Ex Greek finance minister Yanis Varoufakis is speaking in Barcelona about democracy in Europe following the events that rocked his country and the euro-zone. He is talking in the Centre Cultural El Born in the old part of the Catalan capital. Here are highlights of his talk: Update: Live blog of his appearance in Barcelona on June 1 2016 Thousands of people were waiting in line outside the conference center. The common currency was constructed like the gold standard The Europeans are sighting with each other. In the US, each crisis brought the Americans closer together and in the euro-zone the opposite is happening. The euro-zone was wrongly constructed. The state’s role was to keep the different classes in equilibrium/ The EU has its roots in a cartel of coal and steel, and later came other cartels. The Eurogroup is a democracy free zone. The European Parliament is a very interesting building but not a real parliament. In Greece, we suffered the greatest depression since the 1930s. Only 9% of the unemployed get unemployment benefits. The Eurogroup told me that nay program is a good program as long as it is this specific program they originally designed. In the 60s they used tanks, now the banks. We were threatened with the closure of the banks and people still voted NO. Tragically, our government decided to surrender. We did a lot of damage to other left wing European parties. In Brussels, the truth comes out when microphones are closed. In Spain, you rescued the banks and paid with austerity. When you have different economies and put them together, you have a tsunami of money from surplus countries like the northern ones to the southern countries. This flow of money comes in the form of loans. In Spain, it came through developers building houses and people felt rich. In Greece, the money went into the state sector. The government built high highways, Olympic stadiums and corruption. Everything came from borrowed money from Germany. It had to be borrowed because that’s how it works. When the music stopped, Spanish developers went bankrupt, then the banks and then the state. In Greece, the state suffered but the result was the same: austerity. In the US, the Federal Government stood behind failing banks in states. Break down the unholy alliance with external bankers. A banker must know that if the bank goes bankrupt, the banker goes home. Public debt crisis: In Spain, there is a state crisis because of the banks. In the US, the Federal Government takes over. In the euro-zone we need proposals that are relevant We split the state debt like this: 60% of national debt, blue / good debt. The rest is red / bad debt. Each country stay with the red debt but Europeanize the blue debt. From now on, the ECB services the good debt on behalf of the national state. So, the ECB operates as a go between the state and the money markets. We benefit because the ECB has a good name and it can borrow at near 0% interest rate. So, 40% of total euro-zone debt just goes away without anybody losing money – the interest rate becomes zero. There is a constant conflict between the ECB and the Bundesbank. The Bundesbank took the ECB to court. The mere announcement of this scheme could make the debt crisis would go away. On Investment: the lack of investment shows us that there is a big problem in Europe. A lot of debt means a lot of accumulated money. Too much money. The rich people in Europe have more money than ever. The money is stuck. Interest rates are below zero. In bonds and shares there’s risk and the mattress is not large enough. German pension funds don’t have where to invest the money because of negative yields. The solution would be to invest in productive things, including green causes. The problem is that if money is invested, nobody will be able to buy the goods – a vicious cycle. To break and kickstart, you need to guarantee this with the state. The southern states are bankrupt. France is bankrupt. France is required not to overspend from Germany. The European Investment Bank could ignite investment in green energy. There is no political will behind the EIB which belongs to all of us. If the ECB would have bought investment bonds and not state bonds and they have the right to do that according to the charter. The ECB could buy EIB bonds. When rich people will see this investment, other investors will jump in and that will kickstart the whole economy. The model is the US in the 30s. China saved Europe in 2008. The Chinese government cranked up the machine in 2008. China’s investment ratio has been 50% – unprecedented. Germany managed to survive thanks to China. The Chinese knew that they were buying time – 5 years to create demand. But we haven’t done anything. Now China is deflating while Europe is nowhere near recovering. The current situation is a gross failure of the euro-zone. The Eurogroup is not distinguished by intellect. They just repeat the rules and don’t accept changing the rules. Luis de Guindos is a very clever man. In the Eurogroup de Guindos had only the mantra. SchÃ¤uble is a very enlightened man but also repeating the rules mantra without challenging the rules. Eurogroup: The whole is far less than the sum of the parts. We should be ashamed of the level of poverty and also on treating refugees. Poverty is a political issue, and aids the rise of the extreme right. If Draghi were to write a check to every poor family, it would be great, but the ECB is forbidden to do that. When a Spaniard buys a Volkswagen, the money goes from the buyer to the central bank in Madrid and this says in turn to the Bundesbank: send money to VW. So, what actually happens is that the Spanish central bank owes money to the German central bank via the Target2 system. In practice, Spain owes money to Germany, and interest is paid – tax from Spain to Germany. The Bundesbank passes these profits to the German treasury. Why should this money go to the surplus country? The bigger the surplus goes to the surplus countries. Idea: the money goes to fight poverty and does not require a treaty change. The very announcement will make Europeans feel that they are part of Europe. To solve it: The old system to create a national party and act is finished. It doesn’t work. Idea: create a pan-European level and then go to the local elections. There should be a program of what we want to do and that should be inclusive. We want to democratize Brussels. The idea of one person one vote is radical. The commission and the Eurogroup should be accountable to the parliament. At the current stage of degeneration, these ideas are radical. There are 4 time frames but we don’t need a top down party. I am going all around Europe to spread the word. Greece is important to me, but everything that happened to Greece can happen everywhere. People came to talk to us not because of pure solidarity but because of fear that it will happen to them. The party mentality is no longer useful to make a change. The movement should aim to be a European network open to members from different parties. Even the conservatives are not happy with themselves. Immediate term: Full transparency Publication of meeting minutes TTIP should become transparent Short term: Implementing the four policies that do not require treaty changes Medium term: Creating an assembly outside Brussels where elected officials can debate Long term: A new constitutions. If we agree and we shape and it reflects public opinion across Europe, this will be spontaneous across parties across Europe. Q: How can you mobilize people A: What happens in Catalonia was what happened in Greece – feeling alone. We are missing feeling together. Your struggle for the Catalan identity is similar to Greece’s right not to be crushed and workers without rights in Germany. Q: How do you encounter the media? A: We need to get together. The nation state was invented in the 19th century. We Europeans have a lot in common. If we make this movement, the European identity will rise. The euro zone will break down without democracy, just like the gold standard in the 30s. Q: Are you frustrated? A: The Eurogroup is a very unpleasant place. It was 18 against one. The problem was at home, when we began surrendering. The back stabbing and the tendency to give up is what is unbearable. I believe that I did the right thing. In a sense, this is a very long war for democracy. And that was just a skirmish. Europe is more civilized than in the past. Added 19/10: In our latest podcast we analyze Varoufakis’ 4 problems and 4 solutions, and more Follow us on Sticher or on iTunes Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next AUDUSD: Price Stalls Ahead Of 0.7381 FX Tech Strategy 7 years Ex Greek finance minister Yanis Varoufakis is speaking in Barcelona about democracy in Europe following the events that rocked his country and the euro-zone. He is talking in the Centre Cultural El Born in the old part of the Catalan capital. Here are highlights of his talk: Update: Live blog of his appearance in Barcelona on June 1 2016 Thousands of people were waiting in line outside the conference center. The common currency was constructed like the gold standard The Europeans are sighting with each other. 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