preferred to stick to their confrontational style – similar to Varoufakis?

Or has Varoufakis been less confrontational over the past months than most of the media suggest? And is the Greek attitude now going to change with the new chief negotiator Efklides Tsakalotos or Euclid Tsakalotos as his name is spelled in the English speaking press?

I don’t know, I have not sought inside information about the negotiations between Varoufakis and his team and Dijsselbloem and his team. I could ask key officials in Dijsselbloem’s team though what their experience has been as I happen to know them…

But there is another issue or question. I have a sister (married to a Greek) who lives already many years in Greece and is well-informed (from the perspective of  'the man in the street', the relatively poor people), and she said to me that many Greeks think their country would be better off when it stopped paying its foreign creditors. That is not the position of the Greek government – although inside it and inside Syriza there may be people who think the same. Or would it be possible for Greece, with successful negotiations, to not repay the debt by transforming it into 'consols' as Robert Triffin suggested in a long interview I had with him in 1984 and published later -- see pages 393-95 of my article Jan Joost Teunissen, "The International Monetary Crunch: Crisis or Scandal?" -- or link debt repayment to the capacity to pay when it starts growing again? This linking to Greece's debt repayment capacity is what Varoufakis and a whole lot of academics have suggested -- see eg "300 Intellectuals and Academics in Support of Greece".

I give a quote from this letter by 300 intellectuals which goes further and advocates a write-off of debt: "The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. There is therefore no economic loss involved, for any other nation or its taxpayers, in writing them off."

The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. - See more at: http://greece.greekreporter.com/2015/02/06/300-intellectuals-and-academics-in-support-of-greece/#sthash.scHkm8m5.dpuf

The government of Greece is correct to ask for a write-off of debts owed to European partners. These debts are unsustainable and so will not be paid in any event. - See more at: http://greece.greekreporter.com/2015/02/06/300-intellectuals-and-academics-in-support-of-greece/#sthash.scHkm8m5.dpuf

And what about Euclid Tsakalotos? Is he going to be a shrewd or smart negotiator? Will he seek the cooperation of officials inside the ministries of Finance of the Eurogroup, with a little diplomatic help from me and others -- if needed? Obviously, he should be careful in not giving in too much to Eurogroup and IMF pressure. This is a difficult task.

Stephany Griffith-Jones

By the way, Greece's new chief negotiator Euclid Tsakalotos happens to be a former student of a close friend of mine, Stephany Griffith-Jones, a professor from the UK who is Financial Markets Director at the Initiative for Policy Dialogue at Columbia University in New York. She works with European parliamentarians and Joseph Stiglitz, who is the initiator of this international policy dialogue platform. She recently told me she still has contact with Tsakalotos. And, by the way, Stephany's proposal, backed by others, is to tie Greece's debt repayment (interest plus amortization) to the (real) growth of its economy, and to transform its existing debt into GDP-linked bonds. This would not be a debt write-off in theory but in practice.

As Louis-Philippe Rochon said in "What's the solution to a Greek austerit tragedy?", this would act in a sense "like a haircut," without really being one. "[It] would tie the repayment to the growth of Greece's real economy, thereby making such payments more manageable. (...) To be clear, this is not a haircut, but haircut-like: Greece would eventually honour all its debt, but would do so on much easier terms."

Dijsselbloem and his team have a powerful international network and enjoy the privilige of being in power including the controling or influencing of major mass media (I am also influenced / brainwashed by mainstrean mass media). But people like Varoufakis and Tsakalotos should be able to mobilize their international network as well. Don't you think so?