Interviewed by Telepolis (German and English versions)

Telepolis just published an interview of mine under the title Die Europäische Union zerbricht. For the original article, in German, click here. Below I copy my original answers in English.

Have the powers that be already decided to let Greece go bankrupt? In your interview with Doug (nb. click here), you hinted to the French elections ….

Greece is bankrupt and has defaulted. The question is whether the powers that be are willing to push Greece out of the eurozone. No, I do not believe they have come to such a decision yet. From my discussions with key decision makers in Germany, it seems that there are sharp differences of opinion between at least three centres of power: the financial sector players, centred around Frankfurt, Berlin politicians and the representatives of industrial interests. Frankfurt is almost united in its assessment: Greece and Portugal must be severed from the eurozone just after the French Presidential elections are over, with the European Central Bank simultaneously pumping more than €2 trillion of fresh money into the banking sector of the rest of the eurozone in order to keep Italy and Spain within the Union. Berlin is not that keen on the idea but is running out of options, in view of the calamitous failure of the Greek and Portuguese bailouts. Mrs Merkel is unconvinced. She knows that, beyond the fresh liquidity for the banks that the severance of Greece and Portugal will necessitate, there are another two bills, plus a systemic risk. The two bills are, firstly, the monies owed by the Central Banks of Greece and Portugal, under Target2, to the Bundesbank and to the rest of the European System of Central Banks and, secondly, the money that the EU must deliver to Greece’s and Portugal’s banks to keep them functioning after their return to their old/new currencies. Meanwhile, German industry is fearful that such a move would be the first step toward a gradual reinstatement of the DM; a prospect that they are keen to avert, yet one that they are increasingly resigning to. In short, while it is all up in the air, powerful forces within Germany are pushing in the direction

What can you say about the current socio-economic situation in Greece?

That this is the winter of our discontent. This is Greece’s Great Depression. If Steinbeck were alive he would have wanted to write a fresh version of the Grapes of Wrath, one tailor-made for a Greek tragedy in the making.

In the German media discourse there is a lot of talk about ‘saving Greece versus wasting German taxpayers’ money’. Who actually profits from the bail-outs?

No one really, except of course for the major shareholders of banks that would have lost their control over ‘their’ institutions had the EU and the IMF not stepped in to ensure that they receive their money is paid by German and Dutch taxpayers against the interests of all taxpayers (northern and southerner). It is a scandal that German taxpayers are told that it is an act of solidarity for them to fork out monies for the Greeks that the Greek government is not allowed to stimulate the dying Greek social economy.

How do you see the economic future for Greece and the EU?

Under the current policy mix, I do not see a future for the EU. Europe is in a process of disintegration in the hands of utterly irrational policies that are boosting the centrifugal forces that are tearing the Union apart. If this breakup eventuates, then Greece will be only one of the many victims of a postmodern 1930s.


  • WOW! Let’s conquer Germany! Congrats! (Now I’ll go and read it…)

  • I think that is a corrosive thinking to think of Germany as power to be with the ability to kick out members like Greece or Portugal or for that matter anybody else from the EU or euro zone. If your thinking correlates with reality it is treason of the Greek leadership and those folks should be tried and jailed. We belong as equal member, or if not is the case, the Germans should get out, or preferably individual German states should belong as separate units not as a colossus.

    There is another moral question here. The majority of Greek people that is punished by idiotic measures have nothing to do with the case. They are completely innocent. It is immoral to collective punish the innocent.

    • Demetre,whether we argue or not with German policy,it is prooved that they can enforce it whenever they want,so it is high likely that if they decide to kick us out,it can happen.See this video of prof.Varoufakis and you will understand how the balance of power is strongly leaning towards their side: the link will take you right away to the interesting part.

      “There is another moral question here. The majority of Greek people that is punished by idiotic measures have nothing to do with the case. They are completely innocent. It is immoral to collective punish the innocent.”
      Ofcourse.And German citizens dont have to pay for this either.But its easier for the politicians to turn one nation against another than and keep doing their job how they wish.

  • I know this is not the main point here, but I surely very anxiously wait to see, how far your campaign will go. I do think, that it already is phenomenal what you have achieved through internet blogging, of course flanked with publishing of some books. Even though you have been banned by some TV channels and your views are not mainstream in economics, you have been influencial and your message and your modest proposal have been going viral last year. It is overall an encouraging sign for democracy, participation and influence, even outside of the old, traditional political system. One has to wish you success, even just for this dimension of your campaign.

  • At any case, Germans will not decide to kick out Greece or / and Portugal. At first, they have not the power for that . It depends of the Greek sturdiness and the political cost around the Europe and not only between peoples. As the euro currency rate will be increased, relative to US dollar, it will be harmful for economies of France, Italy, Spain ( except German industries).
    The bankers of Frankfurt say smart lies to our Yanis.

  • Before subscribing to silly ideas of German unilateral actions and the ability of Germany to carry them through, I want everybody to take a deep breath and study the Peloponnesian war to understand the misfortune that Merkel’s amateurism can unleash to the German people.

    Because when the Greeks engage in war, the only certainty is the degree of desolation for the vanquished:


    In 1951 march edition of MAN, “The Royal Anthropological Institute of Great Britain and Ireland”  published an essay by the Archeologist Glyn E. Daniel called ‘The chronological framework of Prehistoric Barbarian Europe.

    Etymologically, the term “Barbarian” originates from the Greek “Barbaros”, and was used to describe uncivilized people from the Persian Empire. “One not a Greek”.

    The period from 400-800 CE is taught in schools as the “Period of Migration” or “The Barbarian Invasion”, and it marked the beginning of the Early Middles Ages when Germanic tribes took control of the Western parts of the Roman Empire, and Slavic tribes of Central and Eastern Europe.

    It was around the same time that the frontiers of Islam and Christianity were established for a thousand years as well.

    This Migration Age period is still debated amongst scholars.


    Over the past 15 years, the number of people crossing borders in search of a better life has been rising steadily. At the start of the 21st Century, one in every 35 people is an international migrant. If they all lived in the same place, it would be the world’s fifth-largest country.

    x x x x 

    We live in times where the neo liberal agenda has plundered the moderate wealth of the middle class, and as a result we witness totalitarian methodologies deployed to control those who were impoverished and those who oppose to the policies forcefully applied without any democratic legitimation. This can be observed at large in the US and Europe. We do not have a functioning democracy, we live in a Plutocratic system that exploits and abuses the many to serve a few.

    Teachers are confronted with that abuse on a daily basis. They deal with the dysfunctional families, intense expressions of anger and frustration, hopelessness, rage, misguided minds, tortured souls, abandoned hearts, a youth that was betrayed, betrayed by us. 

    Can there be greater barbarity for example, than to hurt an infant? Its helplessness, its innocence, its amiableness, call forth the compassion, even of an enemy, and not to spare that tender age is regarded as the most furious effort of an enraged and cruel conqueror. What then should we imagine must be the heart of a parent who could injure that weakness which even a furious enemy is afraid to violate? Yet the exposition, that is, the murder of new-born infants, was a practice allowed of in almost all the states of Greece, even among the polite and civilized Athenians; and whenever the circumstances of the parent rendered it inconvenient to bring up the child, to abandon it to hunger, or to wild beasts, was regarded without blame or censure.

    – Adam Smith, 1759, The Theory of Moral Sentiments –

    What difference does it make?

    What difference does it make when we as a society allow a handful of fascist financial interest groups to send an entire generation into poverty while they are filling their own pockets with stolen riches? In cahoots with technocrats and mediocre civil servant souls that play the game of being a politician, and serve no one but the vested interest groups.

    To date, globally around 20 million people lost their jobs.

    The father of a friend from the US, John-Thomas, he is 94 years old now, he saw with his own eyes what John Steinbeck’s “The Grapes of Wrath” depicted. The Greek Intellectual Yanis Varoufakis was right to point out Steinbeck’s realist novel to those who want to better understand what the daily life of Greek people looks like in 2012.

    A Barbarian Europe, again!


  • Yianni,

    Just a quick question. Operationally, and legally speaking, how does the EU, or rather, German banking interests carry out the goal of kicking Greece out?

    There is no legal framework in the EU constitution that I am aware of, thus the removal of an EMU member would involve some rather ugly machinations, I would assume. That is, make an EU member’s life extremely difficult once the creditors are firewalled from any perceived contagion. The unperceived contagion and the subsequent first order as well as second order afteraffects are other issues that few can imagine accurately, but I could see it getting ugly for all.

    • It will not be “kicking Greece out”, but *driving* Greece out. The intent of the neoliberal masters of the EC, ECB, EFSF etc, is to extract as much capital as possible from Greece at the same time driving Greece’s economy so deep into the ditch that eventually a majority of Greeks will vote to exit the Euro. This eventuality is being planned and prepared for with the ESFS’s recapitalisation of the banks holding Greek bonds. The ESFS is firewalling the big banks against “aftereffects” of the next default.

      It will be a right-wing populist party that will be elected to usher Greece out of EZ, possibly out of the EU as well.

  • Writing on a historic novel about the French-Algerian war from a fictive Algerian personages perspective (with a book presentation in the Multatuli Museum in Amsterdam, summer/autumn 2012) I stumbled upon an essay on Albert Memmi’s book “The Colonized and the Colonizer” dating back to 1957, an essay written by Jean Paul Sartre and published in Les Temps Modernes no. 137 and 138, July and August 1957.

    In the relationship colonizer-colonized Sartre sees a miniature Minotaur, and I quote, “strangled by the colonial apparatus, that heavy machine, (…), after giving full satisfaction to the colonizers, the system is turning against them and could very well crush them. In fact, racism is inscribed in the system : the colony sells foodstuffs and raw materials cheaply, it buys manufactured products at very high prices from France. This strange trade is only beneficial for both parties if the natives work for nothing, or next to nothing.”

    So colonial imperialism resembles a lot like American imperialism did until the Global Minotaur was partially killed (not dead, intensive care did the trick reviving them, or am I mistaken here). In another essay Sartre quotes Jules Ferry, a big shot during the 19th century: “France, awash with capital, are destined to be great exporters, the question is precisely one of outlets…”

    Ergo: the recycle mechanism you refer to in your stunning book The Global Minotaur, was cornerstone during colonial times, only to return to us via haute finance, n’est pas?

    PS: Yanis, perhaps you would like to come to my book presentation later this year, aptly named Modern Times (for a, the literary magazine les Temps Modernes, and b, times don’t really change)?

  • Question:

    What should individual citizens (in my case, individual citizens who are now studying in the UK and who only basically visit Greece during the holidays but still have family and friends there) do? It’s rather depressing reading about this if there’s nothing I can do about it.

  • “The two bills are, firstly, the monies owed by the Central Banks of Greece and Portugal, under Target2, to the Bundesbank and to the rest of the European System of Central Banks and, secondly, the money that the EU must deliver to Greece’s and Portugal’s banks to keep them functioning after their return to their old/new currencies.”

    The sooner the eurozone gets rid of the Target2 “bill” – a grotesque form of “debt” accounting within the “eurosystem”, which turns the euro into a quasi-common currency effectively treated as “foreign” by all eurozone member-countries (and central banks) – the better.

    Ysnis is right that releasing Greece and Portugal from their euro bondage would force Frankfurt to scrap Target2 by writing off these fictitious “eurosystem debts”, much to the regret of Bundesbank gnomes who conjured Target2 up in Maastricht to keep the other eurozone central banks under their iron heel.

    The second bill (required to keep Greece’s and Portugal’s banks functioning after an orderly and negotiated EXIT from the eurozone) may be a bill worth paying, IF (and only IF) Berlin and Frankfurt continue to reject the Modest Proposal by Yanis Varoufakis and Stuart Holland.

    Two years after MP 0.1, how long can Greeks or Portuguese wait under Dickensian labour relations before they are allowed to make a choice of the lesser evil?

    The rest is commentary – which the pauperised Greek people have had enough of – thank you, very much.

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