Yanis Varoufakis: The six Brexit traps that will defeat Theresa May

“In truth, Brussels is a democracy-free zone. From the EU’s inception in 1950, Brussels became the seat of a bureaucracy administering a heavy industry cartel, vested with unprecedented law-making capacities. Even though the EU has evolved a great deal since, and acquired many of the trappings of a confederacy, it remains in the nature of the beast to treat the will of electorates as a nuisance that must be, somehow, negated. The whole point of the EU’s inter-governmental organisation was to ensure that only by a rare historical accident would democratic mandates converge and, when they did, never restrain the exercise of power in Brussels.



U.S. foreign policy got in the way of helping Greece, Varoufakis says

President Barack Obama offered stinging criticism of Germany’s treatment of Greece in February 2015 remarks.

But as the crisis escalated, the Obama administration declined to speak out.

Only in late June and July, when Germany and other international creditors appeared prepare to force Greece out of the eurozone, with the Greek banking system on the brink of collapse, did the administration speak up.

[Secretary of the Treasury Jack] Lew called for Greece’s creditors to allow the country to restructure its debts and for Greece to continue budgetary and economic reforms. Some experts believe the United States was behind the release of an IMF report characterizing the country’s debt as unsustainable. The report came out over European objections at the height of last-minute debt negotiations in early July. […]

[Yanis Varoufakis] argued on Wednesday that the United States’ inaction on Greece stemmed from a belief that Greece was ‘in the sphere of influence of Germany.’ […]

Intervening was not worth the risk of jeopardizing German unity with the U.S. against Russian meddling in Ukraine, as well as collaboration on the U.S.’s agenda in Libya and Syria, according to the ex-finance minister.


Yanis Varoufakis: The lenders are the real winners in Greece

“Tsipras must now implement a fiscal consolidation and reform programme that was designed to fail. Illiquid small businesses, with no access to capital markets, have to now pre-pay next year’s tax on their projected 2016 profits. Households will need to fork out outrageous property taxes on non-performing apartments and shops, which they can’t even sell. VAT rate hikes will boost VAT evasion. Week in week out, the troika will be demanding more recessionary, antisocial policies: pension cuts, lower child benefits, more foreclosures.

The prime minister’s plan for weathering this storm is founded on three pledges. First the agreement with the troika is unfinished business, leaving room for further negotiation of important details; second, debt relief will follow soon; and third Greece’s oligarchs will be tackled. Voters supported Tsipras because he appeared the most likely candidate to deliver on these promises. The trouble is, his capacity to do so is severely circumscribed by the agreement he has already signed.

His power to negotiate is negligible given the agreement’s clear condition that the Greek government must ‘agree with the [troika] on all actions relevant for the achievement of the objectives of the memorandum of understanding’ […]”


The Conversation: Varoufakis in conversation with leading academics

“Mark Taylor, University of Warwick: Would you agree that Greece does not fulfil the criteria for successful membership of a currency union with the rest of Europe? Wouldn’t it be better if they left now rather than simply papering over the cracks and waiting for another Greek economic crisis to occur in a few years’ time?

Yanis Varoufakis: The eurozone’s design was such that even France and Italy could not thrive within it. Under the current institutional design only a currency union east of the Rhine and north of the Alps would be sustainable. Alas, it would constitute a union useless to Germany, as it would fail to protect it from constant revaluation in response to its trade surpluses.

Now, if by ‘criteria’ you meant the Maastricht limits, it is of course clear that Greece did not fulfil them. But then again nor did Italy or Belgium. Conversely, Spain and Ireland did meet the criteria and, indeed, by 2007 the Madrid and Dublin governments were registering deficit, debt and inflation numbers that, according to the official criteria, were better than Germany’s. And yet when the crisis hit, Spain and Ireland sunk into the mire. In short, the eurozone was badly designed for everyone. Not just for Greece.


Yanis Varoufakis: Operation Exit

“Als der griechische Staat 2010 zahlungsunfähig wurde, gab es zwei Möglichkeiten, sollte das Land weiter Mitglied der Eurozone bleiben: Die vernünftige Option zielte auf Umschuldung und Reformierung der nationalen Ökonomie; die toxische Option bestand darin, einem bankrotten Gemeinwesen immer neue Kredite zu gewähren und so zu tun, als sei es weiter solvent.

Das offizielle Europa entschied sich für Variante zwei und stellte die Rettung französischer und deutscher Banken, bei denen der griechische Staat besonders in der Kreide stand, über die sozioökonomische Lebensfähigkeit Griechenlands. Eine Umschuldung hätte bedeutet, dass die Geldhäuser, bei denen sich Griechenland Geld geliehen hatte, Verluste hätten hinnehmen müssen. Weil sie unbedingt das Eingeständnis vermeiden wollten, dass die Steuerzahler erneut für untragbare Kredite von Banken zu zahlen hatten, stellten die EU-Funktionäre die griechische Staatspleite als ein Problem mangelnder Liquidität dar und rechtfertigten den Bail-out mit der ‘Solidarität’ gegenüber den Griechen.

Um den zynischen Transfer privater Verluste in die öffentliche Hand als einen Akt ‘liebevoller Strenge’ darzustellen, wurden den Griechen Sparmaßnahmen von bis dato unbekanntem Ausmaß auferlegt. Dies führte dazu, dass das griechische Nationaleinkommen, mit dem nun neue und alte Schulden beglichen werden mussten, um mehr als ein Viertel einbrach. Es bedarf der mathematischen Expertise eines aufgeweckten Achtjährigen, um zu sehen, dass die Sache nicht gut ausgehen konnte.


Yanis Varoufakis full transcript: Our battle to save Greece [Interview]

HL: What is the greatest problem with the general way the Eurogroup functions?

YV: [To exemplify…] There was a moment when the President of the Eurogroup decided to move against us and effectively shut us out, and made it known that Greece was essentially on its way out of the Eurozone. … There is a convention that communiqués must be unanimous, and the President can’t just convene a meeting of the Eurozone and exclude a member state. And he said, ‘Oh I’m sure I can do that.’ So I asked for a legal opinion. It created a bit of a kerfuffle. For about 5-10 minutes the meeting stopped, clerks, officials were talking to one another, on their phone, and eventually some official, some legal expert addressed me, and said the following words, that ‘Well, the Eurogroup does not exist in law, there is no treaty which has convened this group.’

So what we have is a non-existent group that has the greatest power to determine the lives of Europeans. It’s not answerable to anyone, given it doesn’t exist in law; no minutes are kept; and it’s confidential. So no citizen ever knows what is said within. … These are decisions of almost life and death, and no member has to answer to anybody.”


Yanis Varoufakis: Germany won’t spare Greek pain—it has an interest in breaking us

“In my first week as minister for finance I was visited by Jeroen Dijsselbloem, president of the Eurogroup (the eurozone finance ministers), who put a stark choice to me: accept the bailout’s ‘logic’ and drop any demands for debt restructuring or your loan agreement will ‘crash’—the unsaid repercussion being that Greece’s banks would be boarded up. […]

Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.”