Greek Finance Minister Yanis Varoufakis. (AP/Virginia Mayo)

The New York Times fell on its face when it attempted to caricature the new anti-austerity Greek government as “dangerously naive” by suggesting that its finance minister, Yanis Varoufakis, did not understand the basic debt dynamics of his country, writes Andy Robinson at Fairness & Accuracy in Reporting.

The ill-executed effort, made in late January by Times reporter Liz Alderman, included an erroneous definition of an accounting concept at the center of the Greek debt problem (emphasis added):

When pressed to describe how Greece would pay for bonds falling due in the coming months without taking the €7 billion installment, Mr. Varoufakis replied, “Let’s not talk about details.” To SYRIZA’s detractors, such remarks might signal that the new government does not understand the magnitude of Greece’s financial challenges. But Mr. Varoufakis suggested that the government could finance its obligations by reducing the target for the so-called primary surplus, the amount of cash in Greece’s coffers after expenses and interest payments.

Robinson writes that “Alderman got the primary surplus back to front. The definition should actually be before interest payments — the primary surplus being a measure of whether a government would be spending more than it takes in if it weren’t paying back past borrowing. Could it be that the Times’ reporter does not understand the magnitude of Greece’s financial challenges?

“Varoufakis surely does. He is a top economist, author of the influential Modest Proposal for Resolving the Eurozone Crisis, a Keynesian plan offered as an alternative to austerity. Before being named Finance minister last week, he was working on debt dynamics with James Galbraith at the University of Texas at Austin.”

— Posted by Alexander Reed Kelly.


If you're reading this, you probably already know that non-profit, independent journalism is under threat worldwide. Independent news sites are overshadowed by larger heavily funded mainstream media that inundate us with hype and noise that barely scratch the surface. We believe that our readers deserve to know the full story. Truthdig writers bravely dig beneath the headlines to give you thought-provoking, investigative reporting and analysis that tells you what’s really happening and who’s rolling up their sleeves to do something about it.

Like you, we believe a well-informed public that doesn’t have blind faith in the status quo can help change the world. Your contribution of as little as $5 monthly or $35 annually will make you a groundbreaking member and lays the foundation of our work.