Greece's finance minister says the country won't back down in crucial negotiations

Yanis VaroufakisREUTERS/Marko DjuricaNewly appointed Greek Finance Minister Yanis Varoufakis attends a hand over ceremony in Athens, January 28, 2015.

Greek finance minister Yanis Varoufakis has lowered hopes of a deal in critical negotiations with fellow European finance ministers today, as he ruled out crossing any “red lines” in Greece’s demands.

Varoufakis, who has been hailed as a master game theorist after the press noted that he had written a book on the subject, wrote an opinion piece for the New York Times in which he dismissed game theory as a useful tool in the discussions.

Instead, he said, the negotiations are not “a bargaining game to be won or lost via bluffs and tactical subterfuge” but must instead “forge new motives” from all sides to find a solution.

In keeping with this spirit, he dismissed rumours that the Greek side may be willing to make major concessions in an effort to reach a deal with the Eurogroup today.

He writes:

The lines that we have presented as red will not be crossed. Otherwise, they would not be truly red, but merely a bluff.

Rather than game theory, Varoufakis suggests Europe look to the work of German philosopher Immanuel Kant. He says Kant teaches us that “the rational and the free escape the empire of expediency by doing what is right.”

Perhaps here, he was hinting to Kant’s famous proposition that we must treat people always as ends in themselves and not as a means to something else. Certainly that is what he appears to be hinting at with his examples of the “hungry in the streets of our cities” and the “stressed middle class” of Greece.

But the lessons of Kant are also inflexibility and an inability to compromise on ideals. The philosopher believed in finding “universalizable” maxims, or rules, that could apply to all people in all situations. This seems a very long way away from the complex political-economy of the Eurozone and the various pressures facing individuals within the Eurogroup.

One of the major problems is a growing rift between the best possible economic outcome and an acceptable political solution. What Varoufakis appears to be saying is that the former must be prioritised over the latter — that Greece can no longer go on with the “extend and pretend” policies that the European Commission, the IMF and the ECB insist upon whereby Greece accepts more loans that it has little hope of ever paying off.

Giving in to that demand, however, would require his European partners going back to their electorates and telling them that they won’t be getting their money back…ever. That is a big political red line in the sand for most of them, which they too will be highly unwilling to cross.

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