Yanis Varoufakis's Blog, page 116
November 2, 2017
Η πολιτική πρόταση του DiEM25
Οι επτά τομές που χρειάζεται η χώρα για να μπει στον δρόμο της ανάκαμψης, όπως παρουσιάστηκαν στη πρώτη μεγάλη ανοιχτή συγκέντρωση του DiEM25 στην Αθήνα στο Γήπεδο Σπόρτιγκ. “Όσο εκείνοι ψηφίζουν τα μέτρα της δήθεν «αξιολόγησής» τους, εξαναγκάζοντας το Κοινοβούλιο σε έναν ακόμη αυτο-εξευτελισμό, εμείς, χωρίς θυμό αλλά με ανεξάντλητη αποφασιστικότητα, επαναφέρουμε την Ελπίδα, την Λογική και την Αξιοπρέπεια.” Αθήνα 19 Μάη 2017.
Long, personal interview with William Leith in The Guardian on ‘Talking to my Daughter About the Economy’
He was in an odd situation. Xenia was born in Australia. But Varoufakis himself was “not exactly” living in Australia. “My daughter came to life as the result of a broken-down marriage. “My former wife and I managed to do that which I always loathed when people did it. We managed to have a child when we were breaking up. Not a good idea … but it turned out brilliantly.”
It was 2004. “Thirteen years later, everything is absolutely fantastic.” But at the time, it didn’t feel fantastic. He was torn. Bonding with Xenia, having split up with her mother. His heart in Australia, his head in Greece. Emotionally, he was being ripped apart. He tries to describe it. “A major tragedy,” he says.
He had met Margarite, Xenia’s mother, in Australia; he was working in the economics faculty at the University of Sydney. Margarite, who is Greek-Australian, is an academic, too – a historian. They fell in love, got married and moved to Athens. “We broke up in Greece, we tried to patch things up, we broke up again, we tried to patch things up. In the end, when we decided we were going to part … conception happened.”
[image error] Yanis Varoufakis speaks to the press in Athens after resigning as finance minister after the referendum on Greece’s bailout package in July 2015. Photograph: Fotis Plegas G/EPA
Margarite moved back to Australia, not knowing she was pregnant. Then she found out. They talked on the phone. About “arrangements”, how they would do this. Varoufakis “rushed back” for the birth. After Xenia was born, he persuaded Margarite to come back to Greece “to see if we could make things work”.
It lasted a year. “Which was fantastic; I changed nappies for a year … incessantly and exclusively, fearing that every day would be the last day of me having the child.” Margarite was “always meaning” to go back to Australia, he says. “The relationship was not working. It was not patched up. And then she went back. That was a nightmare. Because I was missing my daughter so badly.”
He wondered what on earth he was going to do. But at least there was Skype. “I had a Skype screen installed next to her bed, and I would read to her, every night, a bedtime story. And she would fall asleep with Skype.” Xenia would close her eyes in Sydney at the end of the day. Varoufakis, watching in Athens, would look up, and his day would be just beginning.
I am with Varoufakis at his publisher’s office in London. A lot has happened since Xenia’s birth. He has remarried, worked in the economics faculty at the university of Athens, tried, and failed, to persuade the German government to stop squeezing Greece for every last euro; and written several books. The most recent of his books is aimed at Xenia. It’s called Talking to my Daughter About the Economy.
“In a sense,” he says, “one of the reasons why I wrote the book was because it allowed me, during the hours when I was imagining I was talking to her about the economy, [to feel] that I was close to her.”
In the book, he explains the history of capitalism. It is very clear and easy to understand. At first, we were apes. Then we came down from the trees, learned to speak, and over-hunted our prey. So we were forced to invent farming. Suddenly, we had a surplus of goods, namely grain, which we kept in communal silos. Hence the need for writing, to keep track of who owed what to whom. We wrote on shells, which became money. Next, we minted coins. Markets developed. The few who were literate invented religion to justify their power.
For Varoufakis, the world changed massively in the 17th century. Global trade had made merchants rich. Feudal lords were being left behind. So they kicked the serfs off their land, and re-hired them as debtors. In other words, serfs became entrepreneurs; in practice, these new entrepreneurs were never out of debt.
[image error] Yanis Varoufakis with his daughter Xenia Photograph: Courtesy of Yanis Varoufakis
“It’s the Great Reversal, as I call it,” says Varoufakis. Originally, the economy had been driven by what people produced. Now, it was driven by debt. “The Great Reversal makes debt the economic turbocharger.”
What then followed was the modern world – the Industrial Revolution, factories, empires, great inequality – and, eventually, the huge backlash of communism.
Varoufakis’s father, Giorgios, was a communist. Born in the 1920s, Giorgios, whose parents were Greek, grew up in Cairo before going to the University of Athens to study chemistry. But he was caught up in the civil war. Asked by the police to denounce communism, he refused. He was imprisoned in a jail for communists for four years – which turned him into a communist. Afterwards, when Giorgios resumed his degree, a woman from a rightwing group was told to keep an eye on him. This was the woman who became Varoufakis’s mother, Eleni.
Giorgios’ left-wing ideas prevailed over Eleni’s conservative ones, and they both ended up towards the left of centre. Varoufakis tells me his family home was “modest”. Giorgios, a steel engineer, had trouble getting or keeping work during the far-right regime in the 50s. As a communist, he kept getting fired. “The secret police would come and ask the employer to fire him.” Eventually, one company, Halyvourgiki, hired him as personal assistant to the boss, at a massively reduced rate. “He was exploited,” says Varoufakis. “The nice ironic twist,” he says, “is that my father is the chairman of the board of that company. And he occupies the office of that man. To this day. As we speak.”
We talk about Varoufakis’s up-and-down life. He fizzes with energy. He tells me how his mother’s brother was arrested and jailed; the young Varoufakis visited him in his cell. It seemed liked a big adventure, he says. After the rightwing regime collapsed, the family’s fortunes took a positive turn. Yanis was sent to the private Moraitis School in Athens, and later studied maths and economics at Essex and Birmingham universities. After that, he became an academic. He got a job at the University of Sydney, met Margarite, and after a crazy few years, found himself back in Athens, looking at a baby on a Skype screen.
One day, during this period, he went to an art gallery in Athens, and something strange happened. In his heightened emotional state, he walked into a dark room in which there was an installation. “It’s dark. The floor is covered in red soil – thick red soil. There is a spotlight in the middle of the room creating a red circle on the floor. There was a very powerful soundscape. Deep breathing, like –”
Varoufakis breathes deeply. “And the whole of the floor in the middle was moving up and down. The whole room, the soil, the earth, was breathing … and I thought, Wow.” This was Breathe, a work by Danae Stratou – who is, incidentally, the person Jarvis Cocker wrote about in his song Common People. (Varoufakis won’t confirm this officially.) Shortly afterwards, Yanis met Stratou, who is from a very wealthy background, at a dinner party. They fell in love. Now he lives in Athens with Stratou and her two children.
Meanwhile, capitalism looks unhealthy, to say the least, and he has been trying to explain this to Xenia. “I try not to be negative in the book,” he says. “I try to tell her what is fascinating and what is wrong. All in one. Because you really don’t want to dump on a child with gloom and doom. Do you think my book is gloomy? If it is, I’ve failed.”
Well, I say, it has to be gloomy in some ways.
“In some ways, yes.”
Life, he says, is “fantastic”. It is certainly better than it was. He has just spent a month on the island of Aegina, with Danae, her two children, as well as Xenia, and Georgios, who is now 93. He has started the Democracy in Europe movement, an attempt to reform the EU. He will go to Sydney at Christmas to see Xenia. “She’s an Aussie kid,” he says. “But she’s also Greek. She’s very down to earth. She’s very bookish. She reads a lot … she’s a happy kid, I think.”
• Talking to My Daughter About the Economy by Yanis Varoufakis (Bodley Head Adults, £14.99). To order a copy for £10.49, go to guardianbookshop.com or call 0330 333 6846. Free UK p&p of more than £10, online only. Phone orders min p&p of £1.99
For The Guardian’s side click here.
Q&A with Esquire Magazine plus a warning for Trump, 2nd November 2017
AS TOLD TO ASH CARTER, NOV 2, 2017
Yanis Varoufakis, former finance minister of Greece and author of Adults in the Room, discusses his abysmal first salary, negotiating with the IMF, and what he would say to Donald Trump.
Money was always very scarce in my household. Greece was a poor country. My parents were extremely fiscally conservative. Credit cards and loans and mortgages were abhorrent to them. I don’t think they were ever in debt, even when they were very poor. This is something that people find hard to fathom, but in 1980, Greece had the lowest level of debt in Europe. We were save, save, save, like the Chinese are today. Financialization, which is a global phenomenon, hit Greece around then. Suddenly, this culture of parsimony evaporated.
I had a choice when I completed my master’s in statistics: I could opt for a very handsome salary or I could opt for a Ph.D., not even knowing if I would get an academic job in the end. (Tenure, of course, was always iffy.) I chose to condemn myself to permanent poverty, but I never looked back. The fact that I could choose what I researched and I didn’t have anyone cracking a whip—to me, that was priceless.
“I CHOSE TO CONDEMN MYSELF TO PERMANENT POVERTY, BUT I NEVER LOOKED BACK.”
My first salary came in 1983, when I got my first lectureship at the University of Essex in Britain. I remember the salary well because it was abysmal: £7,520 annually, gross [about $11,500]. That number will always stay with me.
There is no money in the highest form of economic theory. When economists refer to the price of coffee, in the back of their mind they’re using a metaphoric marker: how much coffee you get, let’s say, for one pound of sugar. In physics, the more complicated and abstract the theory, the closer you get to understanding nature. In economics, it’s the opposite. The more abstract and complicated the theory becomes, the less related it is to real, existing capitalism.
I take risks with my own financial affairs, because in the end, I will only have myself to blame. But when it came to carrying a whole nation, I was extremely conservative, and my bargaining strategy was to lay all my cards on the table from the beginning and say, “This is it. Now you can do anything you want, you can shoot me, but I’m not going to budge.”
It’s difficult to negotiate with creditors who do not want their money back—who care only about humiliating you, about making an example of you for others. And this was, I’m afraid, the situation I was facing with Greece’s creditors: the International Monetary Fund, the European Central Bank, and the European Commission. Their great nightmare was a mutually advantageous agreement, because then the Spaniards, the Irish, the Portuguese, and the Italians would interpret this as weakness on their behalf.
We need a new global financial system that is closer to the one that John Maynard Keynes proposed at the Bretton Woods Conference in 1944. Imagine that we have a common currency that is totally fictitious. It’s an accounting unit, managed by the IMF—let’s call it the “kosmos”—and countries that have a trade surplus, like Germany, get taxed. That way, you create a fund that can be used for investment purposes in the parts of the world that need it the most.
Mr. Trump, don’t you dare mess around with China, because you are playing with fire. If the Chinese economy goes into a recession as a result of your shenanigans, you, mate, are in deep trouble.
“IF THE CHINESE ECONOMY GOES INTO A RECESSION AS A RESULT OF YOUR SHENANIGANS, YOU, MATE, ARE IN DEEP TROUBLE.”
My view of money is that of the ancient Athenians: It is a fantastic thing to have and a terrible thing to try to get. If you asked me how much I would want, I would say, “An infinite quantity.” If you asked me what I was prepared to do to get it, the answer would be “Nothing.”
I believe in hedonism. If somebody has money, and they haven’t stolen it, and it isn’t exploitative—they’re not destroying the rain forest or using slave labor—they can spend it on whatever gives them pleasure. I am not judgmental. But I do not understand why anyone would get pleasure from gambling.
Money is what we will not need in a good society. The good society is Star Trek. (I’m a Trekkie, by the way.) You have replicators producing everything, and people can just sit around the bridge of the USS Enterprise discussing philosophical issues about alien species.
October 30, 2017
Lesbos’s Ghosts, Europe’s Disgrace – Project Syndicate op-ed, 31st October 2017
Oct 31, 2017 YANIS VAROUFAKIS , GEORGE TYRIKOS-ERGAS
In September alone, another 2,238 refugees arrived in Lesbos, despite Turkey’s attempts to cut the flow. A camp designed for 2,000 people now “houses” three times that number, behind rows of barbed wire, in a magma of mud, refuse, and human excrement.
ATHENS – In 2015, hundreds of thousands of refugees landed on Greece’s island shores. Many had perished at sea. Today, the international public has been lulled into believing that Greece’s refugee crisis has abated. In fact, it has become a permanent scourge blighting Europe’s soul and brewing future trouble. The island of Lesbos was, and remains, its epicenter.
The story of Shabbir demonstrates how starkly reality clashes with Europe’s official storyline. Shabbir, 40, lived with his wife and two young children in a midsize town in Pakistan, where he ran a car rental business. One night in December 2015, a local group of Islamist extremists petrol-bombed Shabbir’s neighbor’s home and waited outside for the fleeing family.
Shabbir’s neighbors were Christian, and the extremists were keen to evict them and convert their home into a madrasa (religious school). Instinctively, Shabbir rushed to his Christian neighbors’ defense. Designated an “apostate,” his business was burned down, his brother was brutally murdered, his wife and children fled to neighboring villages, and Shabbir, together with his elderly father, took the long, cruel road, via Iran and Turkey, to imagined safety in civilized Europe…
For the rest of the article please click here.
Συνέντευξη στην Guardian (μεταφρασμένη στα ελληνικά) επί τη ευκαιρία της αγγλικής έκδοσης του “Μιλώντας στην κόρη μου για την οικονομία”
Η κόρη μου είναι ο πιο σκληρός κριτής μου, οπότε, ακόμα κι αν της αρέσει κάτι, είναι πολύ φειδωλή στις φιλοφρονήσεις. Υπό αυτή την έννοια, χάρηκα με τα ενθαρρυντικά της λόγια που ήταν κάτι του τύπου:”Δεν είναι πολύ κακό.”
Την ενδιαφέρουν τα οικονομικά;
Καθόλου, αλλά ενδιαφέρεται πολύ για την πολιτική, αν και δε θα το έλεγε η ίδια. Ενδιαφέρεται για πολιτικά θέματα όπως ο φεμινισμός, ο ρατσισμός και η ανισότητα. Δε θα έλεγε ποτέ επί λέξει “Με ενδιαφέρει η πολιτική.” Αλλά η ουσία είναι που μετράει και όχι οι ταμπέλες.
Πως ήταν να γράφετε για την οικονομία σε με σχετικά απλή γλώσσα; Σας έκανε να αναστοχαστείτε σχετικά με τις απόψεις σας;
Ήταν μια διαδικασία πολύ διασκεδαστική και συνάμα πολύ απαιτητική. Ήταν χαρά μου να απευθύνομαι σε αναγνώστες χωρίς θεωργτικά βαρύδια, αλλά και μεγάλη πρόκληση να πρέπει να μιλήσω για τον καπιταλισμό χωρίς να αναφέρομαι καν στον… καπιταλισμό. Εν τέλει, πρέπει να μπορείς να το κάνεις αυτό για να αποδείξεις στον εαυτό σου ότι ξέρεις πραγματικά για τι μιλάς. Η εμμονή σε περίπλοκους τεχνικούς όρους κρύβει αδυναμία καταννόησης.
Θέλετε να βελτιώσετε τον καπιταλισμό ή να τον εξαλείψετε;
Both. Capitalism cannot end by sheer willpower. As we all know, it was a spectacular failure of the left to try to end capitalism. Capitalism has to be moderated and stabilised, because its deep crisis, as we see today, is that it does not encourage humanism. It encourages misanthropy. We must stabilise the situation and have a discussion about how the new technologies can be put to use for humanity.
Και τα δύο.Ο καπιταλισμός δε θα εξαλειφθεί μόνο με τη δύναμη της θέλησης. Όπως ξέρουμε, η Αριστερά απέτυχε θεαματικά να εξαλείψει τον καπιταλισμό. Ο καπιταλισμός πρέπει να σταθεροποιηθεί, γιατί, όπως βλέπουμε σήμερα, η κρίση του δεν ενθαρρύνει τον ανθρωπισμό αλλά τη μισανθρωπία. Πρέπει να σταθεροποιήσουμε την κατάσταση ώστε να αρχίσουμε να συζητάμε σοβαρά το πως οι νέες τεχνολογίες μπορούν να βοηθήσουν ουσιαστικά την ανθρωπότητα υπερβαίνοντας την καπιταλιστική οργάνωση της ζωής μας.
Γράψατε το βιβλίο στο πανέμοφρο σπίτι σας στην Αίγινα με θέα το Σαρωνικό. Θα θέλατε ένα κόσμο όπου κανείς δε θα μπορεί να απολαμβάνει τέτοιου είδους υλικά προνόμια;
Όχι, θα ήθελα έναν κόσμο όπου είμαστε όλοι προνομιούχοι, και κατά μία έννοια είμαστε, γιατί πιστεύω ότι η ομορφιά μας περιβάλλει, αρκεί να επιτρέπουν οι κοινωνικές συνθήκες να την απολαύσουμε, να παύσει το κέρδος του ενός να βασίζεται στην δυστυχία ενός άλλου, και βέβαια να μην καταστρέφουμε το περιβάλλον. Το πιο σημαντικό συστατικό της ευτυχίας είναι να μπορείς να έχεις τον έλεγχο της ζωής σου, να διαλέγεις αυτούς που σε συντροφεύουν, τα πρότζεκτ στα οποία δουλεύεις. Αν μπορείς να το κάνεις αυτό, ο κόσμος γίνεται ομορφότερος γύρω σου. Πιστεύω αυτό είναι ένα προνόμιο που όλοι μπορούμε να έχουμε.
Γράφετε ότι δεν επιτρέπουμε στον εαυτό μας να σκεφτεί ότι η φτώχια των άλλων μπορεί να είναι αποτέλεσμα της ίδιας διαδικασίας που οδήγησε στα δικά μας αγαθά ή κέρδη. Απολαμβάνετε τις όποιες ανέσεις σας λιγότερο γνωρίζοντας τα παραπάνω;
Πρώτα απ’όλα ναι, έχετε απόλυτο δίκιο. Τα προνόμια προέρχονται από την εκμετάλλευση. Κανείς δεν μπορεί να έχει εκατομμύρια στην τράπεζα (κάτι που δεν ισχύει στην περίπτωσή μου, παρά τις περί του αντιθέτου ανοησίες που γράφονται) και να πιστεύει ότι τα κέρδισε με τη δουλειά του. Όμως, δευτερευόντως, να αναφέρω ότι γείτονάς μας στην Αίγινα είναι ένας αγρότης που έχει ακριβώς την ίδια θέα. Πιστεύει ότι είναι προνομιούχος κι αυτός, αλλά με άλλη έννοια. Η ευτυχία σπάνια είναι σε συνάρτηση των προνομίων που μοιράζει τόσο άνισα ο καπιταλισμός.
Στη συμβουλευτική επιτροπή του DiEM25 βρίσκεται ο Τζούλιαν Ασάνζ, ένας Αυστραλός που διαφεύγει του ευρωπαϊκού νόμου στην πρεσβεία του Εκουαδόρ. Είναι το κατάλληλο πρόσωπο να συμβουλεύει για την Ευρώπη;
Εϊμαι περήφανος για τη φιλία μου με το Τζούλιαν. Θα προσέξατε ότι η Σουηδή εισαγγελέας απέσυρε κάθε σκέψη άσκησης δίωξης εναντίον του. Φαντάζει τουλάχιστον περίεργο που θεωρείται ένοχος ενώ δεν απαγγέλθηκαν καν κατηγορίες εναντίον του. Ο Ασάνζ διώκεται ουσιαστικά για έναν απλό λόγο: γελοιοποίησε τις μυστικές υπηρεσίες των ΗΠΑ και έβγαλε στην επιφάνεια εγκλήματα πολέμου. Τα Wikileaks είναι ένα λαμπρό παράδειγμα του πως μπορεί κανείς να αποκλαύψει τις πράξεις και το ποιόν του Μεγάλου Αδελφού στρέφοντας την ίδια του την τεχνολογία εναντίον του. Για αυτό ο Τζουλιάν είναι, επί της ουσίας, κρατούμενιος στην πρεσβεία του Εκουαδόρ στο Λονδίνο υπό συνθήκες που ο ΟΗΕ χαρακτήρισε “παράνομη κράτηση”.
Να πιστέψουμε δηλαδή ότι οι κατήγοροί του συμμετείχαν σε σκευωρία με σκοπό την έκδοσή του στις ΗΠΑ;
Δε με ενδιαφέρουν οι εικασίες. Αυτό που ξέρω είναι ότι στη Σουηδία δεν κατηγορήθηκε τελικά για τίποτα. Τώρα οι ΗΠΑ δήλωσαν ξεκάθαρα ότι βρίσκεται εν εξελίξει δικαστική δίωξη εναντίον του για “κατασκοπεία”. Αν καταλήξει να δικαστεί στις ΗΠΑ με αυτή την κτηγορία, η δίκη θα είναι μια παρωδία, μια ντροπή: Οι δικηγόροι του δε θα λάβουν καν στα χέρια τους τη δικογραφία. Θα διεξαχθεί κεκλεισμένων των θυρών και θα τον εξαφανίσουν σε μια φυλακή υψίστης ασφαλείας για πάντα. Κανένας φιλελεύθερος άνθρωπος δεν μπορεί να δεχτεί μια τέτοια διαδικασία.
Διατηρείτε κάποια σχέση με τον πρωην φίλο σας, τον κύριο Τσίπρα;
Όχι, γιατί δεν πιστεύω ότι έχει κάτι που να μπορεί να μου πεί. Για να μπορεί να συνεχίζει την πορεία που επέλεξε, πρέπει να πείσει τον αυτό του με ένα αφήγημα που και ο ίδιος ξέρει ότι είναι αβάσιμο. Άρα κάθε συζήτηση μεταξύ μας θα ήταν σύντομη και ανώφελη.
Πιστεύετε ότι στο βάθος ο Κόρμπιν ήταν υπέρ της παραμονής της Βρετανίας στην ΕΕ;
Πιστεύω ότι πείστηκε από επιχειρήματα όπως αυτά που του εκφράσαμε ο Τζον ΜακΝτόνελ κι εγώ. Δεν είναι ασυνέπεια να πιστεύεις ότι δεν έπρεπε να μπεις στην ΕΕ, αλλά, άπαξ και μπήκες, ότι είναι λάθος να φύγεις. Η κριτική που του γίνεται ότι δεν είναι παθιασμένος με την Ευρώπη είναι γελοία. Κανένας δεν μπορεί να παθιαστεί με αυτή την Ευρώπη. Κάνουμε σφοδρή κριτική στην Ευρώπη αλλά δεν προτείνουμε να βγούμε από αυτή. Πιστεύω πως αυτή είναι η θέση την οποία κατέληξε να υποστηρίζει και ο Τζέρεμι Κόρμπιν.
Mε τι άλλο αχολείστε αυτή τη στιγμή, εκτός από τη συγγραφή και το DiEM25;
Το μέγα μέρος του χρόνου μου το επενδύω στο DiEM25 και στην συγγραφή άρθρων και βιβλίων. Περί την μία φορά τον μήνα κάνω εμπορικές διαλέξεις – εν μέρει για τα προς το ζην της οικογένειάς μας και εν μέρει για να υποστηρίξω οικονομικά το DiEM25. Είναι συναρπαστικό να πηγαίνω στο Αμβούργο και να δίνω δύο διαλέξεις σε μια μέρα – το πρωί σε 500 Γερμανούς τραπεζίτες και το απόγευμα σε 1000 ακτιβιστές του DiEM25, να εκφωνώ τον ίδιο πάνω-κάτω λόγο, και να εισπράττω τη ίδια θερμή αποδοχή και από τα δύο ακροατήρια! Αυτό επιβεβαιώνει σε τι βαθιά κρίση βρίσκεται η Ευρώπη!
Φέτος είναι η 100η επέτειος της Οκτωβριανής Επανάστασης. Βλέποντας την κληρονομιά που άφησε, πιστεύετε ότι είναι μια επέτειος που αξίζει εορτασμού;
Απολύτως. Φυσικά, όμως, όπως κάθε επανάσταση στο τέλος κατέληξε άσχημα. Για αυτό οι εορτασμοί όμως πρέπει να περιέχουν πολλά στοιχεία κριτικής. Εϊναι μια διαλεκτική διαδικασία κατά την οποία γιορτάζουμε και θρηνούμε ταυτόχρονα. Αυτό που ισχύει όμως όχι μόνο για την επανάσταση αλλά και για κάθε καλό έργο τέχνης, θεάτρου, κινηματογράφου…
ΓΙΑ ΤΗΝ ΣΥΝΕΝΤΕΥΞΗ ΑΥΤΗ ΣΤΑ ΑΓΓΛΙΚΑ, ΟΠΩΣ ΔΗΜΟΣΙΕΤΗΚΕ ΣΤΗΝ GUARDIAN, ΠΑΤΗΣΤΕ ΕΔΩ.
October 29, 2017
POINT DE VUE. Le bon chemin du Grec Yanis Varoufakis
Son livre (1) le dit simplement : l’Union européenne et la zone euro, nos vies en Europe, celles des riches, celles des pauvres, sont aujourd’hui soumises à un risque majeur « d’inintelligence politique » entre États membres. Selon Varoufakis, les dirigeants politiques européens ne sont pas sur le bon chemin.
Le summum de l’incompréhension est visible entre les pays économiques excédentaires, Allemagne et Pays-Bas, et les autres. Les dirigeants de ces deux-là feraient bien de tendre l’oreille. En effet, le risque d’instabilité économique et sociale est élevé et nous n’avons pas encore mis en oeuvre ensemble, au moins dans la zone euro à dix-neuf, les moyens d’apprendre à faire mieux que la dernière fois. Certes, la Banque centrale européenne, au-delà de son statut et de sa légitimité, a fait du travail de sortie de crise. L’abondance de liquidités a pu créer une opinion favorable au statu quo dans l’Union économique et monétaire. Mais pour Varoufakis, il est urgent de régler quatre troubles : mauvaise gestion de la dette privée et publique ; pas assez de préparation de l’avenir par les investissements d’avenir ; crise bancaire larvée (en Italie, par exemple) ; pauvreté redoutée (avec ses conséquences dans les électorats).
Des conseils à Macron
Selon Varoufakis redevenu professeur d’économie, l’heure est à la vérité. Premièrement, avec le trop d’épargne de la zone euro, la souscription d’Eurobons doit financer dans chaque État la préparation de l’avenir, à hauteur d’un plan de 5 % du PIB européen en faveur d’une société post-carbone et intelligente (recherche, éducation, santé).
Deuxièmement, un Fonds monétaire européen doit être prêt à recapitaliser les banques qui vont entrer en position de faiblesse. Troisièmement, un accord intergouvernemental doit décider que les bénéfices de la Banque centrale européenne alimentent des cartes de débit de type « coupons aux plus pauvres », qu’ils soient d’Allemagne de l’Est ou de Grèce. Au plan tactique, le conseil politique et tactique de l’adulte (non-mélenchoniste) Varoufakis à l’adulte Macron est celui-ci : oui au plan vertueux sur cinq biens communs (la sécurité et la stratégie européenne de défense et de sécurité civile, la réponse au défi migratoire hors du droit d’asile inconditionnel, les partenariats avec l’Afrique, la transition écologique efficace et équitable avec une taxe du carbone aux frontières, le numérique européen). Mais il lui faudra convaincre les États de la zone euro.
De la volonté politique, il en faudra à tous les chefs d’État. Macron, européen convaincu dans son discours du 26 septembre à la Sorbonne, écoutera-t-il l’économiste grec quand il lui conseille d’aller jusqu’à menacer de la politique de la chaise vide ?
En tout cas, Macron peut lire Varoufakis. Merkel aussi, elle qui vient de déclarer : « Je ne vais rien exclure ni tracer des lignes rouges. » Varoufakis est devenu un adulte qui assume le clivage en vue d’améliorer la zone euro. Macron-Merkel, pourrez-vous marquer l’histoire en «proposant pour l’Europe autre chose que le doute » ?
(1) Conversations entre adultes. Dans les coulisses secrètes de l‘Europe. Yanis Varoufakis. Éditions les liens qui libèrent. Octobre 2017.
October 28, 2017
Doug Henwood’s review of ‘Adults in the Room’ (Baffler) & a radio discussion between us
Doug Henwood’s long review of my Adults in the Room follows. Plus a radio interview with Doug for BEHIND THE NEWS.
https://www.yanisvaroufakis.eu/wp-content/uploads/2017/10/Behind-the-News-17_10_12-on-Adults-in-the-Room-.mp3
FINANCE MINISTERS RARELY BECOME CELEBRITIES. Sure, there was a moment in the 1990s when Bill Clinton’s treasury secretary Robert Rubin came close. But that was because so many people thought they were getting rich off the dot-com bubble—and Rubin’s fifteen minutes of fame passed once the tech crash took hold.
A notable exception to this rule is former Greek finance minister Yanis Varoufakis, who served the Syriza-led government, and is best known for his efforts to resist International Monetary Fund–mandated austerity measures during Greece’s own economic collapse.
Varoufakis is out with Adults in the Room, a very substantial, well-written memoir of his brief but highly consequential ministerial career. When Varoufakis took office in January 2015, Europe was six years into its debt crisis; Greece, one of the most debt-ravaged partners in the European Union, had already endured several rounds of austerity; it was the most acute in the fraternity of nations on the European periphery known as PIIGS (Portugal, Ireland, Italy, Greece, Spain). These ill-timed reductions in public spending—successive rounds of deep cuts in government budgets in countries already in depression—was supposed to lead to recovery, according to fanciful theories developed by rich people and their hired hands. But in Greece, as in the other PIIGS states, austerity only produced deeper misery. Varoufakis challenged that routine, and was out of office by midyear.
The harsh rallying cry of austerity wasn’t a new refrain on the Greek political scene. Indeed, the long-running, and self-compounding, ordeal of austerity and crisis was what led to the political collapse of the established parties and a victory in the January 2015 elections by Varoufakis’s Syriza party, which is a Greek acronym for a name that translates as “Coalition of the Radical Left.” Founded in the early 2000s as a confederation of left-of-center groups, it turned itself into a unitary party in late 2013—the next year, Greek unemployment hovered around 27 percent, nearly three times its pre-crisis low of 8 percent. Though Syriza’s leader, Alexis Tsipras, had served several terms in parliament, none of its principals could be described as seasoned political pros.
In this era of neoliberalism, Varoufakis’s “modest proposal” seemed almost otherworldly.
Given Greece’s miserable economic condition, the finance minister would inevitably be in the spotlight, and Syriza chose someone well suited to life in the public eye. Varoufakis is an attractive, charming economist, who gets around on a motorcycle, and has a glamorous, aristocratic artist as his wife. His English is not merely fluent but often stylish. That all made for good press, at least at first, but it left him wide open to charges, which came from right, center, and left, of being a showboater and a narcissist. He’d also developed a name for himself as a public critic of orthodox economics and the European authorities’ horrifically inhumane and disastrous management of the crisis. (I should say that I interviewed Varoufakis many times on my radio show, starting in 2008, and like and respect him a lot.) In 2010, Varoufakis published a short paper on his website, co-written with Stuart Holland, offering a “modest proposal” for solving the European debt crisis. It involved the European Central Bank (ECB) financing debt relief for the troubled peripheral states, delivering loan guarantees to support the continent’s ailing banks, and marshalling heavy investment in the infrastructure of the crisis countries. A few decades ago, that would have been seen as a respectable Keynesian prescription for a broad-based economic recovery, but in this era of neoliberalism it seemed almost otherworldly.
In this account, Varoufakis chronicles the high-stakes negotiations around debt relief, and largely bypasses the third point, the need for massive investment in the Euro-periphery—a regrettable omission, since the lack of investment is at the heart of how the crisis came to be. In retrospect, the crisis was the inevitable outcome of bringing twelve countries—later expanded to nineteen—at widely varying levels of economic development into a single currency area. Germany is an economic powerhouse, producing some of the world’s most advanced goods; Greece has many charms, but no Daimler-Benz. (Italy and Spain are somewhere between.) According to IMF stats, Greek per capita GDP was 67 percent of the German level when the initial conversion rates from national currencies to the euro were set in 1998. But enthusiasm that joining the eurozone would magically allow Greece and other peripheral countries to converge to German levels of economic development sent capital pouring into the laggard PIIGS economies. That set off an unsustainable boom; Greek per capita income rose impressively to 80 percent of German levels in 2006. But those gains proved fleeting; the crisis has brought the Greek-to-German GDP ratio back down to 56:100.
As everyone knows, lenders can never be irresponsible.
Despite the quasi-boom of the mid-aughts, Greek economic fundamentals weren’t improving: because of a crummier infrastructure and factories that were no match for Germany’s, the productivity of Greek labor lagged badly even as wages and incomes were rising. Because of these enormous, and often widening, gaps in efficiency, Greece ran chronic trade deficits with Germany and other advanced countries—its goods could compete in neither quality nor price. The government also ran large budget deficits. Those deficits were financed by the inflows of capital I mentioned above, with German, French, and other northern European banks supplying the cash. When the crisis came, bankers and their scribes blamed the problem on corrupt, lazy, and profligate Greeks—because as everyone knows, lenders can never be irresponsible.
In the days before the euro, Greek financial leaders could devalue the country’s currency, the drachma. That move would have made imports more expensive and exports cheaper, which helped put the international books back into balance, and kept cyclical troubles from turning into crises. But once Greece entered the eurozone, that remedy was foreclosed. The inflow of capital stopped, and lenders wanted their money back. GDP fell by 4 percent in 2009—a deep recession in itself—and then contracted by another 24 percent through 2013.
Into this unfolding disaster stepped a crew of technocrats nicknamed the Troika—an unholy trinity consisting of the European Commission (EC), European Central Bank (ECB), and the IMF. The Troika’s lead policy hands prescribed deep cuts to public spending in return for loans. And the proceeds of these loans were not used to alleviate the suffering of Greeks, but to pad the accounts of its creditors: the “bailout” money briefly passed through Greek hands on its way to Frankfurt and Paris. It didn’t “work,” if what you mean by working is turning the depression around. But it worked in the sense of keeping the financial markets from completely imploding, which is what really matters to investors in these crises.
Greece would have to be sacrificed in the name of preventing dissoluteness.
Syriza was elected to put an end to this bloodletting. Unlike many in Syriza, Varoufakis (who was never a member of the party) opposed leaving the eurozone—Greece should never have entered, he thought, but once in, an exit (or “Grexit”) would be catastrophic. It would take too long to create a new currency, and during any such changeover, any Greek with a few euros to spare would whisk them out of the country, making a horrible situation even more horrible. So Varoufakis preferred to negotiate within the eurozone, and even default on Greek debt service payments to bondholders and the IMF. The threat of a bond default was particularly powerful: Letting one particular class of Greek government bonds go into default would have caused the European Central Bank enormous trouble, forcing it to write down the value of other crisis countries’ bonds that it had bought to stabilize things. That would not only hammer its balance sheet, but would cause it immense legal troubles in Germany, where the government and its courts looked askance at the Bank’s efforts to stabilize the financial markets by buying up vast quantities of government bonds across the eurozone. The specter of a spreading default on its massive debt obligations was Greece’s most potent weapon—not that it had many others.
Enter the adults in the room, as Varoufakis calls his eurozone overseers. The finance minister’s efforts to negotiate with the Troika, which he skillfully recounts in substantial and revealing detail here, were essentially pointless. Most of his contact was with something called the Eurogroup, a collective of finance ministers along with the head of the ECB and a few other high-level bureaucrats. The president of the Eurogroup, the Dutch finance minister Jeroen Dijsselbloem, is nominally a social democrat, but in fact an accomplished sadomonetarist. As a member of the secretariat explained to Varoufakis, “[T]he Eurogroup does not exist in law. . . . [T]here are no written rules about the way it conducts its business, and therefore its president is not legally bound.”
In his severely straitened role as a bargaining partner, Varoufakis was allowed to present what were called “non-papers” to the group—position papers with no legal standing—but they were routinely ignored. His economic arguments about the fundamental unpayability of Greek debt, which had a lot in common with those advanced by the IMF, were met with silence. It was, as Varoufakis said, as if he were singing the Swedish national anthem.
The most influential player on the creditors’ side of the negotiations was the German finance minister Wolfgang Schäuble, whose worldview can be captured in a saying he attributed to his grandmother: “benevolence comes before dissoluteness.” Although Schäuble agreed with Varoufakis that the eurozone was unsustainable under present arrangements, he had no time for Varoufakis’s Keynesian proposals. Instead, he wanted “greater discipline. . . . And it will be a much stronger eurozone if it is disciplined by Grexit.” Greece was a bother that had to be expelled.
Why? On paper, one could make the case that Grexit would increase the profits of German business. But such an outcome was far from certain, given the general difficulties of recovering debt in a defaulting national economy; you could more easily argue that by stimulating growth, looser policies could raise profits. But Schäuble was taking a long view. He thought the “overgenerous” European social model had become too expensive and had to be ditched. Even though Greece didn’t have that well-developed a welfare state—its poverty rate was higher than Germany’s and its income distribution was more unequal—Greece would have to be sacrificed in the name of preventing dissoluteness. It would serve as an example, most importantly, to France, whose generous welfare regime he thought needed a severe rethink.
One set of actors clearly deserve more criticism than they’ve gotten: the social democratic parties of the European core.
After five months of pointless negotiations, Greece finally pulled out of the negotiations for substantive debt relief in June 2015. Fearing a run on the banks, the government shut them down. The government put the Eurogroup’s latest offer up for a referendum: accept or reject? The vote, held just a week after it was announced, was sixty-one to thirty-nine to reject. Varoufakis wanted the government to invoke the default option and, should the authorities eject Greece from the eurozone, improvise a new currency through the tax system. But his colleagues had lost their nerve. Ignoring the referendum, they rolled over, agreed to yet another austerity deal, and Varoufakis resigned. Today, Greece still suffers from a massive debt burden. The economy has stopped shrinking, but even all the conventional measures show that it’s a long way from recovery.
It’s a tragic tale, in the ancient Greek sense of tragedy—flaws in personalities and worldviews that lead to what seems like avoidable disaster. Varoufakis has been criticized for weakness and betrayal, which seems deeply unfair after reading this account. His Syriza colleagues—the ones who rolled over and signed up for more austerity—could fairly come under that charge, even though the country held few cards other than the default threat. But one set of actors clearly deserve more criticism than they’ve gotten: the social democratic parties of the European core. The social democrats were part of Angela Merkel’s coalition government in Germany, and were the government in France. Several of the Eurogroup principals, like Dijsselbloem, were nominally social democrats. Yet they did nothing to stop the immiseration of Greece and the other PIIGS. More broadly, they’ve presided over or assented to the ascendance of neoliberalism across Europe, resulting in the steepening economic polarization and poverty that has contributed to the rise of the far right.
Varoufakis, for his part, has moved on to a new project: the “democratization” of the European Union. A central element of his plan would be the election of governments willing to challenge financial orthodoxy through a process he calls “constructive disobedience.” He finds this deliberative approach preferable to busting up the EU and retreating to competitive nationalisms. It’s an admirable goal, but is seems like a long shot. Still, as with the threat of default, it’s hard to see any other option creating meaningful reform in the eurozone, particularly as the forces of the nationalist right continue to gain ground. Aside from supplying a masterful narrative of the Greek debt crisis, Adults in the Room delivers a badly needed case for the revival of a humane internationalism.
Book review of ‘Adults in the Room’ in the Los Angeles Review of Books
By Stan Persky
I.
ONE EVENING in spring 2015, a finance minister walks into a bar in Washington, DC, looking for some insider advice. No, this is not one of those man-walks-into-a-bar-type jokes. On this occasion, the man walking into a bar is Yanis Varoufakis, the then-newly-minted finance minister of virtually bankrupt Greece, and the person with whom he’s having a drink is Larry Summers, one of the American capitol’s real insiders. Indeed, Summers, the former US Secretary of the Treasury in the Bill Clinton administration, former president of Harvard University, and former director of the National Economic Council during President Barack Obama’s first term in office was once a consummate Washington player.
Though the two men, both economists by trade, had fairly different views on fiscal policy — one a self-described “erratic Marxist” and the other often labeled a “neoliberal” — it was a friendly get-together. The veteran insider told the neophyte Greek politician, “There are two kinds of politicians: insiders and outsiders. The outsiders prioritize their freedom to speak their version of the truth. The price of their freedom is that they are ignored by the insiders who make the important decisions.” The insiders, he went on, are obedient to an unbreakable code of conduct: never turn against other insiders and don’t talk to outsiders about what insiders say or do. In return for such fealty, the insiders get access to inside information and a chance to influence people and outcomes. “So, Yanis,” Summers asked, “which of the two are you?”
The full answer to that question is of course Adults in the Room, the memoir in which Varoufakis brilliantly details his brief tenure as Greece’s minister of finance in 2015. (The eponymous pop phrase, in this instance, comes from Christine Lagarde, head of the International Monetary Fund [IMF], who was chastising the “children” in the room, of whom Varoufakis was apparently one.) For the moment, however, Varoufakis keeps it simple, admitting to Summers, “By character I am a natural outsider.” Nonetheless, he adds, he’s willing to behave like an insider if it’ll help get Greece out of its “debt prison.”
The evening ends in a spring rainstorm. “As I saw him to a taxi,” Varoufakis recalls, “the downpour soaked my spring clothes in seconds.” Rather than dismay about the drenching, “I had the opportunity to realize a wild dream of mine […] to walk alone, unnoticed, in the rain.” There will be several more occasions in the coming weeks and months, in Athens and other capitals across Europe, where Varoufakis finds himself in “pristine solitude” on long, often late-at-night walks as a break from the noise of politics and the strange boredom of bureaucratic life.
II.
For those unfamiliar with what happened in Greece nearly three years ago, in 2015, and why it matters (or for those who have simply forgotten, since amnesia is an increasingly common affliction in this era of Donald Trump–inspired hyper-speed news cycles), a brief reprise of the situation may be in order. The financial conditions facing the early 50ish, telegenic Greek economist, who held professorships at both the University of Athens and the University of Texas at Austin, as he contemplated whether or not to enter politics in his Aegean homeland were — to put it mildly — dire.
Of all the countries hit by the global Great Recession of 2008, few were more damaged than Greece, a small, southern European nation of some 10 million inhabitants. In 2015, long after the international fiscal meltdown and the partial recovery of less-devastated economies, Greece was still suffering from 25 percent depression-level unemployment (over 50 percent among young people), a GDP that had shrunk more than a quarter from pre-crash levels, and a third of whose population was living on the edge of or below officially designated poverty lines. Although those are the kind of statistics of distress that cause eyes to glaze over, it’s useful to remind oneself that the abstractions represented real people: senior citizens whose pensions became almost worthless; whole families living on one of those shrinking pensions; the young, deprived of a future and forced to flee the country to look for work and sustenance elsewhere.
The precarious situation obtained despite more-than-250-billion-euro “bailout” loans, ostensibly directed to the Greek economy by the European Union in 2010 and 2012. In reality, the bailout money was used to rescue European banks, mainly in Germany and France, who had made bad loans (which they likely knew in advance were bad loans) to governments in Greece and other struggling economies. The money from the EU bailout loans did not go toward a restoration of the Greek economy, claims to the contrary notwithstanding — a point Varoufakis underscores in his book.
Worse, the bailout was accompanied by five years of an “austerity” program designed to correct the long-standing failings of past notoriously corrupt and incompetent Greek regimes, both conservative and social democratic, as well as national bad habits, such as widespread tax avoidance and local bribery. The austerity program was imposed by a so-called “troika” of EU-associated institutions: the IMF, the European Central Bank (ECB) and the European Commission (which functions as the executive cabinet of the EU), and the program is largely “administered” by the “Eurogroup” of finance ministers of those EU countries that use the multinational currency known as the euro and who comprise the member nations of the “Eurozone.”
The conditions of the loans and the accompanying austerity program were contained in a 2010 “memo of understanding” (MoU). The American Nobel Prize–winning economist Paul Krugman, a widely read columnist for The New York Times and a professor of Economics (currently at City University of New York), described the MoU document as “remarkable […] in the worst way.” The troika, said Krugman, “was peddling an economic fantasy. And the Greek people have been paying the price for those elite delusions.” The plan “assumed that Greece could impose harsh austerity with little effect on growth and employment.” The projections were — again to put it mildly — wrong. “What actually transpired was an economic and human nightmare.” Instead of the Greek recession ending by 2011, as the troika plan predicted, the situation worsened. By the time Varoufakis was being lured into electoral politics in 2015, Greece had “experienced a full-fledged depression,” and was on the verge of negotiating a further bailout, or another “extend-and-pretend” loan, as Varoufakis calls such financial instruments.
Further, despite widespread publicity to the contrary, the fault for the ongoing failure didn’t lie entirely with the Greeks. “I fairly often encounter assertions to the effect that Greece didn’t carry through on its promises, that it failed to deliver the promised spending cuts,” Krugman observed. “Nothing could be further from the truth. In reality, Greece imposed savage cuts in public service, wages of government workers and social benefits.” The claim that “the direct job-destroying effects of spending cuts would be more than made up for by a surge in private sector optimism” proved false.
All of this matters, first and obviously, because of the suffering endured by thousands of Greek families and, more broadly, because the fiscal disaster in Greece was, and remains, a litmus test of the ability of the European Union to actually live up to its ideals in the face of serious crises. Indeed, the future of the EU as the great mid-20th-century utopian vision of a peaceful, prosperous Europe is probably more dependent on its political response to Greece than the far-more-publicized Brexit referendum decision in 2016 that will see the United Kingdom abandon its membership in the European consortium. That, in part, is why Varoufakis’s account of what goes on inside the EU decision-making institutions to which he briefly had intimate access matters so much.
III.
Many people find Varoufakis a sympathetic figure in a landscape of fiscal bean-counters who are often colorless and obtuse. That empathy extends to a somewhat flamboyant personal style in which he’s garbed in T-shirt and chic leather jacket, aboard a motorcycle circumnavigating the roads around Athens’s Acropolis. Admittedly, such a perspective is not shared by everyone. His opponents painted him as an arrogant showboat, and weren’t shy about making their views known to the media; indeed, the smear campaign against Varoufakis personally (as “amateurish,” condescending, bereft of ideas or possessed of bad ones, et cetera) was part and parcel of the EU insistence on carrying out its austerity program in Greece.
How Varoufakis came to find himself running for political office in the pivotal January 2015 Greek parliamentary elections is a crucial part of the story and much of how one reads this memoir hangs on it. He arrived in the Greek electoral forum as a well-traveled academic — educated in England at the universities of Essex and Birmingham, he had teaching stints in the United Kingdom, Australia, and the United States before settling at the University of Athens at the beginning of the century — and he maintained a sideline as a controversial TV pundit and op-ed writer (including a piece for this magazine).
Varoufakis presciently told an economics conference on the Greek budget in December 2006,
Today […] we are threatened by the bubble in American real estate and in the derivatives market […] If this bubble bursts, and it is certain it will […] none of this budget’s figures will have a leg to stand on […] The question is not whether this will happen but how quickly it will result in our next Great Depression.
Since a couple of Varoufakis’s fellow panelists were former finance ministers who took the line that Greece was somehow impervious to such dangers, their brash colleague’s Cassandra-style warnings were seen as somehow unpatriotic, thus initiating accusations against Varoufakis as a “national traitor” — that is, when he wasn’t simply being treated as “an inconvenient fool.” In the event, the bubble did burst, Greece was not impervious to the storm, and a virtual tsunami of economic disaster rolled out of the Aegean Sea.
Varoufakis’s anticipation of the financial catastrophe led to frequent public appearances as a popular TV commentator on economics and an occasional speechwriter and advisor to the social democratic George Papandreou government of 2009–’11, during the Greek debt crisis. It was Varoufakis’s public admonitions to the Greek government not to seek bailout loans to avert bankruptcy that produced titillating European headlines to the effect that “Former Greek PM adviser says Greece is bankrupt.” Again, this unpopular anticipation of the facts was viewed as a lack of patriotism; eventually, the disobedient economist was blacklisted from both state and private TV channels, almost all of which are controlled by the Greek oligarchy. There was also a serious death-threat phone call made against Varoufakis and his wife Danae’s teenage son — the economist cites it as one of the reasons he and his family took up residence at the University of Texas in the years preceding the 2015 Greek elections.
Unsurprisingly, Varoufakis was also an early opponent of “austerity” programs as a cure for economic depression. He saw their imposition as not so much an economic policy as a moralistic injunction with practical consequences. As he says in Adults in the Room,
Austerity is an awful economic policy that […] is guaranteed to fail in bad times. But austerity is not really an economic policy at all. Austerity is a morality play pressed into the service of legitimizing cynical wealth transfers from the have-nots to the haves during times of crisis, in which debtors are sinners who must be made to pay for their misdeeds.
It was this wide range of public and academic activities that made Varoufakis attractive to the Syriza Party, and its mid-30ish leader, Alexis Tsipras. The leftist party (itself a coalition of various Greek political factions) was in the process of becoming a significant player in Greek politics, circa 2012, when Nikos Pappas, Tsipras’s chief of staff and an economist himself, brought Tsipras and Varoufakis together. Although Varoufakis initially found the “young prince” of Greek politics distracted by internal feuds within Syriza and insufficiently focused on the crucial economic questions, he gradually warmed to Tsipras, discovering him to be a quick study once he set his mind to the issues at hand.
By late 2014, correctly anticipating early elections sometime the following year, what Varoufakis had to offer the Syriza leadership, as a non-party advisor to Tsipras and his chief of staff, Pappas, was both a strategy for negotiations with the EU, and specific proposals for those negotiations. The plan was aimed at getting Greece off the hamster-cage treadmill on which it had been placed by the EU bailouts and austerity program. Both the strategy and the practical proposals to resolve Greece’s dilemma are key to a reading of his memoir.
In terms of how to negotiate with the EU, Varoufakis insisted on absolute good-faith negotiations that included a specific but politically moderate plan to “restructure” Greece’s massive debt, and to ameliorate the austerity program in the name of what Syriza called the “humanitarian crisis.” So, for instance, Varoufakis was not suggesting a blanket write-off or “haircut” of the debt, but rather a very long-term repayment plan tied to Greek economic recovery and growth-rate percentages. At the same time, the overarching idea was to commit to continued membership in the EU and the Eurozone. In contrast to Syriza’s internal left caucus, Varoufakis opposed the idea of making an exit from the Eurozone (a “Grexit”) a campaign goal and, equally, he opposed those within the Greek political establishment who wanted to further extend the bailout in return for accepting a continuation of what Varoufakis called the “fiscal waterboarding” of the EU austerity program. Instead, Varoufakis offered a more sophisticated strategy. If, in the end, the EU refused to modify the terms of the debt and austerity deal, then, rather than bluffing or accepting a continuation of the situation in return for a third bailout loan, the Greek government should be prepared to take the Grexit route out of the Eurozone, while remaining in the EU.
This strategic approach entailed two practical plans. The first had to do with Greece’s proposals during negotiations with the EU, and the second involved what to do if negotiations failed and Greece returned to a devalued national currency, the drachma. Varoufakis had been working on all aspects of his approach in concert with various other economists during his time at the University of Texas at Austin, principally with Jamie Galbraith, the son of the renowned economist John Kenneth Galbraith and, like his father, a proponent of Keynesian strategies for depression recovery. The only question for Varoufakis was whether Alexis Tsipras would be willing to commit to such a strategy in the face of internal opposition from Syriza’s Left Platform, as it was known, and from the right in the form of powerful bureaucrats, bankers, and the EU insiders themselves.
Varoufakis had expected that he might be asked to lend a hand to a Syriza government’s negotiations. Instead, Tsipras not only accepted Varoufakis’s strategic proposals, but offered the economist the key post of finance minister should Syriza win the election, which had been pushed forward to the end of January 2015. Rather than being parachuted into the position, Varoufakis insisted on running for a parliamentary seat and, more importantly, persuaded himself that Tsipras and his team would stand by the admittedly precarious plan Varoufakis had devised and that they had received with such preliminary enthusiasm.
This initial agreement within Tsipras’s inner circle raises a host of questions that can’t be resolved here, but which should at least be broached. How realistic was it to enter the fray with even faint hopes that the EU was prepared to substantially restructure the deal, or that it would do so once it saw that Tsipras and Varoufakis were serious about Grexit? If it was possible to anticipate the EU’s intransigent stance on maintaining “austerity,” as would quickly become apparent, wouldn’t it have made as much sense to simply invest one’s energies in a Grexit from the Eurozone as Syriza’s Left Platform had called for from the start?
Second, how plausible was Varoufakis’s package of proposals for a restructured deal? In a sense, that’s an argument best left to economists, but leaving aside the question of whether arguments left to economists ever come out well, minimally we can note that Varoufakis’s ideas made sense to a raft of professionals in the field, including Galbraith, Jeffrey Sachs, Joseph Stiglitz, and Paul Krugman. As well, Varoufakis’s arguments were sympathetically received by people like Larry Summers, Britain’s former Tory Chancellor of the Exchequer Norman Lamont, and such political figures as US Senator Bernie Sanders, and an obscure, youthful, appointed economic minister in France named Emmanuel Macron. Finally, wasn’t Varoufakis being wilfully naïve in expecting to retain Tsipras’s political loyalty through thick and thin — and, more important, through the magical “spell,” as Varoufakis calls it, of German Chancellor Angela Merkel, and her finance minister, the influential Wolfgang Schäuble?
In the event, Syriza scored a landslide victory in the Greek elections of January 25, 2015, securing a near majority of 149 out of 300 seats (Varoufakis himself led the polls among MPs elected), and quickly concluded a deal for a majority coalition with a small, right-wing, but anti-austerity party. In jam-packed celebrations in Syntagma Square, the Athenian forum facing the Greek parliament, it was a night for the ages. Paul Krugman (in the column cited above, published the morning after the election) called it a “political earthquake in Greece” that had produced the first European government “elected on an explicit promise to challenge the austerity policies that have prevailed since 2010.” On the morning after the historic electoral night, Varoufakis was with Tsipras in the PM’s new office, lightly joking about their abruptly changed circumstances, before heading over to his own ministry.
“When our eyes met […] Alexis had acquired a serious look, which he followed up with serious words,” Varoufakis recalled. Tsipras told his finance minister,
Listen! Don’t get comfortable in here. Don’t learn to love the trappings of office. These offices, these chairs, are not for us. Our place is out there, on the streets […] And be ready. If the bastards find a way to stop us […] you and I must be ready to hand back the keys and get out on the streets again, to plan the next demonstration.
It was a moment to savor, Varoufakis recognizes. “I felt ashamed at the qualms I had had about Alexis […] I did not care if the light died, as it inevitably would. Here we were, together, raging against its dying.”
IV.
A few minutes after that poignant moment with the new prime minister, Varoufakis took one of his solitary walks — alone except for a few press stragglers, who were befuddled by a minister on foot, unaccompanied by security — over to the finance ministry from which he would preside, looking out a window onto Syntagma Square and across to the seat of Greek government.
As the new minister sat in his office that evening, after talking to his wife who was in Austin clearing out their Texas apartment, the first official call from the United States came from, of all people, the socialist US senator from Vermont. Bernie Sanders wanted to know if there was anything he could do to support the new Greek government. He was just about to write a letter to Christine Lagarde, the IMF head, and wondered if there was something in particular that Varoufakis wanted him to say. It was, if nothing else, a much appreciated gesture of solidarity from a populist leftist who would be running for the US 2016 presidential nomination within a few months, and who would turn out to be an unexpectedly strong candidate for the Democratic Party nomination (although, in the end, he would be edged out by Hillary Clinton).
Sanders’s greetings were soon followed by an invitation to meet the US Secretary of the Treasury Jack Lew, an offer from renowned Columbia University Economics professor Jeffrey Sachs to more or less join Varoufakis’s team (an offer that was accepted), and even some kind words for Greece from then-US President Obama. Since the Americans wielded considerable influence within the IMF, these first contacts were a hopeful sign.
And thus Varoufakis, the “many-minded” Greek voyager (to recall an appropriate Homeric epithet) set off on an odyssey that would take him not only to magic isles with spell-casting sibyls and caves occupied by cyclopian monsters, but also to relatively sterile committee rooms, government offices, and the labyrinths of Brussels’s EU bureaucracy. I needn’t recount each and every meeting or cliff-hanger moment in the ensuing fiscal negotiations. Anyway, Varoufakis himself does a surprisingly entertaining job of telling the story of the next six months of polite confrontation. Usually, books that are this heavily invested in financial minutiae don’t exactly keep you up at night, but Varoufakis’s account has the narrative drive of a rollicking detective novel. Election euphoria was quickly succeeded by the sobriety of Varoufakis’s first visitor, Jeroen Dijsselbloem, Dutch finance minister and president of the Eurogroup of finance ministers from Eurozone countries. There were the usual public pleasantries, and then the two retired behind the famous “closed doors.” One of the principal virtues of Varoufakis’s book is that it takes us behind those doors and tells us exactly what was said and done there.
“What are your intentions for the Greek programme? Are you planning to complete it?” Dijsselbloem asked. Varoufakis repeated what he had told the Dutch minister on the phone a couple days earlier, namely, that the new Greek government recognized that it had inherited “certain commitments to the Eurogroup while at the same time trusted that its partners would recognize in return that it had been elected only a few days before in order to renegotiate key elements of this programme.” Only a few days before, on the phone, Dijsselbloem had responded to the same remarks, “This is very good.” This time the Eurogroup head aggressively declared, “This will not work!”
After a few more minutes of fencing, “Jeroen told me, his voice dripping with condescension, ‘The current programme must be completed or there is nothing else!’” In short, if the troika’s austerity dictates were not obeyed, Greece’s banks would be shut down, negotiations would be terminated, and Grexit would be imposed. It was the maximum hard line. At the closing pro forma press conference with the two finance ministers, Dijsselbloem more or less stormed off stage, barely pausing for the ritual departing handshake photo-op.
Unfortunately, over the next six months, there was not much improvement in relations between Varoufakis and any of the establishment colleagues with whom he ostensibly negotiated. Instead, Varoufakis provides incisive portraits of the EU insiders, and a lot of the insider conversation and gossip. As Varoufakis tours the European capitals, the major players perform their cameos, usually accompanied by promises upon which they fail to deliver. EU Commissioner Pierre Moscovici, a former French finance minister, offers support privately, but in public his well wishes are unceremoniously squashed by Dijsselbloem. Poul Thomsen, the Danish IMF technocrat in charge of Greek and Portuguese programs, at one point not only sympathizes with Varoufakis on everything from the Syriza agenda to ideas about debt swaps, but insists, “This is fine. But it is not enough. We need an immediate annulment of part of your debt. No swaps, no delays. Just take €53 billion and erase it.” Varoufakis thought, as a very old cinematic cliché has it, that he was dreaming in Technicolor.
Almost needless to say, it all comes to nothing, even though we get to meet the British Chancellor of the Exchequer George Osborne; the head of the European Central Bank, Mario Draghi; and perhaps most important of all, Wolfgang Schäuble. There are a couple of delays or time extensions, but nothing substantive is accomplished. The troika continues to insist on its austerity program in return for a further bailout loan to pay off the previous unpaid loans.
Varoufakis and his team had put together serious proposals, vetted them among Wall Street and London financiers, and then presented them to Greece’s creditors. “Then I would sit back and observe a landscape of blank stares. It was as if I had not spoken, as if there was no document in front of them,” reports Varoufakis. “Their responses, when they came, took no account of anything I had said. I might as well have been singing the Swedish national anthem. It would have made no difference.”
Near the end, Varoufakis went to the German finance minister for insider advice — the sort of thing Larry Summers once offered to Varoufakis over a drink in a Washington, DC bar. “Will you do me a favour, Wolfgang?” Varoufakis asked Schäuble, who is often depicted as the villain of the piece, since he is in many ways the architect of the austerity scheme, and at one point even toyed with a plan for the “temporary exit” of Greece from the Eurozone. “You have been doing this for forty years,” said Varoufakis. “I have only been doing it for five months […] I want to ask you for your advice. Not to tell me what to do. To advise me instead.”
When the elder German statesman assented, Varoufakis asked him, “Would you sign the [Memo of Understanding] if you were in my place?” That is, would you agree to the troika’s plan for further austerity and extended unpayable loans? He expected Schäuble to tell him that, under the circumstances, there was no alternative. “Instead, he looked out of the window. By Berlin standards, it was a hot and sunny day. Then he turned and stunned me with his answer: ‘As a patriot, no. It’s bad for your people.’” Varoufakis adds,
As I departed that day, I was not leaving behind me a Machiavellian dictator. I was leaving behind a sunken heart, a man ostensibly more powerful than almost anyone in Europe who nevertheless felt utterly powerless to do what he knew was right. As the great tragedians have taught us, nothing causes greater wretchedness than the combination of supreme authority and wholesale powerlessness.
Meanwhile, back home, and to make matters worse, Varoufakis gradually lost the confidence of the inner cabinet in the incessant internal struggle between factions within the government. Most important of all, Tsipras cracked. This was a crack that, contrary to poet Leonard Cohen’s famous line, did not function to let in the light. There will be historical controversy over what happened, and since Tsipras is still in office as of this writing, we won’t really know for a while. Maybe Tsipras was gradually worn down by Angela Merkel and the other powers of Europe; maybe he was never as fully committed to resistance as he appeared to be. At some point, however, he accepted that Greece would bow to the will of the troika and sign on the dotted line.
The denouement in late June 2015 was painful and confusing, but relatively swift. In the end, there was a last meeting of everybody — commissions, Eurogroups, and EU government leaders — in Brussels. There was a final private conversation between Varoufakis and Schäuble, as bittersweet as the one described above, during an intermission in Varoufakis’s last Eurogroup meeting. There was a final intransigent “offer” from the EU, delivered by Dijsselbloem. Contrary to appearances, rather than admitting his submission, Tsipras and his team flew back to Athens and announced a Greek referendum for July 5, asking a straightforward question of the Greek people. Should Greece say yes to the EU’s latest proposal package or should it say no? Varoufakis asked the relevant question, “Are we calling this referendum to win it or lose it?” One of Tsipras’s minions replied, “We need an emergency exit.”
I vividly remember the night of the referendum, having watched it on TV from Berlin. A heat wave had engulfed the German capital and much of Europe for days. A couple of hours before midnight, the TV announced the referendum vote count. To everybody’s surprise — the pollsters had said the outcome would be too close to call — the Greeks voted an overwhelming 61 percent against accepting the EU plan. The booming “No!” echoed across the continent. Varoufakis had campaigned heroically in favor of the No vote; he’d promised that if the Greeks voted to accept the EU proposal he would do the honorable thing and resign immediately (a pledge notably not made by Tsipras or any of the other cabinet ministers); and Varoufakis was surprised as the rest of us by the results. He had fully expected the vote would be to accept the EU plan. When the actual outcome was announced, he was stunned but exultant.
In Syntagma Square, thousands of citizens celebrated the unambiguous act of resistance. It was a modern, momentary, flash-mob version of the historic and legendary “glory that was Greece.” That evening, as living room TVs, computer, and smartphone screens showed jubilant Greek crowds in the square in Athens, a magnificent storm burst over Berlin. There was lightning, thunder, wind whipping the courtyard trees, and a deluge of rain falling through the darkness, as people stood on their balconies in summer shorts (and less) to get a taste of the relief. It felt like an ecstatic pagan moment, Zeus unleashing a populist thunderbolt to rend the heavens.
It was tempting to welcome the stormy weather in Berlin as a romantic metaphor for what was happening in Athens to the south. But in real unromantic life, the weather quickly returned to the usual ups and downs, and people like Varoufakis knew that the thunderbolts merely presaged a Pyrrhic victory. Though he had announced he would resign if the people accepted the EU scheme, what he hadn’t announced was that he would also resign even if the people rejected austerity, given that he had lost the confidence of Tsipras and the cabinet. Of course, there were last-ditch meetings with Tsipras, and alternative cabinet offers, but all this was empty, melancholy ritual. When Varoufakis got home in the middle of the night and reprised the events of the evening with his wife, he concluded, “Tonight we had the curious phenomenon of a government overthrowing its people.”
By dawn, Varoufakis had ended his career as finance minister of Greece. In due course, he rode off on his motorcycle on the winding roads around the Acropolis and toward the Parthenon. A successor, Varoufakis’s friend Euclid Tsakalotos, was appointed; the troika deal was obediently accepted (with both the prime minister and the new finance minister publicly admitting it was a bad deal); and Varoufakis, now an ordinary member of parliament, joined about three dozen Syriza colleagues to vote against the government. Since the official opposition supported the acceptance of the EU plan, the bill passed. A few months later, in September, Tsipras called an early snap election to deal with the internal Syriza rifts, and was handily reelected. Varoufakis did not stand for reelection.
V.
What came next, after the period on which Varoufakis’s memoir focuses, was a muddled two-year continuation of the dispirited negotiations that had characterized the Athenian economist’s tour of duty. Varoufakis tells an unexpectedly riveting story, about the nature of power, the ins and out of navigating through Europe’s “deep Establishment,” and of the thwarted but hopeful moments of attempting to recover a sense of national dignity. It’s a story with no shortage of villains emerging from the poisoned ideology behind economic austerity, from the rather mean-minded Dijsselbloem to a corps of technocrats, both from the EU institutions as well as from inside the sporadically disloyal Greek bureaucracy. Wolfgang Schäuble was often cast in the media as the über-villain of the piece. But Varoufakis’s book illustrates, vividly, that Schäuble was more interesting than the caricatures, a real person caught up in the tragedy of a compromised and morally bankrupt system that perpetuated the Greek depression and its human crisis.
A year after Varoufakis’s resignation, in July 2016, an unusual report appeared in the business pages of the conservative British paper, The Telegraph, that received almost no public attention outside select professional circles. The findings came from the IMF’s Independent Evaluation Office, which reports not to managing director Christine Lagarde but directly to the IMF’s board of directors. Its “lacerating verdict” charged that the fund’s “top staff misled their own board, made a series of calamitous misjudgments in Greece […] ignored warning signs of impending crisis” and much more. For our purposes, the crucial finding is that Lagarde and the IMF knew that the Greek bailouts and austerity wouldn’t work, that it would only benefit the European creditor banks and immiserate the Greek people.
Despite knowing they were pursuing a policy set for failure, Lagarde and the IMF staff persevered, in order to avoid risks to their own credibility. “The injustice is that the cost of the bailouts was switched to ordinary Greek citizens — the least able to support the burden,” said The Telegraph, “and it was never acknowledged that the true motive of EU-IMF Troika policy was to protect monetary union. Indeed, the Greeks were repeatedly blamed for failures that stemmed from the policy itself. This unfairness — the root of so much bitterness in Greece — is finally recognised in the report.” Since Varoufakis will inevitably be blamed for merely telling “his side of the story,” this independent assessment stands as confirmation of his major claims in Adults in the Room — a vindication of his credibility, however bittersweet.
In June 2017, another full year on, the press at last reported, “Greece reaches a deal over bailout funds.” After a long period of muddling and bickering, the European finance ministers agreed on a deal to unlock further funds to meet further debt repayments due that summer. As one on-the-scene analyst put it, “Yes, Greece is being lent more money so it can pay older loans back.” Varoufakis, who had moved on to organizing a Democracy in Europe Movement (DiEM), was suitably scornful. The troika has again imposed upon Athens, he said on his website, “an ‘agreement’ according to which the troika will re-pay to itself a part of Greece’s unpayable debt.” He added, “In truly Orwellian form, the Eurogroup has exercised again, and with no compunction, its unique capacity for truth inversion.”
A month after that, in late July 2017, the Guardian’s Athens correspondent conducted a lengthy “exclusive” interview with the now-43-year-old Greek prime minister. “The worst is clearly behind us,” Alexis Tsipras declared. “We can now say with certainty that the economy is on the up […] Slow, slowly, what nobody believed could happen, will happen. We will extract the country from the crisis […] and in the end that will be judged.”
He pointed to nascent signs of recovery. Although more than a million Greeks, or 21.7 percent of workers, were still unemployed, that was down from 27.9 percent in 2014. Among Tsipras’s goals is a further 10 percent drop in employment, but that is “in the next five years,” the article reported. Some Greek bonds would soon be back on the market, and credit ratings agencies were about to upgrade the country’s status. “I have made mistakes […] big mistakes,” Tsipras readily admitted, adding that maybe his biggest initial blunder was “the choice of people in key posts.” Asked if he was referring to his former finance minister, Tsipras politely denied it, claiming that Varoufakis was the right pick for the early strategy of “collision politics,” but allowed that Varoufakis’s drastic Plan B for a possible Grexit was “so vague it wasn’t worth talking about.” Nonetheless, Tsipras had paid the price for his U-turn of acquiescing to neoliberal austerity policies: his own ratings had nosedived, reported the article, citing polls that show Syriza trailing by as much as 16 points, and that its charismatic leader was widely regarded as having lied.
Interestingly, the same Guardian reporter, Helena Smith, returned to Athens the following week to get the “view from the street,” as if, perhaps, she had passed on a bit too much government spin. One volunteer food bank worker, responding to Tsipras’s “the worst is clearly behind us” line, replied, “Politicians clearly have no idea of the reality on the ground. If they did, they wouldn’t make such pronouncements because, really, it couldn’t be worse.” Other interviewees said much the same. “Greeks can’t see any light at the end of any tunnel,” an elderly small businesswoman told the journalist. A director of a research institute predicted there would almost certainly be a need for a “new financial credit line, a bailout lite, and that would come with new, additional conditions.” More than two years after Varoufakis’s departure from office, the prospects seem, at best, “mixed.”
When Adults in the Room was published in England last spring, Paul Mason, the Labour Party activist and author of Postcapitalism: A Guide to Our Future (2015) declared in the Guardian: “Varoufakis has written one of the greatest political memoirs of all time.” Be that as it may, Varoufakis’s book is very good, very readable, and ought to be on all the important “notable books of the year” lists. But the book’s success is not what worries me. I’m concerned that not enough people will be inclined to pay attention to the story of an obscure economist who briefly served as a government official in a small, bankrupt country in southern Europe — a country that all of the powers of the European Union refused to rescue from a decade of human misery.
¤
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