Yanis Varoufakis's Blog, page 64

The pandemic’s impact on Europe – Behind the News, with Doug Henwood

On Dutch FinMin, the Eurogroup, its President, the euro, DiEM25 and MeRA25 – Interviewed by TSF Radio Noticias

 




The Eurogroup approved a 500 billion package to fight the crisis. You recently wrote in the Guardian that The EU’s coronavirus relief deal is a gift to Europe’s enemies. Explain.



To begin with, the 500 billion euros is almost entirely loans. It’s exactly what Europe doesn’t need, especially like the countries that were hit the hardest, like Italy or Spain or Greece, which have the least capacity to have the necessary increase in public debt.
The reason why the eurobonds – that nine countries, including Greece and Portugal, demanded – are essential is because it constitutes a debt restructuring, so that debt does not go to the nations, it is spread out across Europe. By being spread out, its total net present value shrinks over the next 20 years and therefore it’s far more manageable.
By rejecting the eurobonds, and instead saying “take money from the European Stability Mechanism” – and that’s loans – or from the markets, supported by the European Central Bank, countries like Greece or Portugal are going to be so heavily indebted by this time next year that even there is no preconditions for those loans, the return of the fiscal compact next year will mean levels of austerity for a very large part of Europe, even worse than the one Greece experienced in 2011. As the European economy begins to emerge from the coronavirus recession, we will be hit by a secondary recessionary wave that will be imposed by Brussels, by Frankfurt.

Make no mistake: they will demand fiscal consolidation

We can already hear from Germany talking about coming back to Black Zero [a rule that determines a debt brake by imposing a balance between expenditure and receipts] next year. Make no mistake: they will demand fiscal consolidation for Portugal, for Greece, for Italy, for Spain next year. There can be no better gift to the euro skeptics and to the nationalists that want to destroy the European Union than that.
But where is the main problem? Is it the solution’s nature or amount? Germany’s own relief package is bigger than Europe’s.
It’s both. It’s the total size and the distribution.
The total size of direct fiscal injections agreed on the Eurogroup is pitiful. The rest of the world is laughing at Europe, and rightfully so. It’s only 0,22% of the euro area GDP. The rest is loans, and loans are useless. If you have a bankruptcy problem, you can not deal with it by additional loans, and what we are facing now is a bankruptcy problem as a result of the lock down for so many weeks and months.

April 9th 2020: The Eurogroup led by Mario Centeno approved a 500 billion relief package to fight the pandemic consequences

© Patrícia de Melo Moreira/EPA

Germany, because of its fiscal space, is affecting a 6% stimulus of direct fiscal injections, not loans. In the case of Portugal and Greece, it’s around 0,9%. This is going to magnify ridiculously imbalances that area already a problem in the eurozone, to such an extent that the politics, specially in come southern countries like Italy, for instance, will become toxic and I just don’t see that the eurozone can survive this second wave in the same error category that we made in 2010 when it treated our countries’ problems, which were insolvency, like something that can be dealt with by means of loans.
Do you think, in the long term, countries that are now opposed to eurobonds will have no other option but to accept this solution?
I can’t see how. We have a symmetric stretch to our peoples, whether you’re german or french or portuguese or greek. If this crisis has not changed the mind of the ruling classes in Germany, the Netherlands, Finland and Austria and so on, persuading them that this is a time for Euro bonds, for unification rather than “everyone by themselves”, I can’t see why they would change their minds in the future. This is why I think April 9th is going to be remembered as the moment when the disintegration of the European Union and the monetary union in particular has begun.
How do you classify Mario Centeno’s role as Eurogroup’s president?
One word: shameful. Mr. Centeno’s head should hang in shame for having brokered this non deal. If this was not a tragic situation it would come down as a joke. Mr. Centeno comes from a country that knows the pain of austerity, that knows the euro area never dealt rationally with the major crisis of 2010 and 2011. Mr. Centeno had the moral and political duty to the people of Portugal and Europe not to repeat the performances of Mr. Junker or Mr. Dijsselbloem when they were presidents of the Eurogroup. I’m afraid he’s going to go down in history as a shameful president of the Eurogroup, just like his predecessors.
The dutch finance minister suggested Italy and Spain should be investigated for not having money to deal with this crisis, and he later apologized after Portugal’s prime minister said these words were disgusting. Does the word solidarity still mean anything in Europe?
No. It doesn’t. I remember the bailouts given to Portugal and Greece were disguised as solidarity. Yes they were solidary with Deutsche Bank, Societé Generale, because the money that went to our treasuries and ended up repaying debts to french and german banks that placed so many debt in the United States in 2008 that they were insolvent.
But I am afraid we are making a big mistake, as greeks, as portuguese, even as germans. It is not a case of solidarity. We should not be asking the dutch minister for solidarity. If you ask a dutch citizen for solidarity, they have a right to reject it. They can say “I want to be solidary, I’ll give you a gift or a loan, but you can’t ask me to go into debt jointly with you”. And they have a point about that.

The dutch finance minister is right. He does not have an obligation, for the purpose of solidarity, to agree to eurobonds

The dutch finance minister is right on this. He does not have an obligation, for the purpose of solidarity, to agree to eurobonds. But he has the obligation to accept eurobonds because it is the only sensible financial policy which is also in the interest of Holland.
What the dutch and the german and austrian and finnish finance ministers must be made to understand is that the reason why their finances are so much better than Portugal’s or Greece’s or Spain’s is because they have been experiencing negative interest rates for the last eight years so their debt has been coming down even though they didn’t have to do anything.
Their net exports to China, The United States or the United Kingdom were held at a high level because the euro was relatively low. And it was low because in the euro area you had the deficit countries: Portugal, Spain, Italy, Greece. Their savings and surpluses are due to they being in the same area as the deficit countries. They can’t say this was only their own doing and therefore it’s their money and will not go into common debt. If they want the benefit of the euro, they will have to have the eurobond. If they are clever in their selfishness, they should want the eurobond. We southerners should not appeal to their solidarity or philanthropic instincts. We should appeal to their common sense.
Can this crisis lead to the end of the eurozone?
There’s not doubt it will, if we continue down this road. Italy is going to have to borrow huge quantities of money, and there will be a GDP collapse of at least 10%. The debt to GDP ratio will go up to 180% or more very soon. The deficit will be gigantic: 15%, maybe 20%. Brussels will next year say: “You will have to go from, let’s say, 18% to 7%”. That’s a 11% GDP austerity program. Any government that implements an 11% austerity program will be out very soon. Matteo Salvini is going to ride into government and I can assure you the first thing he will do is a plan for the exit of Italy from the Euro. When Italy is out, we’re all out.

Yanis Varoufakis in 2015

© Fernando Fontes/Global Imagens

Some human rights groups are alerting to a dangerous situation in the greek refugee camps. Is Europe and the greek government doing enough to make sure a disaster does not happen in these camps because of the coronavirus?
The greek government has been despicable. They have been treating refugees as non-humans. They have done absolutely nothing to provide them with livable conditions. Our party, MeRA25, which I represent in the parliament, has been demanding from day one that they are relocated. We have so many empty hotels, because there is no tourism. Break up those camps and relocate those families in empty hotel rooms, pay something to the hotels, so they make some money. Everybody would be better off. The government has done something horrific: they shut the camps down, without any medical facilities in it. Even without the coronavirus they were dying of the terrible conditions they are living there. Throw in Covid-19 and it’s a catastrophe.
The IMF predicts a heavy recession in all the euro zone. Are we in for a long term recession?
There’s no doubt the disgraceful Eurogroup that Mr. Centeno presided over has condemned the euro zone to be the sick economic block of the world. China, the United States and the United Kingdom will have a much faster recovery. The lack of a fiscal boost in the euro zone will guarantee we will exit this crisis with our economies much weaker and the imbalances between north and south countries far worse.
You founded the Democracy in Europe Movement (DiEM25) and the greek political section MeRA25. The 2025 reference is about the movement hoping to democratize Europe by 20205. Do you maintain this goal?
We never hoped we would. It was a very different question we asked ourselves back in 2015. The question was: how long do we have to democratize Europe before the point of no return. A little like in climate change. When will Europe find itself in a situation where internal imbalances and centrifugal forces are such that we can’t unite? And we said 10 years, and decided to call our movement DiEM25. The coronavirus is proving this to be over optimistic. If we don’t unite now, when we face with a symmetric threat, if we can’t understand now that we are in this boat together… and it’s not a question of solidarity, it’s a question of rationality.
What are your political objectives with MeRA25?
The objective is one: to end the neverending bankruptcy of Greece. We have bankrupt banks, a bankrupt State, bankrupt families and bankrupt businesses. And as long as we keep pretending we can overcome this through loans, we will simply perpetuate the bankruptcy. Our young will leave the country, and that’s the greatest nightmare: we will end up with a country full of old people, many of them foreigners living here in beautiful five star apartments in privatized beaches in this beautiful country, with our young living in the United States, in Canada, in China or India.

I should have given them an ultimatum: “a restructure of debt, or we are out of the euro today

When will we win? That will depend on our capacity to convince the people of Greece against an armclad media system that belongs to the oligarchy. Our little party is struggling, but we are positive, we entered parliament in our first attempt, and our message is getting across despite the demonization we are experiencing.
You leaked the recordings of the Eurogroup meetings in 2015. Don’t you think this could lead to further distrust between countries?
Quite the opposite. The argument that the people are not clever enough is an argument against democracy, and for fascism. Look at the April 9th Eurogroup. Important decisions were made in there that condemn Europe to more recession, austerity and pain for the majority of Europeans. I believe portuguese citizens have every right to know what Mr. Centeno said in there on their behalf. The german voters should know what their finance minister said. If you keep treating people as incapable as dealing with information that concerns their lives, what you are saying is “We don’t want a democracy. We want an oligarchy with occasional elections where people go to the polls without information of what their representatives are doing behind closed doors”.
Looking back at the time you were Greece’s finance minister, do you regret anything? Would you have done anything differently?
Oh, of course. Anybody who doesn’t rethink what they’ve done with new information is a dangerous fanatic.
I would have done many things differently. But the question is: what would I have done differently with the information I had at the time? And I think I should have been far less conciliatory to the troika. I should have been far tougher. I should not have sought an interim agreement. I should have given them an ultimatum: “a restructure of debt, or we are out of the euro today”.
Yanis Varoufakis became an international household name in 2015, when he took the job of finance minister in Greece, in a Syriza government led by Alexis Tsipras. For six months he confronted Brussels and the troika, demanding a restructuring of his country’s debt.
He left the government after disagreements with the prime minister the day after a referendum to decide the acceptance of a new set of troika austerity measures gave the “No” a 60% win. Athens didn’t put this result into practice.
He is now a MP for the Hellenic Parliament under his MeRA25 party, the Greek political section of the Democracy in Europe Movement (DiEM25) he founded.
Earlier this year, he leaked Eurogroup audio recordings of the meetings he participated in as Greece’s finance minister.

For the TSF-Radio Noticias site see this

On Italy & the EU after the Eurogroup of 9th April – fanpage.it (English version)

The debate about the economic consequences of the Coronavirus pandemic has already begun: what do you think is easier to happen? Will it be a momentary crisis or a crisis destined to change our economic system forever?
Neither. The consequences will be harsh and will not disappear any time soon. But, it will not, on its own, change the way capitalism works – even though, it is true, commentators revisit important policy changes, e.g. Universal Basic Income.
We must not forget that in times of crisis all sorts of progressive ideas are floated. For example, in 2009 the G20 even discussed the prospect of rejigging global finance in a manner that reflecting John Maynard Keynes’ splendid proposal for an International Clearing Union. Today, under lockdown, we have had a revival ‘helicopter money’ as a possible source of funding a Universal Basic Income. But, as in 2009 so too now, ideas that are not immediately enacted will be allowed to fade as the oligarchy-without-borders recovers and regains full control of the public debate. So, no, I do not think that these progressive ideas will be implemented by our present rulers. But, there is hope that they will be implemented once this huge new turn of the post-2008 crisis creates new political movements that can, potentially, take over from the current establishment. It may not be hugely likely but it seems to me the only path to something genuinely progressive.
A year after the reopening, what world will we find ourselves in? Will it be a more or less unequal world, a more or less free world, more or less aware of environmental issues, more or less open?
The world will be an unhappier and a much more divided place. In Europe countries that were hit less both by Covid-19 and by economic depression will emerge much stronger relative to countries like Italy. So, on the one hand, Europe will emerge weaker as a whole, the imbalances undermining the Union will emerge hugely reinforced.
Do you think there is a privacy and surveillance issue that arises in Europe?
We had these issues before the pandemic hit. These concerns will grow further. When you give rulers a taste of great power to know, and to control, what citizens do it is hard to end their addiction. This is why DiEM25 is well placed to combat these encroachments into our civil liberties: Because, from 2016, we started thinking about transparency, Europe’s technological sovereignty and ways to democratise data.
Yesterday there was the Eurogroup in which the measures were taken to stem the post-pandemic crisis in Europe: what do you think of these measures?
They will go down in history as a major defeat for Europe and proof that the Eurozone’s managers are unable to contribute to Europe’s shared prosperity. In contrast to the US, the UK and Japan where 6% of total income was injected into the economy as direct funds and debt write-offs, the Eurozone’s decision involved a pitiful 0.22% of pure injections, the rest being irrelevant loans. Our finance ministers should hang their heads in shame.
Is this the moment to raise the issue of the different tax burden in Europe? There are countries like Holland, Ireland and Luxembourg where taxation is practically zero. Could the post-pandemic recovery not be financed even with a corporal tax?
No, this is the moment for sensible Europeans to realise that there is no such thing as a European Union. All we have left is a sad and dangerous European Disunion in which policy is re-nationalised and where our common institutions are only allowed to do things that benefit the oligarchy-without-frontiers.
In your opinion, are Eurobonds a fair battle to fight? Or is it an impossible challenge?
Eurobonds are essential. Without them the Eurozone will either die or become a cruel cage of austerity in which our people will languish? Are Eurobonds feasible? Of course. But only if the Italian, Greek, Spanish etc. Prime Minister is prepared to veto everything in the European Council meeting until and unless a Eurobond of at least €1 trillion, and with a 30 year maturity, is issued.
Do you think Europe will survive this post-pandemic crisis? In Italy anti-European sentiments are increasingly widespread … You recently published Euroleaks, audio files of the recordings of the Eurogroup meetings from 2015 onwards: what do those recordings tell? Why aren’t those meetings recorded?
They are not recorded because the powerful do not want you to know how they reach anti-European decisions behind closed doors in your name. Is Europe going to survive? Sure it will. Will it become a realm of shared prosperity? Certainly not, unless we veto the current idiotic policies. Will the EU survive? It certainly does not deserve to survive, if our leaders continue doing the same over and over again. But, it might survive at the expense of a majority of people in a majority of countries. That’s why DiEM25 is calling upon progressives to unite transnationally behind an agenda for the many everywhere.

For the Italian version as published in fanpage.it click here

A message to all on the occasion of Greek Easter

Today, on the Thursday symbolising the Last Supper, it is hard for Greeks to take their minds off last Thursday, 9th of April 2020 – the day that the Eurogroup shamelessly condemned our long-suffering people, along with millions of Italians and millions of other Europeans, to huge new austerity precisely at the time they will be struggling to recover from lockdown and massive economic depression.
Dark days are coming for our People, our Democracy, for the whole of Europe. The answer must be Calm Unity and Fierce Struggle.
But not yet. Let’s begin after Easter.
Today, the symbolism of the day, for both believers and atheists, is important. It marks the beginning of the crescendo of a week that our tradition has enabled us to use as a poignant reminder that:


Darkness cannot defeat Darkness; only Light can


This miracle happens during the night’s darkest moment


For this miracle to happen, the virtuous must be crucified side-by-side with the thieves


Happy Easter and Carpe DiEM25

Ευχές για λυτρωτικό Πάσχα – ΒΙΝΤΕΟ

Μεγάλη Πέμπτη σήμερα.
Μια εβδομάδα ακριβώς αφού η κυβέρνηση, με την εκούσια ανυπαρξία της στο Eurogroup, συνθηκολόγησε στο 5ο Μνημόνιο – το 5ο Μνημόνιο του οποίου η φαρμακερή λιτότητα του χρόνου θα πλήξει ένα ήδη λαβωμένο λαό ακριβώς την ώρα που θα πασχίζει να γιατρέψει τις πληγές του μετά τον εγκλεισμό και τη νέα οικονομική κατάρρευση.
Έρχονται μέρες χαλεπές για τον Λαό, για την Δημοκρατία, για την Ευρώπη ολόκληρη. Η απάντηση πρέπει να είναι Ενότητα, Νηφαλιότητα κι Αγώνας.
Από την Τρίτη του Πάσχα όμως.
Σήμερα είναι Μεγάλη Πέμπτη.
Μέρα περισυλλογής και αναστοχασμού, έστω και μόνοι ή οικογενειακώς στο σπίτι.
Αρχή της κορύφωσης μιας συγκλονιστικής, πραγματικά Μεγάλης Εβδομάδας με την οποία μας προίκισε η παράδοσή μας ώστε, μια φορά το χρόνο, να θυμόμαστε:


πως μόνο το φως νικά το σκοτάδι


πως αυτό γίνεται την πιο σκοτεινή στιγμή της νύχτας


πως για να γίνει αυτό πρέπει οι ενάρετοι και οι ληστές να σταυρώνονται δίπλα-δίπλα.


Καλή Ανάσταση

DiEM-TV’s ‘ANOTHER NOW’ with Yanis Varoufakis, Mondays at 20.00 CET | Ep.1 – Introduction to ‘Another Now’ & special guest Johann Hari

Covid-19 has turned our lives inside-out, upside-down. It has put capitalism in suspended animation. It destroyed lives. It caused a new tsunami of poverty, demonstrated the deep class and race divides as some of us are privileged enough to be in isolation while an army of people out there labour for a pittance and at risk of infection to cater to our needs.
But, as always, there are silver linings.


The planet is breathing more easily, now that we – humans – emit fewer poisonous gases.


Everyone has recognised, after decades of neoliberal sermons, that government is, and ought to be, instrumental in safeguarding our lives – and our capacity to reproduce our lives


Politics has become more real, more interesting, liberated for the first time from the media’s portrayal of the political game as sport in which teams, or parties, are scoring points against each other in search of winning the electoral championship. Now, under lockdown, and with governments flexing gigantic muscles that had atrophied for so long, the truth about politics emerges: It is about Who has the Right to tell Whom What to Do. Who Does What To Whom. That’s what politics always was. At least now we can all see this clearly, courtesy of a mindless virus.


But all these silver linings will mean nothing unless progressives do this time what bankers and racists did after the last capitalist implosion, back in 2008: Cooperate transnationally and effectively. Will we allow the masters of finance and the Nationalist International to emerge from lockdown triumphant once the epidemic recedes? Or will we succeed, this time, and against the odds, to change the world – as opposed to keep interpreting it?
Before we can even begin to coordinate so as not to let this terrible crisis go to waste, we need a vision of how we would like the world to be. The oligarchs, the beneficiaries of our current irrational system, they don’t need such a vision: they merely want to freeze things as they are, to ensure that nothing changes, that the status quo is preserved for their benefit – even if this means the end of the world.
So, what is our vision? What realistic utopia should we work towards so as to avert the dystopia awaiting if we fail?
This question has been puzzling me for a while, well before the pandemic. Danae Stratou, my partner in life, has been egging me on ever since we met to write up my vision for a post-capitalist, rational, humanist world. The truth is that I didn’t know where to begin. I made excellent excuses: That no human brain is large enough, has the processing power or the information to imagine an alternative world. That it is History which creates new modes of production and distribution – not the imagination of some feeble human mind.
Nevertheless, I must admit that, deep down, I knew that these were just excuses. The real reason why I did not attempt to put on paper a realistic vision for another society, for another now, was that it was too hard – too daunting.
Then, something changed. A couple of years ago my book ‘Talking to My Daughter About the Economy’ was published. It tried to convey to folks young and old how I understood life under contemporary capitalism. The book did well. Of all the reviews one hit a nerve. It was scripted by Ireland’s Finance Minister – a gentleman with whom we have huge ideological, analytical and political differences. His review was incredibly generous in that he endorsed, amongst other aspects of the book, my description of how money and banking works. His criticism, however, was even more useful to me. In effect he said: OK Mr Varoufakis, let’s agree that capitalism is problematic. What’s the alternative? And if there is one, are we not running a huge risk that, like in the past, the attempt to build a post-capitalist utopia will lead to something far, far worse?
The Irish finance minister’s question was what I needed as a jolt before deciding that Danae had been right all along: Analysing our capitalist now and agitating against it is not enough. Without a vision of a realistic other now we are either impotent or dangerous – in the sense that we may create a new social order that is worse than what we have.
And so, replying to my publisher’s urgent question “What will your next book be?”, I answered that I wanted to have a crack at penning a vision of a realistic utopia. But, because I just couldn’t sit down and write a blueprint of a world that does not exist, I planned to use the medium of political science fiction – a novel-like narrative in which three characters discover, accidentally, another now.
The idea was that the timeline bifurcated in 2008, due to the severity of that crisis. We live in one of the two trajectories – the one in which financialised capitalism reinforced itself courtesy of the 2009 bailouts. But, to the astonishment of my characters, they accidentally discover, in 2025, that there is another trajectory, another now. That other now also began with the Crash of 2008 but, however, evolved very differently. In effect, by 2013, in the other now, capitalism died and was replaced by a very different economic and political system. A system that my characters, and of course the readers, find out about by conversing with themselves as they evolved in that other now.
Why am I telling you all this? Because Covid-19 caught up with me as I was finishing the first draft of the book. With 7 out of 9 chapters completed, Danae and I found ourselves – like most of you – isolated in our home, in something that feels very much like, yes, Another Now. Not a post-capitalist other now but a strange another now in which capitalism is suspended, the difference from my unfinished book’s Another Now being that, today, here, while we are in lockdown, yes, capitalism is suspended but, no, an alternative to capitalism is still as unimaginable as it has been since 1991.
So, when I had to choose a title for my Monday night DiEM-TV chat program, I could not resist branding it… Another Now. My critics will say that I am doing this to advertise my next book. I can’t help that. What I can tell you is that I just could not think of a better title for this hour-long program – one that captures how this now feels as well as our duty to imagine its alternative after Covid-19 dies out.
Enough of this, however. It is now time to introduce you to tonight’s guest.
Johann Hari is a columnist with the Guardian, an author and an influential public speaker. I have been reading his splendid columns for years and have learned much from them, as well as from two books of his:


His 2015 book “Chasing the Scream: The First and Last Days of the War on Drugs”


And, more recently, a pivotal book: “Lost Connections – Uncovering the Real Causes of Depression – and the Unexpected Solutions”


If you have not read this book, you should. And if you need persuasion, look up and watch his TED talk on the causes of depression and anxiety.
So, without further ado, good evening Johann. Welcome and greetings from the island of Aegina, just off the coast of Attika. I believe you are in London working as hard as ever in your flat…

CONTINUE WATCHING MY DISCUSSION WITH JOHANN IN THE VIDEO ABOVE

On the toxic impact of the Eurogroup agreement of 9th April 2020 – With CNN’s Richard Quest (AUDIO)

Discussing the toxic impact of the Eurogroup agreement of 9th April 2020 on Italy and Europe at large. Interviewed by Richard Quest on CNN’s Quest’s World

The EU’s new coronavirus relief deal is a gift to Europe’s enemies – THE GUARDIAN

Europe suffered a historic defeat on Thursday night. After weeks of impasse, the Eurogroup gathering of finance ministers, whose countries share the euro, reached a decision on their collective response to the coronavirus pandemic’s economic impact. Besides constituting an epic dereliction of duty, the Eurogroup’s decision dealt a decisive blow to the foundations of the European Union – much to the delight of Europe’s critics and enemies.
Most of continental Europe using the euro is in lockdown. The economic shockwaves caused by a lockdown do not care what currency we use. Just as in the United Kingdom, the United States or Japan, the precipitous falls in private incomes must be counterbalanced by substantial increases in public expenditure. If governments fail in this, the sum of private and public expenditure (which equals aggregate income) will crash even faster, bankruptcies will burgeon and government tax revenues will collapse further in the medium turn.
The challenge facing the 19 countries of the eurozone is unique. The massive boost in public debt that is now so necessary is hampered by the quaint arrangement of sharing a central bank that, on the one hand, has no common treasury to lean against and, on the other, is banned from backing directly the 19 treasuries that must borrow in euros to fight the crisis. The euro crisis that began in 2010 stretched this monetary architecture to its limits. The coronavirus recession is now pushing it beyond them.
With the countries worst hit by Covid-19, such as Italy, being the most indebted and thus the least able to shoulder the necessary new debt, an impossible conundrum emerges: the new debt needed to revive the private sector will push the state into default, so destroying the banks whose capital is mostly government debt and, in short order, the rest of the private sector. The only way out of this trap is for the new debt not to fall on the weak shoulders of the most indebted eurozone countries but to be shared across the eurozone. Except that this debt-sharing is banned by the treaties that created the eurozone, at the insistence of the northern european countries running a trade surplus with the rest.





It is in the shadow of this riddle that the Eurogroup met on Thursday night. To counter the oncoming tsunami of bankruptcies, they had to emulate the British, American and Japanese stimuli programmes by channelling approximately 8% of total eurozone income (€1tn) into fresh public expenditure, while also setting aside another such sum for an investment fund to power up the post-Covid-19 recovery. And they had to find a way to avoid circumventing the ban on debt-sharing without which an additional €2tn public expenditure would crush members such as Italy, Spain and Greece thus reviving the spectre of disintegration.
On Thursday night, impasse gave way to an agreement. While you may be reading headlines of an impressive sum of €500bn to rescue Europe, the truth is far less heroic. In fact, the price of reaching the agreement was impotence. Instead of the 16% of total eurozone income (€2tn) stimulus needed, the eurozone will throw a derisory 0.22% (€27.7bn) at the crisis. To make the numbers sound better, and reach the magical €500bn figure, they will extend credit lines to countries such as Italy, via Europe’s bailout fund (the European stability mechanism, or ESM), to the tune of 2% of a recipient country’s national income. And they will allow for more loans, of about €100bn, to the social security systems of countries whose unemployment benefit bill spikes more than others – on condition that the monies will be returned when unemployment subsides.
Before the Eurogroup met, hope was in the air that Europe would, at last, change its rules to save its greatest creation: the European Union. Unlike in 2015, when I was alone in the Eurogroup in demanding a common instrument for restructuring public debt, in the past few weeks the governments of eight southern states, plus France, demanded a rethink on debt-sharing without which the eurozone will remain an iron cage of austerity for most and a source of economic stagnation for everyone. Belatedly, but correctly, they demanded a so-called “eurobond”: a common debt instrument that allows total long-term debt to shrink by transferring a portion of it from member states, which have a lot of debt, to the eurozone, which has none.
This debate is now dead in the water, killed off by the Eurogroup’s decision to rely almost entirely on new debts falling squarely on the member states’ weakened shoulders. The only concession to the nine governments suggesting debt-sharing was that the new ESM loans will have no strings attached to them. This is, alas, a red herring as the conditions will come later, once the eurozone’s fiscal rules bite again.
The message today to Italians, Spaniards and Greeks is: your government can borrow large amounts from Europe’s bailout fund. No conditions. You will also receive help to pay for unemployment benefits from countries where employment holds up better. But, within a year or two, as your economies are recovering, huge new austerity measures will be demanded to bring your government’s finances back into line, including the repayment of the monies spent on your unemployment benefits. This is equivalent to helping the fallen get up but striking them over the head as they begin to rise.
The EU is, of course, a lot more than a monetary area. It is a peace project, a realm of shared culture, a source of identity and an opportunity to stem toxic nationalism. Nonetheless, if its economic foundation buckles, powerful centrifugal forces already in play are ready to tear the union apart. Thursday’s Eurogroup verdict, besides being macroeconomically insignificant, was politically irresponsible and a fantastic boon for Eurosceptics in Europe, the UK and indeed in the White House.

For the Guardian’s site, click here

ΜέΡΑ-TV: Η πιλοτική μας ωριαία εκπομπή με καλεσμένο τον Κώστα Γαβρά – ΒΙΝΤΕΟ

Το ΜέΡΑ-TV είναι γεγονός. Στα βήματα του DiEM-TV που έχει ήδη φιλοξενήσει προσωπικότητες όπως η Saskia Sassen, ο Noam Chomsky, ο πατέρας του Julian Assange και πολλοί άλλοι (στα αγγλικά βέβαια), το ΜέΡΑ25 φέρνει στο ελληνόφωνο κοινό συζητήσεις που υπερβαίνουν τα τετριμμένα, τα κομματικά, τις ποταπές αντιπαραθέσεις – συζητήσεις που, αντίθετα, αναφέρονται στα μεγάλα πολιτιστικά, φιλοσοφικά, κοινωνικά ζητήματα.
Μια πρώτη γεύση είναι η πιλοτική εκπομπή του ΜέΡΑ-TV Κατάσταση Πολιορκίας με προσκεκλημένο μου τον Κώστα Γαβρά. Όπως θα δείτε, επιλέξαμε να μην μιλήσουμε ούτε για το ADULTS IN THE ROOM ούτε για την πολιτική σκηνή στην Ελλάδα – αλλά, αντίθετα, μιλήσαμε για τα πρώτα του βήματα στην Ελλάδα και στη Γαλλία, για τις επιρροές του, την κινηματογραφική του μέθοδο, την Μισέλ, τον κινηματογράφο γενικά και, βέβαια, την Ευρώπη.
Το ΜέΡΑ-TV, προς το παρόν, η Κατάσταση Πολιορκίας θα εκπέμπει κάθε Σάββατο βράδυ στις 20.00. Επειδή το επόμενο είναι Μεγάλο Σάββατο, ξεκινάμε πάλι κανονικά το Σάββατο 25 Απριλίου στις 20.00.
Ο κατάλογος των προσκεκλημένων, σας υπόσχομαι, θα είναι και απροσδόκητος και συναρπαστικός.
Συντονιστείτε!

“The European Union Is Determined to Continue Making the Same Errors It Made After 2008” – JACOBIN interview

The lack of EU help for the states hardest hit by COVID-19 is the latest sign of the hollowness of “European solidarity.” As Yanis Varoufakis tells Jacobin, the European Union’s institutions are hardwired to ignore the needs of the social majority — preferring to allow mass suffering than to change their own rules.


Yanis Varoufakis is used to controversy. Since stepping down as Greece’s finance minister in 2015, the self-described “erratic Marxist” has become the leading spokesperson for DiEM25, a European-wide party that seeks to restructure the European Union’s institutions in the interests of the majority.
In March, Varoufakis made news for dropping what he dubs the “EuroLeaks” — his secret recordings of the closed meetings where eurozone finance ministers decided Greece’s fate back in 2015. The recordings confirm many of our worst suspicions about such opaque bodies — and provide fascinating insights into how neoliberal technocrats really work.
Europe’s institutions are again in the spotlight today, due to their weak reaction to the coronavirus pandemic and the resulting economic shutdown. As another round of rescue packages loom, Varoufakis spoke to Jacobin’s Loren Balhorn about the European Union’s response, what lessons elites have learned from the last crisis, and what different paths are today open to the Left.




LB

You released the “EuroLeaks” a few weeks ago. Are you satisfied with the reaction so far?

YV

Absolutely. We wanted to empower anyone who cares to understand how power abuses not itself, but those who have created it — that is, voters and the demos more generally. We’ve been overwhelmed by the positive response, even by those who disagree with us. They say, “At last, somebody has let us in, given us a front-row seat into what is happening behind closed doors, on our behalf without our knowledge.”

LB

What has the response been like in Greece?

YV

The same. On the one hand, there are those who make a living serving the interests of the oligarchy. They consider the EuroLeaks to be a major enemy and an affront and do everything in their power to discredit it. But even they cannot help but listen to the leaks and hopefully feel a bit embarrassed.

LB

It seems like one of the reasons you released the recordings now is that you are being blamed by both the current Greek government as well as the Syriza leadership for the very tough conditions Brussels imposed on the country. How much of this is about settling scores against your political enemies, who are trying to discredit you?

YV

Let me tell you where I’m coming from. Greece is a country whose population was on the floor even before the coronavirus hit. We have watched a new neoliberal/ultra-rightist, nationalist, and xenophobic government introduce legislation that will, with mathematical precision, seriously increase discontent and misery.

In December they passed a bill selling most nonperforming loans and mortgages to vulture funds, mainly from the United States and some from Europe. A sequence of evictions is also about to begin. When you hear the finance minister introduce that bill, trying to defend it on the basis of distortions of what was going on in those Eurogroup meetings — in which I was representing Greece — at that point I think, if you were in my place, you would also do it. Not to settle scores, but exactly the opposite: to reveal the lies and fake news that were coming out of those meetings. To prevent new policies from being legislated against the interests of weak, innocent people who are still being targeted for liquidation.

LB

Turning to the European Union, the pan-European party you helped to found, DiEM25, arguably puts forward the clearest critiques of how the European Union functions and what kinds of policy measures could be taken to make it less institutionally neoliberal and technocratic. Nevertheless, you have made little progress electorally, and failed to enter the European Parliament last year. How do you evaluate your performance so far? Why do you think it is so difficult to gain a hearing for your argument and win over large numbers of people to a platform like yours?

YV

We came together in February 2016 in Berlin to restart the process of thinking about progressive transnational politics. In the middle of a defeat — because 2015 was a defeat, not only for us here in Greece but for the whole Left across Europe. At a time of rising xenophobia, we made the assessment that our collective defeat was going to be the first step towards the strengthening of what you’d call the “nationalist International,” which finds itself in a loop of positive reinforcement with the liberal establishment. Because let’s face it, the Merkels and Macrons of Europe need people like [Marine] Le Pen and the Alternative für Deutschland (AfD) in order to convince the rest to vote for them. At the same time, the Le Pens and the AfDs need the austerity policies of Macron and Merkel in order to create the discontent that feeds them.

We always knew that we would be caught up between these forces, which antagonized one another and fed off each other. We had no organization and we had no money, and we always knew it was going to be tough. In the end, every single progressive force in Europe, including DiEM25, lost out in the May 2019 European Parliament elections. We all suffered from the success of the liberal establishment, who continue to do business as usual when business cannot be continued as usual. They are feeding the nationalist international, which then feeds back and reinforces the liberal establishment.

We have 120,000 members, but that’s not that many across Europe. We managed to secure 1.5 million votes on a total budget of €60,000. Not great, I was expecting us to do better, but it’s not catastrophic either. This was only a small first step. Are we going to succeed? I have no idea. What I do know is that what DiEM25 tried to do is the way to go.

LB

Eleven years since the global economic crisis and five years since the Troika imposed austerity on Greece, Europe is facing what looks to be a twin crisis of both a pandemic and, caused by it, a massive economic downturn. Do you have any hope that European technocrats learned from the last crisis and will adopt a different approach this time?

YV

There is a spectacular coincidence of errors by the European Union today and in 2010. They’re making the same category error: in 2010 they decided to paint the crisis as a crisis of public debt and lack of liquidity, meaning the solution must certainly be loans. So, the Greek state was loaned the largest amount in history, on condition of austerity. Mistaking a bankruptcy for a liquidity problem is what effectively incarcerated a very large section of Europe — a vast majority of Europeans — into permanent stagnation.

When the coronavirus hit, the eurozone economy was already very significantly damaged by the inane handling of the Euro-crisis due to that category error of purposefully mistaking a bankruptcy for a liquidity crisis. And they are doing exactly the same thing now. If you look at the communiqué of the Eurogroup, if you look at [German finance minister] Olaf Scholz’s pronouncements, his policies, they sound rather large — with huge sums like €500 billion in Germany alone. But if you look at the detail of what they are proposing, both in Germany and in the Euro-group for the European Union as a whole, you will find exactly the same category error — they are proposing large sums in the form of credit lines, loans, or tax deferments. Again, they’re treating what is crucially a sequence of bankruptcies as a lack of liquidity, as something that can be dealt with by means of loans. They’re doing exactly the same thing

So, no, they haven’t learned. They are determined to continue with the same error. But let’s not be naive. This is not a failure of the faculties, it is not a failure of rationality. The Euro-group and the European Union have been hardwired never to be able to make any decisions that utilize public finance in favor of the majority. The whole point about creating the eurozone was to eradicate the possibility of fiscal policy. And why was that? Because a particular configuration of European capital decided that the best way to maximize capital accumulation in Europe was to fix monetary policy and never give parliaments the opportunity to compensate for capitalist crises by means of fiscal stimuli.

They are absolutely determined. They would much rather see half of the continent sink then do away with that principle, which is a class-war principle from their perspective. We saw that in 2010, and we can see it with the coronavirus today.

LB

So, the bankers and the institutions will not change anything, but does it open a window for our side?

YV

Yes. Every crisis is an opportunity for the peoples of Europe to unite. But until and unless we form a genuinely transnational progressive movement — not a confederacy of nation state–based left-wing parties, but a genuinely pan-European transnational movement against the transnational bankers and oligarchs — we will not be able to utilize that window of opportunity. That is the lesson of 2015 — at least the lesson I drew here in Greece.

This is an abridged version of an article that first appeared on Jacobin.de.